1. ©2012 Experian Information Solutions, Inc. All rights reserved. Experian and the marks used herein are service marks or registered trademarks of Experian Information Solutions, Inc. Other product and company names mentioned herein are the trademarks of their respective owners. No part of this copyrighted work may be reproduced, modified, or distributed in any form or manner without the prior written permission of Experian. Experian Public. The basics of credit reporting

2. 2 ©2012 Experian Information Solutions, Inc. All rights reserved. Experian Public. Disclaimer  The purpose of this presentation is to help you better understand credit reporting and to provide general information about how you can manage your credit report so that you can get the credit you need and want.  For legal reasons, I: ► cannot discuss issues specific to your personal credit report ► cannot advise individuals about how to improve their personal credit report or credit scores ► cannot submit disputes regarding your personal credit report on your behalf  Information regarding Experian policies and processes is current as of the date of this presentation but may change.

3. 3 ©2012 Experian Information Solutions, Inc. All rights reserved. Experian Public.

4. 4 The Fair Credit Reporting Act Credit reporting companies are governed by the Fair Credit Reporting Act (FCRA) enacted in 1970, revised effective October 1997, amended December 2003 by the Fair and Accurate Credit Transaction Act (FACT Act)

5. 5 ©2012 Experian Information Solutions, Inc. All rights reserved. Experian Public. The benefits of credit reporting  Credit reporting companies serve consumers and businesses by making possible: ► Instant credit ► Lower-cost credit ► Nationwide credit ► Widespread availability ► Account management

6. 6 ©2012 Experian Information Solutions, Inc. All rights reserved. Experian Public.

7. 7 The three national credit reporting companies  Experian  Equifax  Trans Union There are some independent local or regional credit bureaus that provide direct consumer assistance but whose data resides with one of the national credit reporting companies

8. 8 ©2012 Experian Information Solutions, Inc. All rights reserved. Experian Public. Requesting your personal report Experian 1 888 397 3742 www.experian.com Equifax P.O. Box 740241 Atlanta, GA 30374-0241 1 800 685 1111 Trans Union P.O. Box 1000 Chester, PA 19022 1 800 888 4213

9. 9 ©2012 Experian Information Solutions, Inc. All rights reserved. Experian Public. Sources of reports for consumers  Consumer reporting companies ► Referred by adverse action notices ► Fraud ► Unemployed and seeking employment ► Receiving welfare assistance ► Free reports under some state laws ► Purchase additional reports  FACT Act Centralized Source  Consumer direct services

10. 10 ©2012 Experian Information Solutions, Inc. All rights reserved. Experian Public. Centralized source for free reports www.annualcreditreport.com  One every twelve months  Single contact point ► Telephone - 877 322 8228 ► Mail ► Internet  Fee for credit score disclosure

11. 11 ©2012 Experian Information Solutions, Inc. All rights reserved. Experian Public. The credit cycle You pay lender Credit reporting companies share with new lenders Lender updates records Lender shares history with credit reporting companies

12. 12 ©2012 Experian Information Solutions, Inc. All rights reserved. Experian Public. Credit reporting companies are like libraries Credit reporting company clients check out information … … If they have a permissible purpose under the law

13. 13 ©2012 Experian Information Solutions, Inc. All rights reserved. Experian Public. The Fair Credit Reporting Act Permissible purposes  Open or manage credit accounts  Offers of credit  Employment purposes  Underwrite insurance  A business transaction initiated by the consumer  Court order or federal jury subpoena  Valuation of risk of an investor  Eligibility for government license  Disclosure to consumer

14. 14 ©2012 Experian Information Solutions, Inc. All rights reserved. Experian Public. The players in the credit cycle  You  Credit reporting companies  Lenders  Risk score modelers  The government

15. 15 ©2012 Experian Information Solutions, Inc. All rights reserved. Experian Public. Information comes from you Information you provide in an application for credit, housing, or insurance is reported to credit reporting companies Credit Application Jonathan Q. Consumer 999-99-9990 10655 Birch St. Burbank CA 91502

16. 16 ©2012 Experian Information Solutions, Inc. All rights reserved. Experian Public. Information comes from you

17. 17 ©2012 Experian Information Solutions, Inc. All rights reserved. Experian Public. What’s in a credit report?  Identifying information  Account information  Public record information  Inquiries  Dispute instructions

18. 18 ©2012 Experian Information Solutions, Inc. All rights reserved. Experian Public.

19. 19 ©2012 Experian Information Solutions, Inc. All rights reserved. Experian Public. An important note about inquiries  There are two different types of inquires: ► Inquiries shown to potential creditors ► Inquiries shown only to the consumer

20. 20 ©2012 Experian Information Solutions, Inc. All rights reserved. Experian Public. How long is information retained?  Open accounts in good standing  Closed accounts in good standing  Late or missed payments  Collection accounts  Civil judgments  Chapter 7 bankruptcy  Chapter 13 bankruptcy  Unpaid tax liens  Paid tax liens  Credit inquiries Indefinitely 10 years 7 years 10 years 7 years 10 years 7 years 2 years

21. 21 ©2012 Experian Information Solutions, Inc. All rights reserved. Experian Public. What’s NOT in a credit report?  Credit reporting companies do not store: ► Criminal background ► Medical information ► Buying habits / transaction data ► Bank account information ► Credit risk scores

22. 22 ©2012 Experian Information Solutions, Inc. All rights reserved. Experian Public. Initiating a dispute  Must get report directly from Experian ► Toll-free number on report gives you access to customer service ► Report number identifies you and your record ► You and customer service representative will be looking at the same information in the same order  Can dispute online, by telephone or by mail  Dispute must be specific

23. 23 ©2012 Experian Information Solutions, Inc. All rights reserved. Experian Public. Processing a dispute  Credit reporting company verifies with the source of the information (creditor or court)  Must allow up to 30 days for processing  Source verifies, corrects or updates  Secure electronic mail system is used  Creditors required to report corrections to all databases  Consumer can add statement of dispute if issue is not resolved with source

24. 24 ©2012 Experian Information Solutions, Inc. All rights reserved. Experian Public. Beware of credit repair companies  Can’t legally do anything you can do for free  Can’t legally collect fee before delivering the promised service  Can’t legally advise you to lie about your accounts or about your identifying information

25. 25 ©2012 Experian Information Solutions, Inc. All rights reserved. Experian Public. Common myths about credit reporting  When paid, the bad debt will go away  The credit reporting company denied me credit  I’m not responsible for those charges on our account  A divorce decree separates joint accounts  Consumers must give their permission for a report to be issued (employment is the exception)  Requesting your own report and preapproved offers harm your credit history  There is only one credit risk score and it is on every report

26. 26 ©2012 Experian Information Solutions, Inc. All rights reserved. Experian Public. Automated credit risk scoring  Used instead of a manual “score sheet”  Valuable risk management tool  Many different models available from many different sources  Credit reporting companies often apply the model selected by the creditor when delivering the credit report; however, the credit scoring model, or formula, is proprietary to the developer and is not known by the credit reporting company

27. 27 ©2012 Experian Information Solutions, Inc. All rights reserved. Experian Public. Risk factors are the key  Generated when a risk score is calculated  Tell the consumer what to address in their credit history to become more creditworthy  Are largely consistent from model to model  Are usually included in or described in an adverse action notice  Experian provides both positive and negative factors to consumers with scores it provides through its direct-to-consumer services

28. 28 ©2012 Experian Information Solutions, Inc. All rights reserved. Experian Public. Mortgage and auto loan inquiries  Credit scoring systems recognize multiple inquiries may be made for a single mortgage or auto loan and adjust for that type activity  For example, in many models inquiries for those purposes are counted as a single inquiry within any rolling 14-day period, minimizing or eliminating any impact on credit scores

29. 29 ©2012 Experian Information Solutions, Inc. All rights reserved. Experian Public. There is no silver bullet  You can’t “fix” the number  Address the risk factors in your credit management and every risk score will improve  Time is the key

30. 30 ©2012 Experian Information Solutions, Inc. All rights reserved. Experian Public. Resources  Free annual FACT Act report ► www.annualcreditreport.com  Experian ► www.experian.com ● Ask Experian ● Credit education ● Sample credit report ► www.freecreditreport.com ► www.vantagescore.experian.com  Education partners ► www.lifesmarts.org ► www.jumpstart.org

31. 31 ©2012 Experian Information Solutions, Inc. All rights reserved. Experian Public.