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Assistive Technology Webinar Series Brought to you by Michigan’s Assistive Technology Program at MDRC. 1 1 About the Webinar Use the public chat area on the right hand side. Questions and comments are encouraged and expected! The session is being recorded. We will start recording now. 2 Build Your Credit Repairing and Establishing a Positive Credit History Adapted from the FDIC Money Smart Curriculum Presenter: Michele Seybert 3 You will Learn Credit report – what is it and how is it used? How to order a copy of your credit report. What a credit report looks like. Identify ways to build and repair your credit history. How to minimize the risk of identity theft 4 Credit Report A credit report is a record of how you have paid your debts. It tells lenders: Who you are. How much debt you have. If you pay your bills on time If there is negative information about you in public records. 5 What does a credit report say? Identifying Information Name Social Security number Current and previous addresses Telephone number Birth date Current and previous employers Spouse’s name 6 Credit Score The credit score is: A number that predicts how much of a credit risk you will be. Calculated based on information in your credit report. 7 FICO Score or Credit Score Scores range from about 300 to 900. How do they get that number? Past payment history – 35 percent Outstanding debt – 30 percent How long you've had credit – 15 percent New applications for credit – 10 percent Types of credit – 10 percent 8 FICO Score – Where does it come from? A chart showing Percentage of credit score: Payment history 34% Outstanding Debt 30% credit lenght 15% new credit apps 10% types of credit 10% 9 Boosting Your Score Pay off your debt Pay on time Only open accounts you need Don’t close old accounts Keep track of your credit score 10 Credit History Your credit history is your account record with different creditors. It will show how many loans you have received and how you have repaid each loan. 11 Inquiries and Your Credit Score When you apply for credit, you allow the lender to ask for a copy of your credit report — an inquiry. Your credit score may drop if you apply for new credit. Most credit scores are not affected by several inquiries from auto or mortgage lenders within a short period of time (30 days). 12 Inquiries A list that shows who has requested and viewed your credit report. The only inquiries that count toward your FICO score are the ones that result from your applications for new credit. 13 Public Record Information Items that are matters of public record Collection accounts Bankruptcies Foreclosures Tax liens Civil judgments Late child support payments. 14 Public Record Definitions Tax Lien - claim against property, or assets, filed by the taxing authority for unpaid taxes Judgment - court order placing a lien on a debtor’s property as security for a debt owed to a creditor 15 Public Record Definitions (Cont.) Collection account - past due account that has been referred to a specialist to collect part of all of the debt Bankruptcy - legal proceeding that can legally release a person from repaying debts 16 How long will a public record stay on your report? Time on Credit Report Negative Information General civil judgments Tax liens Collection accounts Chapter 13 bankruptcy 7 years from date filed 7 years from date paid 7 years from last activity 7 years from date of discharge 10 years Chapter 7 bankruptcy 17 Credit Reporting Agencies Equifax Experian TransUnion 18 How Your Credit Report Is Used Information in your credit report may determine whether you will: Get a loan or other form of credit. Get a job. Rent an apartment. 19 How to get a copy of your Credit Report - Website If you have a computer that can access the internet you can go to www.annualcreditreport.com to get a free copy of your credit report. Caution: Misspelling this site or using another site with similar words will take you to a site that will try to sell you something or collect your personal information. 20 www.AnnualCreditReport.com 21 Required Information Name Date of Birth Social Security Number Address Previous address - if less than two years at current address Click Submit 22 Other ways to get your free credit report By Mail By Phone - Call toll-free 877-322-8228 These are the only ways to get free credit reports without any strings attached. The "free" credit reports advertised by other sources are not really free! 23 Tips on Building Credit History Apply for small loan where you already bank. If possible, make a large down payment on a purchase. Ask a friend/relative to be a cosigner. Pay bills on time. Ask lender to review rent and utility payments. Make regular payments to savings. 24 The Truth About Credit Repair No one can remove accurate information from your credit report. It can take years to repair your credit. No one can create a new identity for you. 25 The Truth About Credit Repair (Cont.) Legitimate companies provide a service before requesting payment. You can order your credit report yourself. 26 Avoiding Identity Theft Protect your social security number, credit and debit card numbers, PINs, and passwords. Protect incoming and outgoing mail. Sign up for direct deposit. Shred financial information before placing in trash. Keep close eye on bank and credit card statements. 27 Avoiding Identity Theft (Cont.) Avoid ID theft on computer. Exercise rights under FACTA (Fair and Accurate Credit Transactions Act). Visit the Federal Trade Commission Website: www.ftc.gov/idtheft/ 28 Victim of Identity Theft If a victim, act fast! You are entitled to place a fraud alert on your file. You can receive copies of your credit report from each of the three CRAs free of charge – regardless of whether you have previously ordered your free annual reports. 29 Resources Federal Deposit Insurance Corp. (FDIC) Money Smart Financial Education http:www.fdic.gov/consumers/consumer/moneysmart/over view.html • Your Money: the Missing Manual By J.D. Roth • Pursuit of the Dream: Building Credit For Life (20 minute video) Available at www.aecf.org 30 Questions? Contact me if you have any questions: Michele Seybert 800-828-2714 [email protected] 31 Thank you! Thank you for completing the online survey about this webinar. A link will be emailed to you. If you do not want to receive email notices of future assistive technology webinar opportunities, please send an email to [email protected] and ask to be removed from the AT Webinar list. 32 Final Thoughts "The only real mistake is the one from which we learn nothing." -John Powell "Even if you are on the right track, you'll get run over if you just sit there." -Will Rogers 33