1. FICO/Credit Score What is FICO/Credit Score?
What Affects your Credit Score?
How do I protect my Credit Score?
How do I build my Credit Score?

2. What is a FICO Score?
A FICO score is a three digit number between 300 and 850 ; Median score is 723; Mean 693
Gives a snapshot of an individuals credit risk
Three Credit Bureaus evaluate your score:
Experian
Equifax
TransUnion
Data can vary between bureaus but are almost always within a small range
Primarily used in the USA but occasionally used in Canada and other regions.

3. National Distribution of FICO Scores
FICO scores based upon the percentage of individuals in the nation

4. FICO Score Chart Score Delinquency Rate 300-499 87% 500-549 71%
51%
31%
15% 5% 2%
800 or higher 1%
Strong Correlation between Credit Score and Delinquency Rate

5. So What’s a Good Credit Score?
FICO Score
Grade
Excellent
Very Good
Good
Fair
Bad
Very Bad

6. Affection of Credit Which Column Affects your Credit Score?
Does not affect
affects
Salary
Occupation
Employment History
Age
Location
Child/Family Support
Payment History
Credit Ratio
Credit History Length
Opening New Lines of Credit
Checking your Credit Score

7. What Affects your Credit Score?
35% Payment History
Credit Cards, Installment Loans (Car, Home, Personal), Late or Missed Payments
30% Credit Utilization Ratio
How much you owe in relationship to limits
15% Credit History Length
How long you have been in good standing
10% Recent Searches For Credit
Seeking and Applying for New Lines of Credit
10% Other Factors
History of successfully managing different credit types
Recent Searched for Credit - A credit inquiry occurs whenever you seek for and apply for a new line of credit (e.g applying for a new credit card or home loan) – this information is added to your credit report and is used by FICO in calculating your score.

8. How do I Protect my Credit Score?
Preventive/Proactive Measures
Budget your money
Pay your bills on time
Set up direct deposit for all bills
7 year history for late & delinquent payments (90 days)
Verify all transactions at the end of month
Credit cards, bank statements, debit cards
Whenever you pply for loans or credit cards it affects your score; though small it shows up and also makes creditors wonder why you are doing so. Essentially they are attempting to see if you are a higher risk.

9. Preventive/Proactive Measures Continued
Don’t apply for new credit
Costs you 5 to 50 points per inquiry
Wait until your credit score is high enough to apply
Keep your oldest account open
15% comes from your credit history
Check your credit score periodically or join a credit monitoring program for you personally or your accounts
Prevent others from opening accounts in your name
Best measure is to check your history personally

10. How do I Build my Credit Score?
Reactive Credit Repair
Pay down any existing debt you have
(Revolving Credit)
Revolving Debt divided by Total Revolving Credit
(What you owe divided by What is available to spend)
Greater than 0.3 will negatively affect your score
0.1 to 0.3 range will increase your credit score
0.0 is considered neutral
Open different types of credit
Revolving Credit (Credit Card) and Installment (Home Loans, Car Loans, Student Loans)
0.3+ is negative because you carry huge debt. 0.1 to 0.3 increases your score because this is manageable debt and creditors earn interest off of you. 0.0 rating is neutral because creditors make nothing off a zero balance.
Home loans and car loans are good to build credit since you are on a continuous payment plan. It allows you to see your history of making on time payments showing your credit worthiness.

11. Quiz: Good, Bad, Neutral Is My Revolving Credit Good or Bad? Lisa Bob
Total Revolving Debt $400
Total Revolving Credit $1500
Bob
Total Revolving Debt $440
Total Revolving Credit $1200
Jane
Total Revolving Debt $0
Why it is important to pay off credit card debt prior to going in for a loan. Though if you have a bank account with enough funds to make a payment it can be overlooked, it is best to take precautionary measures. It may take several days to a week to show up on report so do so ahead of time.
Ashley 400/1500=0.26 Good, Airleah 440/1200=0.36 Bad, Justine – 0/1200 Neutral

12. Why Do You think Credit Scores typically improve with age?
Age Range
Average Credit Score
18-24
638
25-34
652
35-44
659
45-54
685
55+
724
Less debt to worry about (higher disposable income), experience with money management, manage their own debt well. Time to establish a credit history versus new individuals to credit.

13. How Am I Affected by My Score?
FICO Score
Grade
Typical Mortgage Rate
Excellent A
Very Good
A %
Good
A %
Fair
A %
Bad
A %
Very Bad
A %
A stands for Annual Percentage Rate. Talk about the effect of paying more for something when it is not needed. Fries for 99 cents or $1.03. Which would you rather pay? What could you do with 4 cents? How about after 25 times of saving 4 cents?

14. How Am I Affected by My Score
Home Loan
$250,000
Fixed APR
30 Years

15. How Am I Affected by My Score?
FICO Score
APR
Monthly Payment
Total Interest Paid
4.36%
$1,246.00
$198,561.48
4.49%
$1,265.23
$205,481.51
5.01%
$1,343.58
$233,690.69
6.16%
$1,524.69
$298,887.52
8.66%
$1,950.70
$452,257.16
9.36%
$2,076.65
$497,588.28

16. How Much Would I Save? FICO Score APR Monthly Payment
Total Interest Paid
4.36%
$1,246.00
$198,561.48
4.49%
$1,265.23
$205,481.51
5.01%
$1,343.58
$233,690.69
6.16%
$1,524.69
$298,887.52
8.66%
$1,950.70
$452,257.16
9.36%
$2,076.65
$497,588.28
FICO Score
Monthly Saving
Annual Savings
Total Savings
$0.00
$19.23
$230.67
$6,920.03
$97.58
$1,170.97
$35,129.21
$278.69
$3,344.20
$100,326.04
$704.70
$8,456.52
$253,695.68
$830.65
$9,967.56
$299,026.80

17. How Else Does My Credit Score Affect Me?
Loans, Credit Cards
Investments/Partnerships
Why would someone want to check your personal finances when you want to partner with them?
Renting a home
Why do you think they may request a credit check?
Career/Jobs
Credit Checks on Credit Score
Some positions require you have a higher rating
What jobs may require a higher credit rating?
Why do you think that’s important?
Financial Institutions or other areas involving handling of monies or where fraud could be committed to benefit from.