Your parents can’t fix everything How to rescue your credit —before it needs saving!

Slides:



Advertisements
Similar presentations
Understanding Your Credit Purdue Employees Federal Credit Union.
Advertisements

Understanding Your Credit. There are three major credit reporting agencies in the United States that maintain records of your use of credit and other.
©2004 Iowa Student Loan Credit Scoring Whats Your Score? Presented By: Natalee Girardi College Consulting Services.
How To Improve Your Credit Score
Credit Records and Laws
RAISE YOUR CREDIT SCORE 50 POINTS IN FORTY-FIVE DAYS Bruce Gustafson (303) Crestline/Universal Lending.
Module Three: Mastering Credit Basics
Presented by: Thomas Murphy Harvard University Employees Credit Union Medical School Loan Repayment & Building Credit PARTNERS OFFICE of RESOURCES for.
 A record of your credit history that includes information about: ◦ Your identity ◦ Your existing credit ◦ Your public record ◦ Inquiries about you.
Understanding Credit Scores. Introduction ◦ A credit score is a three-digit number derived from a mathematical interpretation of the information in a.
What is a FICO Score? A FICO score is a credit rating developed by Fair Isaac & Company. Method was developed in the late 1950’s and is now widely accepted.
The 60-Minute Guide to Understanding & Raising Your Credit Score Brought to you by: Ruth Schriefer, Iowa Co. FLE Peggy Olive, Richland Co. FLE Joint Council.
CREDIT HISTORY & SCORES. CREDIT REPORTS  aka: credit history  3 Credit Bureaus receive and maintain information on consumers: Experian, TransUnion,
The importance of understanding credit reports The choices you make today directly impact your future. Your credit score can influence how much interest.
A Four Corners Activity. What is a “credit report?” How does someone’s credit report impact his or her financial opportunities?
To Your Credit 1. 2 Introduction Instructor and student introductions. Module overview.
A community outreach program of the Get Smart About Credit.
Staying on Top: Credit Reports and Scores. What’s in Your Credit Report? Personal identification information Name, address, date of birth, SSN, employment.
Credit Reports Sissy R. Osteen, Ph.D., CFP® Oklahoma State University.
CREDIT How do you build credit? Mr. Jones and Mrs. Smith make the same amount of money, but on loans, Mr. Jones pays more. Why? What may determine if you.
The Importance of a Good Credit Score and How to Read a Credit Report
You and Your Credit Score FICO. The Score The most widely used credit score is the FICO Score, the credit score created by Fair Isaac Corporation. Lenders.
BANKING SERVICES Ch. 7.3 Granting & Analyzing Credit.
Shanna McGinnis. Key Terms aka WHAT YOU NEED TO KNOW! Credit History: The complete record of your borrowing and repayment performance. Credit Bureau:
Understanding Your Credit Score By Your Name Company Telephone Number & URL Logo Enter your company tag line here.
CREDIT HISTORY & SCORES. CREDIT REPORTS  3 Credit Bureaus receive and maintain information on consumers: Experian TransUnion Equifax  Get a copy of.
 Buying on credit = buy goods and services now and pay for them later (usually with interest)  Having credit depends on the suppliers’ confidence in.
Credit ~ The Basics. Homework (Passport Page 32)
Charge It Right 1. 2 Purpose Charge It Right will teach you about credit cards and how to use them responsibly.
To Your Credit 1. 2 Purpose To Your Credit will: Show you how to read a credit report. Help you build and repair your credit history.
Credit Reports & Scores Original author: Peggy Olive Richland County UW-Extension With Adaptations by Bridget Mouchon from WHPE power-point and other Extension.
Unit 4 Consumer Credit Part 5 Credit Reports Dollars and Sense.
Understanding the Importance of Credit in Today’s Economy Presented by ComPsych® Corporation.
 the ability to borrow money in return for the promise of REPAYMENT  Before using credit you should ask your self:  Is it a want or a need?  Do you.
Credit Reports Take Notes. Cost of CarInterest Rate# of PaymentsMonthly Payment $ 25, %60($438.19) $ 25, %60($460.41) $ 25, %60($483.32)
7.4.2.G1 Credit Reports Advanced Family Economics & Financial Education The Essentials to Take Charge of Your Finances.
Do Now10/30 & 10/31 Chapter 17 SLID E 1 Respond to the following in your notebook: As a teenager, you would like to get started in establishing a good.
Chapter 4.  What is Credit? ◦ Principal + Interest  Installment Debt ◦ Equal Payments ◦ Durable Goods ◦ Longer Term = Lower Payment BUT ◦ More Interest.
Chapter 17 Two Truths and a Lie.
© Family Economics & Financial Education – Revised October 2004 – Credit Unit –Understanding Credit Reports Funded by a grant from Take Charge America,
1.4.2.G1 Credit Reports and Credit Scores Take Charge of Your Finances.
FIXING Your Credit Objectives: Understanding how credit scores are determined. Understanding how consumers actions impact their credit scores.
2.6.1.G1 Credit Reports and Scores Take Charge G1 © Take Charge Today – August 2013– Credit Reports and Scores– Slide 2 Funded by a grant from.
November 1, 2011 Objective: Students will learn the components of a credit report.
Chapter 27 Your Credit and the Law pp Learning Targets 1.Explain 1.Explain how government protects credit rights. 2. Name 2. Name federal laws.
CHAPTER 26 – HOW TO GET AND KEEP CREDIT What I need to know…
2.6.1.G1 Credit Reports and Scores Advanced Level.
The Three C’s of Credit Objectives: – Students will be able to describe the “Three C’s of Credit (Capacity, character, and collateral) and factors used.
What’s a Credit Report? From age 18 on, agencies collect data about your spending habits. Monitor your ability to handle risks (i.e. loans I installment.
Credit – You’re in Charge.  Credit – the ability to borrow money in return for a promise of future payment. ◦ Credit has the opposite trade-off as saving.
CREDIT HISTORY & SCORES. CREDIT REPORTS  aka: credit history  3 Credit Bureaus receive and maintain information on consumers: Experian, TransUnion,
2 Table of Contents  Personal Identification Information  Trade Lines or Payment Records  Public Record and Collection Items  Inquiries  Consumer.
FICO SCORE What you need to know about your credit report.
Credit  When goods, services, and/or money is received in exchange for a promise to pay back a definite sum of money at a futre date.  Lender: the person.
How to Improve Your Credit Score Who Determines your Score? Three Credit Bureaus:
1To Your Credit Objectives By the end of this unit, you will be able to: Describe the purpose of a credit report and how it is used. Describe the purpose.
© Take Charge America Institute – September 2008 – Workshop Guide – Understanding Credit Reports Advanced Funded by a grant from Take Charge America, Inc.
Making the Most of Your Credit An Advantis Credit Union Better Together Workshop.
How To Improve Your Credit Score Federally insured by NCUA Great Rates. Personal Service. chevronfcu.org 
FICO Your Credit Score FICO is an acronym for the Fair Isaac Corporation, the creators of the FICO score.
Credit Score What is a credit report and why is it important to you?
By Your Name Company Telephone Number & URL
Understanding Credit Reports Essentials Advanced Level
Credit Score Consumer Math.
Your parents can’t fix everything
Credit Reports and Credit Scores
Henderson County 4-H Loren Stanford, Extension Agent 11
Credit Score Consumer Math.
Understanding Your Credit and Credit Score
Presentation transcript:

Your parents can’t fix everything How to rescue your credit —before it needs saving!

Begins when you choose and use credit services Your credit history Influences your ability to obtain products and services—and how much they’ll cost you Credit cards Car loans/leases Private student loans Mortgages, leases Employment

Your credit history matters! A good credit history will help you access services to improve your quality of life A bad credit history will hold you back–and your missteps will follow you for as long as 10 years

How it works Three credit reporting companies update and distribute consumers’ information: Equifax, Experian and TransUnion Credit reporting companies update consumer’s information Consumer applies for credit Consumer applies for credit Creditor requests information about consumer’s financial history Credit profile used to determine whether to authorize credit—and if so, at what interest rates Consumer is granted (or denied) credit Credit grantor reports activities back to credit reporting companies every 30 days

What is a credit report? Tells lenders how much credit a consumer has used and whether they are seeking new sources Lists the type of credit a consumer uses, the length of time the accounts have been open, and whether the consumer has paid their bills on time Prepared by credit reporting companies for use by credit grantors and other parties with permissible purpose Summary of a consumer’s financial reliability Details a consumer’s credit history as it has been reported

Types of credit reports 1.Abbreviated version of consumer credit report that creditors see 2.Does NOT contain limited inquiries or account reviews 3.Contains credit inquires Subscriber report (Credit grantor version) 1.Lists all inquiries including limited inquiries and account reviews 2.Only consumers can request this version Consumer disclosure (Consumer version)

Elements of a credit report What is NOT in a credit report? What is in a credit report? Race Gender Religion Sexual orientation National origin Medical history Checking or savings account balances Income Driving record Report card Identifying information Credit history Inquiries

How can you get a copy of your credit report? You get one free report every 12 months from each of the three bureaus! Visit AnnualCreditReport.com to download You can also get free reports at CreditKarma.com

What is a credit score? Sum calculated by vendor and used by lenders as an indicator of how likely consumer is to repay loans Snapshot in time of the consumer’s current financial situation Generated by a mathematical formula Each credit grantor has its own strategy for interpreting the credit score If credit is denied after reviewing the score, credit grantors must disclose reasons for the decision

What’s in a credit score? What is NOT calculated in a credit score? What’s calculated in a credit score? Demographic information Age, race, religion, national origin, gender, sexual orientation, marital status, residence, child/family support obligations Employment information Salary, occupation, title Other credit information Interest rates charged by other credit grantors, usage of a credit counseling company Payment history Outstanding debt Credit account history Recent inquiries Types of credit used

What are the Five Parts that go into a Typical Score? What Percent for each part? Payment history: 35% - Account payment information - Adverse public records - Amount of delinquent accounts - Number of past due items Types of credit used: 10% - # of various types of accounts New credit: 10% - # of recently opened accounts - # of recent inquiries Credit history length: 15% - Time since accounts opened Accounts owed: 30% - Outstanding balances on accounts - Proportions of balances to total credit limits - Proportion of installment loan amounts

What’s a good credit score? Very poor PoorFair Very good Good Typically the higher the score the better Individual credit grantors decide range of acceptability For example, a consumer’s credit score might be 680 Based on this particular model, here is how the consumer may be viewed by a certain lender You are here

Credit management tips Your parents can make a payment for you. Your parents cannot make a late payment not late. A late payment stays on your credit history and impacts your credit score for as long as 7 years. However, the impact lessens as time passes. The single most important component of your credit score is whether you make payments on time

More credit management tips Check your credit report every three months Improve your credit score 50 points or to above 650 Reduce your debt balances to below 35% of available credit limit Create a budget and stick to it Dispute negative inaccuracies on your credit report Remove expired debts and collection accounts Consider refinancing Guard against identity theft Set goals Clean up your records

Top 5 misconceptions Your credit score will drop if you check your credit report 1 1 Closing old accounts will improve your credit score 2 2 Once you pay off a negative record, it is removed from your credit report 3 3 Being a co- signer doesn’t make you responsible for the account 4 4 Paying off a debt will add 50 points to your credit score 5 5

If you find a mistake… First, correctly identify inaccurate information Next, contact the credit grantor responsible for the inaccuracy and try to resolve the issue If this does not work, contact the credit reporting company(s) reporting the inaccurate information Credit reporting company(s) will investigate the issue At the conclusion of the investigation, or within 30 days, you’ll be contacted You have the right to dispute inaccurate information on your credit report

What questions do you have?

●{●{

Stay Connected! Like us! Follow Connect to us on LinkedIn! Visit!