credit scores and reports zach gosciminski. what is a credit score? a credit score is a complex...

Credit Scores and Reports

Zach Gosciminski

What is a credit score?

• A credit score is a complex mathematical model that evaluates many types of information in a credit file.

• A credit score is used by a lender to help determine whether a person qualifies for a particular credit card, loan, or service.

• Most credit scores estimate the risk a company incurs by lending a person money or providing them with a service

https://www.annualcreditreport.com/cra/index.jsp

What is a credit file disclosure or a credit report?

• A credit report, provides you with all of the information in your credit file maintained by a consumer reporting company. Also includes a record of everyone who has received a consumer report about you from the consumer reporting company within a certain period of time.

• You are entitled to receive a disclosure copy of your credit file from a consumer reporting company under Federal law and the laws of various states.

https://www.annualcreditreport.com/cra/index.jsp

Where Do Credit Reports Come from?

• Consumer Reporting Agency (CRA) collect information about your credit activities, store it in giant databases, and charge a fee for supplying the information. The most common type of CRA is the credit bureau.

http://www.frbsf.org/publications/consumer/creditreport.html#where

Where do you get a CRA?

• Equifax P.O. Box 105873Atlanta, GA 30348http://www.equifax.com (800) 685-1111 Trans UnionConsumer Disclosure CenterP.O. Box 1000Chester, PA 19022http://www.transunion.com (800) 916-8800 or (800) 888-4213 Experian (formerly TRW)P.O. Box 2104Allen, TX 75013-2104http://www.experian.com (888) 397-3742

• http://www.frbsf.org/publications/consumer/creditreport.html#where

Where do you get your Credit Report?

• There are three major credit bureaus that operate nationwide, Equifax, Experian and TransUnion. A free credit file can be requested through www.annualcreditreport.com or by contacting the companies directly by phone or by mail as listed below.

• Provide, your name, current and previous addresses, telephone number, social security number, date of birth, copy of your driver's license, utility bill(s), or bank statement may be required. Keep in mind that the three large bureaus do not necessarily share information with each other. The content of your credit report can be different at each bureau, so it's a good idea to request copies from each one.


How Long Does Information Stay on Your Credit Report?

• 7 years!!!!1 If you file for personal bankruptcy 10 years!!!

http://www.frbsf.org/publications/consume/creditreport.html#where

Where Do the Consumer Reporting Agencies Get Their

Information?

• Department stores that issued you a credit card or a bank that granted you a personal loan.


Who Decides whether or not to Grant You a Loan?

• The lenders make the decision. Credit-reporting companies only supply the information about your credit history.


Why Should You Obtain a Copy of Your Credit Report?

• To avoid any unwelcome surprises! Apply for credit such as car loans, mortgages, or credit cards.

• Errors in credit reports can be common.


Can a CRA report negative information about you?

• YES… Duh!

Do you have to receive all three credit reports at the same time or can you space

them out?• One free credit report every 12

months from each of the nationwide consumer credit reporting companies. It is your choice if you order all three credit reports at the same time.

• https://www.annualcreditreport.com/cra/helpfaq#order

Do the Credit Agencies keep credit reports on children? If so how do you

get a copy?

• The credit reporting agencies do not knowingly maintain credit files on minor children.

• https://www.annualcreditreport.com/cra/helpfaq#order

How can I exclude my name from nationwide consumer credit reporting companies lists for

unsolicited credit and insurance offers?

• Request that consumer credit reporting companies exclude your name from lists for pre-approved, unsolicited credit and insurance offers. To find out more, call 1–888–5OPTOUT (1–888–567–8688).

https://www.annualcreditreport.com/cra/helpfaq#excludename

How do I contact the federal trade commission?

• Federal Trade CommissionConsumer Response CenterRoom 130600 Pennsylvania Avenue, N.W.Washington, D.C. 20580 www.ftc.gov/credit

• https://www.annualcreditreport.com/cra/helpfaq#excludename

What about companies that claim the can improve my credit for a fee?

• These companies, commonly called credit clinics, don't do anything for consumers that consumers cannot do for themselves at little or no cost. Beware of any organization that offers to create a new identity and credit file for you.

• Here are some warning signs that the FTC and others say consumers should look out for to determine if they might be dealing with a credit clinic:

• An organization that guarantees to remove late payments, bankruptcies, or similar information from a credit report

• A company that asks the consumer to write to the credit reporting company and repeatedly seek verification of the same credit account information in the file, month after month, even though the information has been determined to be correct

• An organization that is reluctant to give out their address or one that pushes you to make a decision immediately

• https://www.annualcreditreport.com/cra/helpfaq#excludename

Is it safe to provide my SSN to AnnualCreditReport.com?

• You must enter your Social Security Number to receive a free credit report through AnnualCreditReport.com. You can choose to have your credit report display no more than the last four digits of your Social Security number.

https://www.annualcreditreport.com/cra/helpfaq#excludename

What should I do if a suspect a fraudulent email regarding this

service?

• If you suspect you have received a fraudulent e-mail, please contact us immediately by using the Consumer Comment Form. At https://www.annualcreditreport.com/cra/helpfaq#excludename

How do Errors in reports happen?

• Human Errors! • http://www.frbsf.org/publications/consumer/

creditreport.html#errorshappen

What should you do if you disagree with something on your credit

report? • Write to the CRA that has the error on

your report. Giving them the exact details, the name of the company, acct#, amount, your reason for disputing the charge.

http://www.ftc.gov/bcp/conline/pubs/credit/crdtdis.htm

Where should disputes with your credit report be sent?

• Equifax: 1-877-576-5734; www.alerts.equifax.com

• Experian: 1-888-397-3742; www.experian.com/fraud

• TransUnion: 1-800-680-7289; www.transunion.com

https://www.annualcreditreport.com/cra/helpfaq#findinfo

How do I request a “fraud alert” to be placed on your file? What is a fraud

alert?• You have the right to ask that nationwide consumer credit reporting

companies place "fraud alerts" in your file to let potential creditors and others know that you may be a victim of identity theft.

• A fraud alert can make it more difficult for someone to get credit in your name because it tells creditors to follow certain procedures to protect you.

• It also may delay your ability to obtain credit. • Equifax: 1-877-576-5734; www.alerts.equifax.com • Experian: 1-888-397-3742; www.experian.com/fraud • TransUnion: 1-800-680-7289; www.transunion.com

https://www.annualcreditreport.com/cra/helpfaq#findinfo

What if the CRA stands by the report? What do you do then?

• You have the right to present your side of the story in writing, which the credit bureau must attach this to your credit file.

• Anyone requesting a copy of your credit report would also automatically receive your statement (or a summary of it.

• http://www.frbsf.org/publications/consumer/creditreport.html#whatif

What should you do if you are denied credit based on something on

your credit report? • The lender who denied you credit must give you the

name and address of the credit bureau that produced the credit report.

• The credit bureau must tell you the nature and substance of all information contained in your report. It must also tell you the sources of the information and who has received your report for the previous six months.

• Late and missed payments will show up on your credit report and hurt your chances of being approved for credit, life insurance, or employment.


How do you get a copy of your credit report?

• You are entitled to receive one free credit report every 12 months from each of the nationwide consumer credit reporting companies—Equifax, Experian and TransUnion. To contact the three major credit bureaus:



What are credit scores used for?

• Lending decisions. • insurance and employment approvals.

• http://banking.about.com/od/creditscoresandreporting/a/whatiscredit.htm

What are the two kinds of credit reports?

• Single Bureau Credit Report• A single bureau credit report provides your credit

information from only one of the three major credit bureaus.

• Three Bureau Credit Report• A 3 bureau online credit report provides your credit

from all three major credit bureaus, Experian, Equifax and TransUnion. The 3 bureau credit report lists all of your credit accounts, line-by-line, bureau by bureau, which allows you to see everything that's being reported about your credit and your financial history.

• http://www.creditreport.com/creditreports/credithistory/credit-report-types.aspx

What is the range of credit scores?

• 800-850+ Credit Score• A credit score of 800-900 is basically AWESOME credit!!• 720-799 Credit Score• A credit score of 720-799 is considered great credit, and will typically result in interest rates and

approval rates that a credit score in the range of 800-850+ would yield. The only difference might be a few more pricing incentives at the 800-850+ range, and a more thorough credit check in this range.

• 620-679 Credit Score• Credit scores in this range are still considered “good” or “ok” by many creditors, though you may

see further restrictions and fewer approvals when attempting to get a loan, lease, or a mortgage. Scores at this level are fairly common, and no reason for alarm.

• 580-619 Credit Score• This is where “ok” and “good” turn to “bad”. Credit scores in this range are clearly below average,

and you will have a difficult time securing a loan, or applying for a credit card. • 500-579 Credit Score• Credit scores in this range are just flat out ugly. If you’ve got a credit score in this range, there’s a

good chance you have a major derogatory mark on your credit report such as a collection, charge-off, mortgage late, a foreclosure, or a bankruptcy.

• Below 500 Credit Score• Credit scores below 500… YOU SUCK! To fall into this range, your credit report will definitely

contain major derogatory marks, with very little positive data whatsoever. If your credit score is at this level, you may want to consider speaking with a professional about your situation. There’s a good chance you’ve got serious financial problems if your credit score is in this range.

• http://www.thetruthaboutcreditcards.com/credit-score-range/

How often should you check your credit report?

• You are entitled to receive one free credit report every 12 months from each of the nationwide consumer credit reporting companies – Equifax, Experian and TransUnion. This free credit report can be requested through this website, by phone or by mail.

• https://www.annualcreditreport.com/cra/helpfaq#oftenrequest

Is your spouses information included on your credit report?

• In most cases, your credit report will contain only your credit and loan accounts, even after you get married. The exception is joint accounts shared between you and your spouse. In those cases, the account history will be reported on both your and your spouse's credit report, regardless of who uses the account and who pays the bill.

• http://credit.about.com/od/creditreportfaq/f/spousereport.htm

What does FICO stand for?

• FICO stands for Fair Isaac and Company, the company that historically assigned credit ratings…

• http://www.billiondollarincome.com/what-does-fico-stand-for.html

What types of things does your credit score affect?

• Getting loans

• Credit Cards

Who is allowed to see your credit report?

• Creditors who are considering granting or have granted you credit.

• Employers considering you for employment, promotion, reassignment, or retention.

• Insurers considering you for an insurance policy or reviewing an existing policy

• Government agencies reviewing your financial status or government benefits

• Anyone else with a legitimate business need for the information, such as a potential landlord.

• http://www.frbsf.org/publications/consumer/creditreport.html#who

Quiz!• What is the range of credit scores? 500-850• What are CRA’s? Credit reporting agencies • What color shirt am I wearing? Today purple • Why Should You Obtain a Copy of Your Credit Report?

To make sure your identity isn't stolen• Do you have to receive all three credit reports at the same

time or can you space them out? You can space them out• What about companies that claim the can improve my

credit for a fee? You can do the same thing they do for free

• What does FICO stand for? Fair Isaac and Company

Why should a person contact the Federal Trade Commission?

• The FTC deals with issues that touch the economic life of every American. It is the only federal agency with both consumer protection and competition jurisdiction in broad sectors of the economy.

• So if you think, or know that your identity has been used by someone!

http://www.ftc.gov/ftc/about.shtm

What is the average credit score for most people?

• The national average credit score is 692 (January 2011).

http://www.money-zine.com/Financial-Planning/Debt-Consolidation/National-Average-Credit-Score/

freecreditreport.com vs annualcreditreport.com

• AnnualCreditReport.com is a centralized service for consumers to request free annual credit reports. It was created by the three nationwide consumer credit reporting companies - Equifax, Experian and TransUnion.https://www.annualcreditreport.com/cra/helpabout

• Free Credit Report…. IMPORTANT INFORMATIONWhen you order your $1 Credit Report and Score here, you will begin your 7-day trial membership in Triple Advantage®. If you don´t cancel your membership within the 7-day trial period*, you will be billed $14.95 for each month that you continue your membership. You may cancel your trial membership anytime within the trial period without charge

• www.freecreditreport.com

What makes up your Awesome Credit Score?!

• 35% History of paying bills on time • 30% How much debt you have • 15% How long you've had credit at various

places • 10% Recent applications for new credit • 10% Types of credit you have (mortgages, credit

cards, car loans, etc) • .0000123% How many Taylor Swift CDs you

have on your IPod. http://ago.mo.gov/cgibin/ConsumerCorner/blog/showPost.cgi?

id=10231

Just one more time!



credit scores and reports zach gosciminski. what is a credit score? a credit score is a complex...

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