Transcript Good Credit

Understanding
Your Credit Report
Women In Agriculture Conference
January 19, 2007
Dover, DE
Megan O’Neil-Haight
Family, Youth & Communities Educator
Crystal Terhune
Family and Consumer Science Educator
“Educating people to help themselves.”
By the end of the training you
will understand:
 How to obtain and interpret your credit
report.
 What information on a credit report is
seen as negative.
 That it is never too late to start to
rebuild good credit.
 Some ways to improve one’s credit.
How do companies know if you
have bad credit?
 Information about your credit is kept by
credit reporting bureaus.



Equifax
TransUnion
Experian
 This information on file
about you is called a
credit report.
What’s on your credit report?
 Record of your loans, credit cards,
payments and outstanding debts
 Current and past payment information
 On-time and late payments
 Outstanding credit limits
and balances
 Information from public records
 Record of companies who have asked for a
copy of your report
What is “good credit”?
 Meeting your responsibilities.
 Not taking on more
than you can handle.
What is “bad credit”?
 What does bad credit mean to you?
Good credit
Reliable in paying bills
Bills are paid on time
Obligations
are met as
agreed
Vs.
Bad credit
Unreliable
in paying
bills
Bills are paid late
Debts are abandoned
Filed for bankruptcy
Companies willing to
extend credit
Companies reluctant to
extend credit, or charge
very high interest
How do you know if you have
bad credit?
Many people first realize they have credit
problems when they are turned down for
a loan, a job or a rental dwelling.
Why is credit denied?
 No credit history
 Too much outstanding credit
 Credit not handled responsibly
in the past
Credit Profile Activity
 Evaluate the scenario:
 Should the applicant be
approved for the credit or
loan?
Credit Profile:
Lupita
 Lupita, 47, got her first credit card
when she was 25.
 She always pays her bills on time.
 Lupita currently has 4 credit cards. . .
 In addition, Lupita has a mortgage, a car loan, and a loan
for her daughter’s college tuition.
 She has been an upper manager at a phone company for
22 years, where her annual salary is $80,000.
 Lupita now wants to finance a new $23,000 car for her
daughter.
Do you think Lupita will get the loan?
Credit Profile:
Henry

Henry, 33, has been married and divorced
twice. He has earned $35,000/yr as a
mechanic since age 20.

He built a good credit history and had four
credit cards; he always made his child support payments on time.

He received notice that his paycheck would be garnished for the child support
payments when his second wife moved away.

Henry was injured, went on disability leave, and couldn’t work for a year. He
continued with minimum payments on his credit cards and child support, but
he could not afford his car payments, so his car was repossessed.

Once he started working again, he decided to apply for a $6,000 loan to buy a
used car.
Do you think Henry’s car loan will be approved?
Who can get a copy of your
credit report?
 You!
 Only those who can prove
a legitimate need:
 Banks
 Credit card companies
 Landlords or real estate
companies
 Employers
How can you get a copy?
 www.annualcreditreport.com
 Experian, TransUnion, Equifax
 You’ll need to provide this information:
Full name
Birthdate
Social Security #
Addresses & phone#
for past 2-5 years
 Additional security
verification answers




Start
Here
It’s your right to see a copy of
your credit report!
 One free copy from each bureau each year.
 Also free if you’ve been turned down for
credit, insurance, or employment (based on
your report) within the past 60 days.
 Free if you become a victim of credit fraud.
 Otherwise, the cost is about $9/copy.
Sample credit reports
 Let’s take a look at sample reports
from the three largest credit reporting
bureaus:
 Equifax
 Experian
 TransUnion
 Credit reports can be
complex, so we’ll go
over them in detail.
Details on your credit report
 Your name, birth date, past
addresses, employers
 Current credit accounts
 Inquiries: Companies that
requested your credit file
 Public information
 Credit accounts you’ve had in the past seven
years (or the past ten years if you filed for
bankruptcy).
You’ve got your credit report. . .
now what?
 Check it carefully.
 Look for accounts that might not be
yours.
 Verify all credit limits/balances.
 Make sure accounts you’ve closed say
‘Closed at consumer’s request.’
 Begin to correct mistakes.
 Tell your side of the story.
Filing a dispute
 Fill out the form/letter enclosed with your
bureau report, and return it back to the
bureau.
 The bureau must respond in 30-45 days
 If after hearing from the bureau you
disagree with their response, you
may add up to a 100-word
statement.
Rebuilding Good Credit
 It’s never too late to start getting your
credit back on track!
 Pay your existing credit
accounts on time.
 Apply for a credit card or
small loan from your bank,
credit union, or a local
department store.
 Close unneeded accounts
What is a credit (FICO) score?
Requests for new
credit
10%
10%
35%
15%
Types of credit in
use
Length of credit
history
Current total debt
Payment History
30%
What about ID theft?
 Notify all three credit bureaus right
away & request a “victim’s
statement” be placed on file.
 Immediately notify account holders
to close or monitor accounts.
 File a police report.
 Contact Federal Trade Commission’s
ID Theft Hotline: 877-438-4338.
 Contact your local office of
Consumer Affairs.
Take-home activity:
 The handout titled “How does your
credit stack up?” is a credit selfevaluation worksheet.
Questions & answers
Now’s your chance to ask those
nagging questions!
Thank You!
 Please fill out the
evaluation form and
leave them on your way
out.
Adapted from Money Wi$e, a joint
financial education project of
Consumer Action and Capital One.
Please note that the material in this
presentation is copyright reserved
and can not be reproduced without
consent from Consumer Action.
 Megan O’Neil-Haight
Maryland Cooperative Extension, Wicomico and
Worcester Counties
P.O. Box 219, 100 River Street
Snow Hill, MD 21863
Phone: 410-632-1972/ Fax: 410-632-3023
[email protected]
 Crystal Terhune
Maryland Cooperative Extension, Caroline County
207 S. 3rd Street Denton, MD 21629
Phone: 410-479-4030/ Fax: 410-479-4042
[email protected]