1. By Your Name Company Telephone Number & URL
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Understanding Your
Credit Score
By Your Name
Company
Telephone Number & URL

2. 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

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

4. 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

5. 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, Year Fixed Home Loan, a borrower who increases his or her credit score from 620 to 740+ can potentially save $ per month on mortgage payments, $00, per year, and approximately $ over the life of the loan.

6. 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

7. Payment History – 35% WHAT YOU SHOULD KNOW
A recent 30-day late can cost you 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

8. 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

9. 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

10. 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

11. 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.

12. Contact Us
Your Company Name
Address
Phone
Fax
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