1. Credit: Reports and Scores
Advanced Level

2. The Credit Process
Credit – goods, services, and/or money received in exchange for a promise to pay back a definite sum of money at a future date
Borrower
Someone who receives something with the promise to return it or to repay what is borrowed
Lender
Person or organization who makes funds available for others to borrow
Credit History
Record of the borrower’s past loan and credit-related transactions

3. Key Definitions
Credit score: a three digit number that summarizes how well a person or business has handled debt. The higher the number, the better.
Credit limit/line: amount of money that can be charged to a credit card. The size of a credit limit, and how much of it has been borrowed, have a large influence on consumer credit scores.
Invoice: another term for a bill; shows individual purchases and amount owed, including interest rates, fees, etc.
Late fee: result of credit card company not receiving/posting your payment by the due date
Minimum amount due/payment: lowest amount of money that you are required to pay on your credit card statement each month, usually 3-5%

4. Credit Reporting Agencies
Three U.S. Agencies:
- Equifax
- Experian
- TransUnion
If credit has never been used (or reported) an individual will not have a credit report
A person’s credit report may vary across the three CRA’s

5. Credit Account Information
Specific information about each credit account you have or have had
Types of Information
Type of Credit
Loan Amount or Credit Limit
Date
Account Balance
Payment Information

6. Closed-end credit (installment) Open-end credit (revolving)
Types of Credit
Closed-end credit (installment)
Open-end credit (revolving)
Borrower repays a specified number of equal payments
Line of credit established in advance
Definition
Contract outlines repayment terms
Borrower chooses how much to pay
Features
Automobile loans Education loans Mortgages
Examples
Credit cards

7. Information from federal, state and county
Public Records
Information from federal, state and county
public court records
Collection Agencies
Businesses hired by lenders to pursue payments on debts not paid back according to contract terms
Bankruptcy
When an individual or business is not able to repay outstanding debts
Tax liens
Taxes not paid in full
Foreclosure
Borrower fails to keep up with mortgage payments and the lender takes possession of the property
Does Isabella have any public records?

8. Inquiry Information Potentially Negative Typically No Impact
Seeking additional credit
Typically No Impact
Inquiries not initiated by you
Impact is reduced if shopping for the same type of loan within a 14-day period
Inquiries not related to credit
Checking your own report