1. Welcome To N.C.E.S. Credit Restoration & Education Seminar

2. AGENDA Introduction / NCES Mission
Credit Pitfalls, Traps and the remedy to over come these situations
Common Misconceptions
Personal Credit, Budgeting & Moving Forward
Conclusion
Questions & Answers

3. NCES MISSION To educate the masses on the pitfalls of credit
To leverage credit to build assets not liabilities
To empower people to navigate their finances confidently
Our is to restore America by restoring you
Let us help you navigate the financial restructuring of your life

4. THE FAIR CREDIT REPORTING ACT OF 1971
The Fair Credit Reporting Act (FCRA) was passed by congress with
the intention to regulate the credit reporting agencies and promote
the accuracy of the information in consumer credit reports.
The Act spelled out all the rules and regulations that the credit
reporting agencies had to follow before they added anything to a
consumer’s credit report. Information about “you” has to be
accurate and verified before it is entered on your credit reports.
The Federal Trade Commission is the government agency
responsible for Enforcing the Fair Credit Reporting Act.

5. CREDIT REPORTING AGENCIES
3 Major Reporting Agencies
Experian (Fair Isaac Corporation)
Equifax (Beacon)
TransUnion (Empirica)
Functions of CRA’s
Collect and maintain information about consumer’s credit history.
This information is obtained from banks, credit card companies and
various financial institutions.
The CRA’s sell this information to lenders and other creditors.
The CRA’s are not part of the government.

6. COMMON CREDIT ERRORS
Inaccurate Information: Information that cannot be verified by
the CRA and/or the creditor grantor
Erroneous Information: Information that has been entered onto
a consumer’s credit report due to human error (data entry error),
Social Security Number mismatch error, mixed file error, similar
name error, or when “reasonable procedures” were not followed
when the information was entered on the credit report, or any
such related error
Obsolete Information: Information that is beyond the industry
standards of seven years; or ten years for bankruptcy

7. CREDIT REPORT ACCURACY
Nearly 80% of all consumer credit reports have significant errors
25% of which are serious enough to potentially result in a credit
denial
These errors could affect credit scores by 50 points or more
HOW DO THESE ERRORS OCCUR?
Loans, payment data or credit card information is applied to the
wrong account
Name consistency, i.e. John Carl, John Karl, John J. Karl
Human error when applications are reviewed, sold or transferred
between lenders

8. WHAT ARE FICO CREDIT SCORES?
A statistical methodology to evaluate an individual’s credit worthiness
It’s a Reflection of a person’s credit behavior, character and financial state.
Creditors use FICO scores to determine an individual’s interest rate and
credit limit and the ability to borrow.
FICO scores range from 300 to 850 points

9. 35% 30% CREDIT COMPOSITION 10% 15% HOW CREDIT AFFECTS YOU
5 KEY COMPONENTS OF A CREDIT SCORE
Paid as agreed
Balance vs. credit limit
Length of credit history
Type of credit
Credit Inquiries
HOW CREDIT AFFECTS YOU
The interest rate you pay on credit cards and loans
Your ability to get a checking account
Rates on your auto insurance
Employment
Utilities

10. 6 METHODS TO ESTABLISH CREDIT
Apply for a secured credit card, ex. Bank card
Maintain a low balance on the card
Establish a long history with the account
Errorless late payment history
Re-establish student loans, deferment
Obtain a small auto loan

11. SECURED CREDIT CARDS One of the best ways to establish credit
Apply on-line for a secured card, one accepted
anywhere – NOT a catalog card
Purchase a $200 - $500 bond from the bank and
use it to establish a line of credit

12. PITFALLS OF SECURED CARDS
Pay on or before the due date to avoid a $35 - $40 late fee
If unpaid, a $40 over the limit fee is incurred
Below example: assume a $300 credit limit, and a late-
payment
Balance
$280
Late fee
$35
Over the limit fee
$40
TOTAL
$355!!!

13. PITFALLS CONTINUED Credit cards charged off
Assigned to a collection agency
Collection agency adds a new derogatory account on your
credit report
Add interest, penalties, legal fees and more fees

14. COLLECTION AGENCIES Governed by the FTC Privately Owned
Operates under the guidelines of the Fair Debt Collection
Practices Act
Debt collectors, whether a company or an attorney’s office
Has to validate the debt

15. ACTUALIZED COST OF AN AUTOMOBILE
2005 Vehicle
Cost = $24,000
86k miles
Monthly Cost
Annual Cost
Total Cost Over the life time of vehicle (72 Mo)
Car Payment
$950
$11,400
$68,400
Car Insurance
(with poor credit history)
$350
$4,200
$25,200
Maintenance/ Repairs
$300
$3,600
$21,600
Gasoline
$800
$9,600
$57,600
TOTAL
$2,400
$28,800
$172,800

16. OR…. INVEST IN THE FUTURE
A house that sold for nearly $1 million in 2004
Foreclosure price of $380,000 in 2010
FHA loan: credit score with 5.25% rate
= Monthly price of $2,300

17. Actualized cost after 72 months
HUMMER vs. HOUSE
Actualized cost after 72 months
HUMMER
HOUSE
Value = $4,000
$ 1 million
Net loss = $154,400
Net gain = $620,000

18. BUDGETING Rent/Mortgage payment $1,400 Car payment ($350 x 2 cars)
(Based on a monthly average of a family of 4)
Rent/Mortgage payment
$1,400
Car payment ($350 x 2 cars)
$700
Insurance (car, life, health)
$400
Groceries (for family of 4)
Gasoline (2 cars)
$650
Car maintenance (2 cars)
$300
Dry Cleaning
$100
Cell phone bill
$200
Cable bill
Other utilities (electric, gas)
Credit card bills, other
$250
Entertainment

19. BUDGETING Total monthly critical expenses = $5,400
Take-home net income = $6,000
Remainder money
$6,000 - $5,400 = $600
Compounded over 72 months = $60,000!

20. OUR SERVICE Provide the tools and resources necessary to understand:
The FICO scoring system
The Fair Debt Collection Practice Act (fighting collections agencies)
How to protect your credit during hardship (layoff, divorce, death, etc)
How to regain your financial independence and build lasting prosperity
We give you:
On-line educational tools, automated budgeting worksheets; We want to
answer the tough credit questions.
24/7 on-line status updates
Good Credit Gives Me Time For My Family

21. CONCLUSION Understanding everything about credit is key to achieving
financial security
It is important to correct your current situation and establish
a path forward
NCES gives you the tools and resources to establish your
new financial future.

22. NCES COMMITMENT To restore America by RESTORING YOU
Who make America work. If you’re
hurting financially and can’t borrow
due to bad credit, our job is to help
you regain your rightful place in
AMERICA.

23. NCES AT WORK!

24. The Cost Of Financial Freedom?
One Time Payment $349.00 Or
Split Payment Option $ Now
Next Payment In 30 Days $185.00
(Includes $11.00 Processing Fee)
Total $360.00
to break the chains!