1. Credit Reports and Credit Scores By Julie Chapman For

2. Credit Reports All consumers who use credit have a credit report All consumers who use credit have a credit report Three Major Credit Bureaus: Three Major Credit Bureaus: EquifaxEquifax TransunionTransunion ExperianExperian

3. What does it include? Personal Information Personal Information Name, Address, Social Security #Name, Address, Social Security # Employment - current and former Employment - current and former Account Information - what you owe now or open accounts and payment history Account Information - what you owe now or open accounts and payment history Public Records – liens, judgments, bankruptcies Public Records – liens, judgments, bankruptcies

4. What does it include? Inquiries - when you applied for credit Inquiries - when you applied for credit Public Records – bankruptcies, liens Public Records – bankruptcies, liens

5. What is NOT included? Bankruptcies > 10 years old Bankruptcies > 10 years old Gender, Ethnicity, Religion, Political affiliation, medical history, or criminal records Gender, Ethnicity, Religion, Political affiliation, medical history, or criminal records Credit Score Credit Score

6. Who can look at my credit report? Potential Lenders and Credit Card Companies Potential Lenders and Credit Card Companies Landlords Landlords Insurance Companies Insurance Companies Employers or Potential Employers Employers or Potential Employers Anyone with your written authorization Anyone with your written authorization

7. Credit Scores Rating used to help a lender decide if you qualify for a particular credit card, loan or service Rating used to help a lender decide if you qualify for a particular credit card, loan or service Different than a credit report! Different than a credit report! Estimate of the risk a company assumes for lending you money Estimate of the risk a company assumes for lending you money

8. Credit Scores FICO score is most commonly used. FICO score is most commonly used. Higher Score = Less Risk Higher Score = Less Risk Math model that evaluates many types of info in your credit file including your credit report. Math model that evaluates many types of info in your credit file including your credit report.

9. Credit Scores What is in a FICO score? Graph is from www.myfico.comwww.myfico.com

10. What affects your credit score? Payment History Payment History Late paymentsLate payments How long payments have been lateHow long payments have been late Number of late balancesNumber of late balances Number of accounts paid off on timeNumber of accounts paid off on time BankruptcyBankruptcy Write-offsWrite-offs CollectionsCollections From www.myfico.com

11. What affects your credit score? Amounts Owed Amounts Owed Types of accounts owedTypes of accounts owed Number of accounts owedNumber of accounts owed Proportion of balances owed to credit limitProportion of balances owed to credit limit From www.myfico.com

12. What affects your credit score? Length of Credit History Length of Credit History Time since account openedTime since account opened Time since activity on accountTime since activity on account From www.myfico.com

13. What affects your credit score? New Credit New Credit Number of recently opened accountsNumber of recently opened accounts Number of recent credit inquiriesNumber of recent credit inquiries Re-establishment of positive credit history following payment problemsRe-establishment of positive credit history following payment problems From www.myfico.com

14. What affects your credit score? Types of Credit Used Types of Credit Used Number of various types of accountsNumber of various types of accounts From www.myfico.com

15. Credit Scores Scores range from 300 – 850 Scores range from 300 – 850 680 used to be considered very good. Now 720. 680 used to be considered very good. Now 720. Majority 600 - 700 Majority 600 - 700

16. Credit Reports & Credit Scores Both are used to assess risks of loan money, hiring, leasing to, etc. Both are used to assess risks of loan money, hiring, leasing to, etc. Some use only the credit score, but often other factors are considered. Some use only the credit score, but often other factors are considered.

17. Credit Reports & Credit Scores Recommended to check credit reports and scores once a year with each credit bureau: Recommended to check credit reports and scores once a year with each credit bureau: Equifax Equifax Transunion Transunion Experian Experian

18. Credit Reports & Credit Scores Law requires 2 free credit reports per year. Law requires 2 free credit reports per year. Must be requested. Must be requested. Go to the following site to request Go to the following site to request www.annualcreditreport.comwww.annualcreditreport.comwww.annualcreditreport.com