Credit, Debt

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Credit, Debt Credit Reports
Presented by
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The Need For Credit

• Advantages
• Access to a Larger Marketplace
• Safer than Carrying Cash
• Used as a Character Reference
• Disadvantages
• Interest Paid on Purchases
• Using for Emergencies vs. Establishing Savings
• Temptation to Overspend
• Used as a Character Reference

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Kinds of Credit

• Secured Credit
• - Involves something to give in return for the
  credit provided (a house, a car, etc.)
• Unsecured Credit
• -The debt can only be paid with money
• Open Ended Credit
• - Has no limit on its usage (Revolving)
• Closed Ended Credit
• - Once the debt is paid, no more payments are
  required and the debt is over

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Shopping For Credit

• Annual Percentage Rate (APR)
• Fixed vs. Variable. Demand the lowest interest
• Calculating Finance Charges
• Average Daily Balance vs. Two-Cycle
• Fees, Penalties and Grace Periods
• Late Fees, Over the Limit Fees, Inactivity Fees
• Find out how long the grace period is
• Affinity Programs
• Points, Frequent Flyer Miles, VIP Tickets,
  Rewards, etc.
• Only good when you know how to use them

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CREDIT USE PROFILE
WHERE DO YOU FALL?
Liberal
Moderate
Reserved
Ultra Liberal
Conservative
Ultra Conservative
Ideal Credit User
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How To Maintain A Positive
Relationship With Your Creditors

• Pay Your Bills When They Arrive
• Pay More Than Your Minimum Payment
• Restrict Credit Card Use
• Dont Miss Payments

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Has this ever happened to you?
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How Much Is Enough?

• Take control of your expenses
• 10 for Savings
• 20 for Credit
• 70 for Living Expenses
  (Net Income)

Savings10
Savings 10
Credit 20
Debt 20
Living Expenses 70 (Net)
Living Expenses 70
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It Can Happen to Anyone!
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If Its Already Too Much

• Debt Consolidation - Legal
  and Financial Advice
  Necessary
• Debt Management - With
• Help of a Credit Counselor. Variable
  Credit
  Impact.
• Debt Settlement - Negotiate
  with Creditors to
  Reduce and Settle a
  Debt (Uncommon, But Can
  Happen)
• Bankruptcy - Last Resource to Eliminate Debt,
  Stop Collections and Protect Assets. Severe
  Credit Impact. Years to Recover. Requires Careful
  Education before Making the Decision. Legal
  and Credit Advice a Must.

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You Can Reduce Your Debt

• Complete a Debt Profile
• Review your income and expenses
• Prioritize Accounts
• Most important to less important
• Reduce Credit Usage
• Use more cash and debit, less credit
• Negotiate Lower Interest Rates
• The worst thing that can happen is they say no
• Use a Self-Administered Debt Reduction Plan
• Consider Using Debt Management Service
• Review track record, credentials and FREE
  counseling

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7 Collection Agency Pointers

• Dont Ignore the Phone Calls
• Dont Make Promises You Cant Keep
• Dont Give Out Your Bank Information
• Dont Send Post-Dated Checks
• Dont Accept Abusive Collection Tactics
• Negotiate Settlements/Notations
• Complain to Consumer Affairs and FTC

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Identity Theft Prevention

• Use Credit Report Alerts
• Monitor reports at least twice a year
• Protect Your Information
• Use Complex Passwords/PINS
• Change them often. NO birthdays as PINs
• Never Give Information Over the Phone
• Look out for suspicious calls, mail and prices
• Report Lost/Stolen Credit Cards
• Limit Information Printed on Checks

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Shop Before You Drop
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Credit Reports

• Ordering Your Credit Report
• Order Reports Twice a Year
• The only Official Source For a
• Free Credit Report Iswww.annualcreditreport.c
  om
• or 1-877-322-8228
• Get your 3 Credit Reports
• Equifax, Experian and TransUnion
• Reviewing Your Credit Report
• Correct / Dispute Inaccurate Information
• Cleaning Up Your Credit vs. Do-it-Yourself

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Making Changes

• Check Information on Credit Reports
• Contact Your Creditors
• Dispute Inaccurate Information
• Contact Credit Reporting Agencies
• Dispute Inaccurate Information
• Negotiate Report Notations
• Look for Help
• Free Credit Counseling
• ID Theft Solutions from Reliable Sources

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Credit Scores

• What is a Credit Score?
• Who is FICO?
• How are Credit Scores Used?
• Landlords, Employers, Lenders, Service providers
• What Factors Make Up a FICO Credit Score?
• 35 Payment History
• 30 Amount Owed
• 15 Length of Credit History
• 10 Types of Credit
• 10 New Credit

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7 Steps to a Better Credit

• Pay Your Bills On Time
• Reduce Your Debt
• Pay Small Balances and Big APRs First
• Choose New Credit Wisely
• Limit Inquiries and New Accounts
• Increase Your Assets/Savings
• Monitor Your Credit Reports
• At least twice a year. Look for errors
• Review Unused Accounts
• Learn Pros and Cons of Closing Credit Lines
  Cards
• Talk to a Credit Counselor
• Credit Counseling is FREE. Avoid Scams!

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Some Resources for Consumer Information

• www.ClearPointCCS.org (Free Credit / Housing
  Counseling)
• www.annualcreditreport.com (Credit Reports, Info
  Alerts)
• www.myfico.com (Credit Score NOT FREE)
• www.la.bbb.org (Business Rating, Consumer
  Defense)
• www.hud.gov (Housing and Tenant Info)
• www.dca.lacounty.gov (Dept of Consumer Affairs,
  ID Theft, Fraud)
• www.ftc.gov (Federal Trade Commission, Frauds,
  Education)
• www.fdic.gov (Consumer Information, service
  links, Education)
• www.consumer-action.org (Consumer Defense Info)
• www.stopthesqueeze.org (Credit-Oriented
  Information)
• www.idtheft.gov (Consumer Information, Service
  links)
• www.healthycity.org (Social Services Online
  Finder)
• www.infoline-la.org (211, Social Services
  24-hour phone info)
• Report scams and misleading advertising!

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Thank you for choosing
To meet your financial education requirements
http//www.clearpointccs.org 1.800.750.2227