Credit Reports and Credit Scores

This program is made possible by a grant from the FINRA Investor Education Foundation through Smart Investing@Your Library®, a partnership with the American

Library Association.

What will we discuss?

• Accessing your FREE credit reports.

• What is in your credit report?

• How can you dispute inaccuracies in your report.

• Credit Scores

Credit Report vs. Credit Score

Your CREDIT REPORT is like your report card in school, it provides details about your borrowing history.

Your CREDIT SCORE is like your grade point average or a number that summarizes the info in your report. Scores range between 300-850.

Fair Credit Reporting Act (FCRA)

• Allows you to receive three free copies of your report each year.

• Regulates who gains access to your report.

• FCRA enforced by Federal Trade Commission.

• FCRA states that inaccuracies must be corrected.

Additional Free Credit Reports

• You are also entitled to one additional report during a 12 month period if:

• Unemployed and are applying for a job in the next 60 days.

• Receiving public assistance.

• You believe there is inaccurate information due to fraud.

• You have been the subject of adverse action, such as denial of credit or insurance, within 60 days.

Free Access to Your Credit Reports

www.annualcreditreport.com

Phone: 1-877-322-8228

Write: Annual Credit Report Request Service P.O. Box 105281 Atlanta, GA 30348-5281

What do I need to order my report?

Your Name, Your Address, Social Security Number, Date of Birth

All addresses you have lived in the last 2 years

Answers to 4 or 5 identifying questions

Annual Credit Report.com

• www.annualcreditreport.com is the ONLY website authorized to fill the free orders.

• Annualcreditreport.com will never send an email or call you looking for your information.

• If you receive an email from someone claiming to be Annual Credit Report contact the FTC immediately and send the email to spam@uce.gov.

What is in your credit report?

Credit Report

Inquiries

Personal Information

Negative Information

Public Records

Trade Lines or Credit

Information

What is NOT on your report

NOT on your credit report

Current Medical Bill Payments

Savings and Checking Account

Information

Current Utility Bill Payments

Current Rent payments

How long will information stay on your report?

Type of Information How Long Will It Stay

Negative Information 7 years

Chapter 13 Bankruptcy 7 years

Chapter 7 Bankruptcy 10 years

Criminal Convictions Indefinitely

Positive Information Indefinitely

What does that mean?

• An account is written off as a loss by the lender or creditor.

• The creditor can still attempt to collect.

• Stays on your report for 7 years from the date it first went into a continuous delinquency

Charged off

• Result of lawsuit in court.

• Judgements can stay on your report for 7 years or until the statute of limitations runs out (whatever is longer)

• TALK TO AN ATTORNNEY.

Judgments

What will the online order look like?

Fixing Errors in Your Report

1.

• Contact the Credit Bureau in writing about any errors. Include proof supporting your claim if you have it.

• They will conduct an investigation. (Usually within 30 days)

2.

• The Credit Bureau will contact the creditor or whoever provided the information and the creditor must also conduct an investigation.

• If the creditor determines that there were errors they are expected to notify the other credit bureaus.

3.

• If changes are made you will receive a free copy of your report. You can also ask the credit bureaus to send the corrections to anyone who received your report in the past six months.

• You can also contact the creditor directly with a dispute letter and copies of your documentation.

Fixing Errors Continued

• If you need further assistance file a complaint with the Consumer Financial Protection Bureau at https://help.consumerfinance.gov/app/creditreporting/ask

• You can use the sample dispute letter from the Federal Trade Commission or you can dispute the information online. – http://www.consumer.ftc.gov/articles/0485-sample-letter-disputing-errors-your-credit-report-information-providers

Denied Credit?

• If you have been denied credit because of information in your credit report the lender who denied the loan must give you instructions for requesting your report from the credit reporting agency.

• The instructions should be with the notice of declination.

• You are only able to receive the extra free report from the company who denied the credit.

Credit Scores

• Scores range from 300-850

• There are 53 different FICO scores in existence.

• VantageScore has 3 scores.

• Banks also have various scores.

• FICO is the most common

How Can I See My Score?

• Mortgage lenders are required to show you the 3 scores used on the loan application.

• Must be shown your score if you are denied credit or are offered less than the best terms.

• Sometimes the Credit Bureaus will provide your scores for educational purposes, but make sure you are not signing up for a paid service if you don’t really want it.

Credit Scores

4. Credit Mix (10%)

5. New Credit (10%)

1. Payment History (35%)

2. Amounts Owed (30%) 3. Length of Credit History (15%)

What’s Not in Your Score?

• Race, Religion, Marital Status, Gender

• Your Age

• Your salary, job title, employment history

• Where you live

• Interest rates paid

• Child support or alimony payments

• Whether or not you participate in credit counseling

• Any information NOT found in your credit report

Credit Score Myths

False: My score will drop if I apply for new credit.

Looking for new credit can indicate you are a higher risk, but comparing interest rates with a few different mortgage companies or car companies will show up as one inquiry and should not hurt your score.

False: A bad score will hurt my credit forever.

Your credit score is just a snapshot in time and as you manage your credit well and as time passes your score can improve.

Improving Your Credit

• Secured Credit Cards

• Secured Line of Credit

• Peer Lending Circles

• First time borrower programs

• Ask your landlord or utility company if they could write a character letter to show you pay on time.

• Remember, all is not lost and with time you can improve your credit.

• Watch your utilization ratios or the amounts owed.

• Make your payments on time.

Helpful Resources

• Legal Help • Utah State Bar: http://www.utahbar.org/public-

services/free-legal-clinic-programs/

• http://www.utcourts.gov/selfhelp/#consumer

• Utah State Bar Debtor’s Counseling Legal Clinic » This clinic is held on the Second Tuesday of each month

from 5 to 7 p.m. You are welcome to walk in to discuss bankruptcy, collection defense, and credit issues.

» 1234 S Main Street SLC UT 84101

• Tuesday Night Bar » Appointment required

» 645 S 200 E SLC UT 84111 Phone: 801-297-7037

Helpful Resources

• Consumer Protection

– Federal Trade Commission: www.ftc.gov

• Utah Attorney General:

• http://attorneygeneral.utah.gov/

– Consumer Financial Protection Bureau:

• http://www.consumerfinance.gov

Questions

Thank you!

This program is made possible by a grant from the FINRA Investor Education Foundation through Smart investing@your library®, a partnership with the American Library Association.