A financial education workshop hosted by FEPFEP Financial Education Partnership A 501(C)(3) Nonprofit Organization | (926) |

CLICK TO EDIT MASTER TITLE STYLE Pros Purchases Builds credit emergencies Cons Interest Temptations Over-extending WHAT IS CREDIT?

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THE 4 C’S OF CREDIT creditworthiness capacity collateral character

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HISTORY OF CREDIT & CREDIT SCORING 1750 BC The code of Hammurabi Companies use proprietary cards Bill Fair & Earl Isaac establish FAIR, ISAAC & COMPANY Beacon score debuts (Equifax); it’s the first general purpose FICO score

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CREDIT SCORES & CREDIT REPORTS Credit Report a report that is compiled by credit reporting bureaus on an individual’s history of debt, credit, and borrowing behavior Credit Score A number based on the analysis of an individual’s credit reports that represent the creditworthiness of that person

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WHAT’S IN A CREDIT REPORT? Personal information Account information (aka Tradelines) Inquiries Collections Public record information Creditor’s contact information

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HOW IS CREDIT MEASURED?

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WHY IS CREDIT IMPORTANT?  Buying a home or car  Loans (college)  Life insurance  Interest rates

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CREDIT REPORTS AND SCORES TransUnion Experian Equifax 3 major credit reporting bureaus : Retrieving your credit report: Call

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DISPUTING INCORRECT INFORMATION Inform the credit reporting company, in writing, what information you think is inaccurate. Include copies of supporting legal documents Clearly identify the information in question. Explain the facts and why you’re disputing the information, and request that it be removed or corrected Enclose a copy of your report with the items in question circled. Send your letter by certified mail, “return receipt requested” Keep copies of your dispute letter, enclosures, and receipt

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CREDIT MONITORING SERVICES Businesses who claim to check your credit for you, allow you access to your credit report and score at all times, and alert you if there are any changes in your credit. Some companies offer help if ID Theft occurs. Costs -$10-15 a month " Credit monitoring is grossly overpriced," says Gail Hillebrand, senior attorney for Consumers Union ( which publishes Consumer Reports ) “ I can think of a lot of other ways to spend $150 a year. -- John Ulzheimer President of consumer information for financial education website Credit.com ”

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Carefully check any Credit Counseling Service Self-Help: dispute errors, contact creditors, create a budget, payment plans REBUILDING YOUR CREDIT Avoid credit repair scams ! “Bad Credit, No Problems!” CCCS Money Help Line “We can erase your bad credit % Guaranteed!”

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MANAGING DEBT Rip off the band aid: assessment of debt Create Budget Emergency Fund Call Creditors Payment Plan How to choose what to pay first? Is putting Credit Card debt on HELOC a good choice?

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CREDIT AFTER BANKRUPTCY How long on credit report- 5 years; 7 years; 10 years? Assess behavior – and changes Budget– emergency funds, insurance Secured credit card Student loan repayment Installment loan

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CREDIT SUMMARY 1. Check your credit report 2. Know your credit score 3. Shop around for credit 4. Pay bills on time 5. Be in charge of debt 1. Check your credit report 2. Know your credit score 3. Shop around for credit 4. Pay bills on time 5. Be in charge of debt

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