By Your Name Company Telephone Number & URL Logo Enter your company tag line here Understanding Your Credit Score By Your Name Company Telephone Number & URL

What is a Credit Score? A 3-digit number used by lenders to evaluate the risk associated with lending you money It is generated by a mathematical model created by Fair Isaac & Company in the 1950’s. There are 3 Major Credit Bureaus, Equifax, Experian and Trans Union –You have 3 Scores Scores range from 300-850

What is a Good Score? Above 740 = Excellent = Good = Fair Below 620 = Poor

The Cost of a Low Score Lost Opportunity Humiliation Employment Auto Loans Education Loans Business Ownership Checking Account Medical Credit Cards Renting an Apartment Utilities Insurance Rates & Options Less or No Retirement Savings

The Cost of a Low Score & Mortgage Never Owning a Home At All, Again, or For Years Higher Interest Rates Loan Level Price Adjustment Fees Higher PMI No HELOC Higher HELOC Interest Rates Today, on a $300,000 30-Year Fixed Home Loan, a borrower who increases his or her credit score from 620 to 740+ can potentially save $000.00 per month on mortgage payments, $00,000.00 per year, and approximately $000.000.00 over the life of the loan.

Five Factors of Credit Scoring Payment History Late Pays Collections Charge-Offs Repossessions Foreclosures Tax Liens BK’s Judgments Amounts Owed Credit Cards Mortgage Loans Auto Loans HELOC’s Installment Loans Length of History Time since account Opened and Time since account activity New Credit Soft Inquiries Hard Inquiries Types of Credit Used A Mortgage Loan An Auto Loan 2-3 Major Credit Cards

Payment History – 35% WHAT YOU SHOULD KNOW A recent 30-day late can cost you 50-80 points Paying a collection that is more than 2 years old can hurt your score Being past due on an account can cost you 50+ points Derogatory accounts do NOT fall off of your report automatically after 7 years. You must dispute them. A divorce decree does NOT take precedence over the creditor agreement

Amounts Owed – 30% WHAT YOU SHOULD KNOW New debt temporarily decreases the score Keep balances below 50% at all times to maintain your score Keep Credit Card Balances below 30% of the limit 3-6 months prior to applying for a home loan Don’t consolidate debt. Share outstanding debt evenly among your cards If you go over the limit on your credit card even by $1, it will cause a serious penalty HELOC’s can be considered revolving debt, not mortgage Do not close credit cards except in certain circumstances USE YOUR CREDIT CARDS or they will become unrated in 3 months

Type of Credit Used – 10% Length of Credit History – 15% WHAT YOU SHOULD KNOW Hold onto old credit cards, even if the rate is not great New credit users can add themselves to another person’s credit card as an authorized user to generate a score Mixture is best The type of credit card DOES matter 2-3 revolving credit cards is optimal with established credit history AKA’s and Multiple Addresses bring scores down

New Credit (Inquiries) – 10% WHAT YOU SHOULD KNOW Soft vs. Hard Inquiries 30 Day Window for pulling your reports Inquiries affect the score for one year Inquiries can cost between 2 and 25+ points on the score depending on your current score You are Pre-Approved means you are NOT pre-approved

Start Improving Your Scores Now Step 1 - Order Your Credit Reports & Scores The first step is to have a complete picture of your current credit situation by ordering your credit report and score for all three national credit bureaus, TransUnion, Equifax and Experian. Step 2 - Verify the Data Being Reported It is the consumer's responsibility to verify that the data being reported is accurate. Step 3- Dispute the Inaccurately Reported Information Contact your creditors and send letters of dispute to the credit bureaus to have errors on your credit report corrected. SEND CERTIFIED.

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