The World of Credit Reports

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The World of Credit Reports

• Presented By
• The Credit-Wise Cats

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The World Of Credit Reports

• Today well talk about
• What are credit reports and credit scores
• Information they contain
• Tips on guarding your credit
• Your rights with respect to Credit Reports
• How to correct mistakes

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What are credit reports

• Credit Reports are
• A financial report card
• They are prepared by three independent Credit
  Rating Agencies (CRAs)
• Equifax,
• Experian, and
• Transunion
• In general, they contain information about your
  past consuming, borrowing and payment habits

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What are credit reports

• Credit Reports are given, with your express
  written consent, to
• Banks and other creditors
• Insurance companies
• Landlords and other lessors
• Utility companies
• Potential employers
• Graduate school admission offices

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What are credit reports

• Contact and other limited information on credit
  reports is given without your explicit consent
  to
• Financial companies wanting to make you a firm
  offer of credit
• Insurance companies wanting to offer you a policy
• Potential employers who want to hire you
• Other companies whose products may interest you

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Information they contain

• Personal information
• A credit summary
• Public Records
• Credit Inquiries
• Detailed Account History
• Clarifying notes
• Your Credit Score (sold separately)

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Information they DONT contain

• Balance on checking or savings accounts
• Bankruptcies that are more than 10 years old
• Charged-off or debts placed for collection that
  are more than seven years old
• Gender, ethnicity, religion, political
  affiliation,
• Medical history
• Criminal records

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Information they contain

• Personal information
• Legal name
• Aliases
• Date of Birth
• Current and past addresses
• Current and past employers
• Phone and drivers license number
• Social Security Number (typically masked)
• Miscellaneous

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Sample taken from Privacyguard.com
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Guarding You Credit

• Check carefully the accuracy of all information.
• Fix any mistakes immediately.
• Something as innocent as an incorrect address
  could be a potential sign of identity theft, as
  criminals often redirect your mail and billing
  addresses to false places.

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Information they contain

• Credit Summary
• Number of accounts by type
• Real Estate, Revolving, Installment, Sent to
  Collection, Public Records
• Their outstanding balance
• Status (Current, Delinquent, Other)
• Number of hard inquiries in the past six months

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Sample taken from Privacyguard.com
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Guarding You Credit

• Watch the number of credit cards in your wallet
• Having 2 or 3 is a good idea to build credit
• Having too many credit cards is not.
• Remember that gas cards or retail store cards are
  also considered credit cards, just like a Visa or
  MC.
• Having a credit card and not using it doesnt
  help building a good credit score.
• If you are thinking about canceling some credit
  cards, keep the ones with the most seniority.

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Information they contain

• Public Records
• Federal district bankruptcy records
• State and County court records
• Tax liens
• Monetary judgements
• Overdue child support (in some states)

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Sample taken from Privacyguard.com
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Guarding You Credit

• Nothing on your public record is good news
• Avoid bankruptcy proceedings at all cost.
• Bankruptcy stays in your record for 10 years
• Other negative factors can stay on your record
  for up to seven years

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Information they contain

• Credit Inquiries
• Those obtained with your written consent (Hard)
• Name and contact information of the company who
  submitted the inquiry
• Date of the inquiry
• Date when the inquiry will be deleted from you
  report (They remain in your record for 2 years)
• These inquiries are visible to everyone accessing
  you credit report
• Without your explicit consent (Soft)
• Information on who requested it
• These are only visible to you

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Sample taken from Privacyguard.com
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Guarding You Credit

• Too many hard credit inquiries can harm your
  credit (they are kept for 2 years)
• Do not approve credit inquiries lightly
• Make sure no one is accessing your credit without
  your permission
• Soft inquiries do not affect your credit, but
  review them carefully
• When you access your credit history, that doesnt
  affect your credit adversely

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Information they contain

• Detailed Account History
• Creditor Name
• Account Number (Masked)
• Date opened
• Credit Limit
• Maximum and current balance
• Payment Status
• Frequency and length of any late payments

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Sample taken from Privacyguard.com
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Guarding You Credit

• Watch your payment habits
• Never be late on a payment!
• If late, dont be too late 90 days late is worse
  that 60 days 60 days is worse than 30 days.
• Always try to make larger payments than the
  minimum, but never miss making at least the
  minimum payment.
• If possible, try paying the full balance of your
  credit card each month It saves you money and
  frees your credit balances.
• Dont move balances from card to card, pay them.

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Guarding You Credit

• Watch your credit limit
• How much is ideal? It depends on your annual
  income and credit history.
• The limit on any open line of credit is
  considered by loan executives as good as money in
  you pocket, whether you use it or not.
• Try to never exceed more than 50 of your limit.
• Keep the line of credit as free as possible for
  emergencies.

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Guarding You Credit

• Watch out for any clerical mistakes your creditor
  may make when processing your payments
• Watch out for identity theft
• Investigate any unfamiliar accounts
• Look at history of charges
• When information in your report has an adverse
  effect on your record, it is explicitly outlined

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Information they contain

• Personal Statements
• Should you chose to add a clarifying note to your
  credit report, it would be visible to everyone
  accessing it.
• This note can say anything you want, but has a
  word limit.
• It is often used to smooth any adverse
  information on your report.
• Be careful with overkill.

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Information they contain

• Your Credit Score
• A number between 300 and 850 that assesses you
  credit risk
• It is calculated using FICOs method, using
  information on your credit report
• It is used to determine how your credit risk
  compares to that of others
• The higher the number the better
• Its not a standard element of your credit report
• Often accompanied by an explanation of what the
  score means and how you can improve it

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Sample taken from Privacyguard.com
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The Fair Credit Reporting Act

• Your rights under the FCRA
• You must be notified when information has been
  used against you
• If that is the case, you have the right to a free
  copy of your credit report within 60 days
• You can dispute any inaccuracies and receive an
  expect action within 30 days
• Incorrect information must be fixed or deleted
• Creditors must disclose any disputed with them to
  the CRA

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The Fair Credit Reporting Act

• Your rights under the FCRA (Continued)
• Negative outdated information should not be
  reported
• Access to your file is limited
• You may ask to be removed from CRA lists to avoid
  unsolicited offers for credit and insurance
• You may seek compensation for damages from
  violators

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How to correct mistakes

• Write a letter to the CRA
• provide copies of all supporting documents,
  including the credit report itself.
• Await for a acknowledgement letter
• Follow up if problems are not corrected
• Telephone follow up is highly recommended for
  this
• Sometimes, its necessary to write to some or all
  of the creditors directly
• Be Patient, but dont procrastinate

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CRAs Contact Information
Experian Information Services, LLC. P.O. Box
2002Allen, Texas 75013-3742 www.experian.com
Equifax Information Services, LLC.PO Box
740243Atlanta, GA 30374 www.equifax.com
Trans Union Information Services, LLC. P.O. Box
1000 Chester, PA 19022 www.transunion.com
Questions?