CREDIT REPORTS and SCORING

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CREDIT REPORTS and SCORING
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Your Credit ReportA record of your payment
history as reported by your credit grantorsA
profile of your borrowing, charging and repayment
activities
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• Collection of DataCredit reporting agencies
  collect data from your credit providers to
  assemble your personal computerized Credit
  Snapshot.

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• HOW LONG?
• In most cases,Negative information may remain on
  your credit report for up to 7 Years.
• Civil judgments -7 years from the
• date filed

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• HOW LONG? Tax Liens- 7 years from the date
  paid Chapter 13 Bankruptcies dismissed or
  discharged - 7 yearsChapter 7 Bankruptcies - 10
  yrs

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• YOUR CREDIT REPORTContains 4 types of
  information- Identifying Information- Public
  Record Information- Credit Information -
  Inquiries

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• IDENTIFYING INFORMATIONYour Name (Jr., Sr.,
  III)Nicknames (AKA)Current and Previous
  addressesSocial Security NumberYear of
  BirthCurrent and Previous EmployersYour
  Spouses Name

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• CREDIT INFORMATIONAccounts you have -banks,
  retailers, credit card issuers, other
  lendersTypes of accounts/loans-mortgage,
  student loan revolving accountsDate you opened
  the accounts

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• CREDIT INFORMATIONYour Credit LimitsLoan
  AmountsCo-signersPayment Pattern

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• INQUIRIES?
• How often do you apply for credit?
• Do you give creditors permission to look at your
  credit file?
• INQUIRIES WILL REMAIN ON YOUR FILE FOR 2 YEARS.

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• FREE CREDIT REPORTS
• A copy of your consumer credit report from any
  credit bureau can be obtained free of charge, IF
  you request it
• Within 60 days of being denied credit, insurance
  or employment , or had adverse action taken on an
  existing account due to information contained in
  your credit report.

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• ADVERSE ACTIONYou were charged higher rates
  and/or fees or deposits based on information in
  a credit report issued by a credit reporting
  agency.

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• FREE CREDIT REPORTSYou are entitled to a free
  report if you certify in writing
• 2. You are unemployed and plan to look for a job
  within the next 60 days
• You receive Public Assistance
• Your report is inaccurate because of FRAUD

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• ARE YOU A VICTIM OF FRAUD?
• You can add a fraud alert to your consumer credit
  reports with 1 call
• Fraud Victim Assistance Department 800-680-7289

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• FACT ActFair and Accurate Credit Transaction Act
  of 2003
• 1 Free Credit Report per agency/year
• www.annualcreditreport.comor
• 1-877-322-8228

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• Credit Reporting Agencies Servicing the Texas
  Gulf Coast AreaTo receive your Consumer Credit
  Reports
• annualcreditreport.com, or
• contact the agencies by phone or internet for
  instructions.

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• CSC Credit Services, Inc. Fee 9.50
  Individual
• CSC Credit ServicesP.O. Box 981221El Paso, TX
  79998-1221 1-800-392-7816 www.csccredit.com

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• Trans Union, LLC. Fee 9.50
  IndividualConsumer RelationsP.O. Box
  1000Chester, PA 19022 1-800-888-4213www.trans
  union.com

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• Experian
• Fee 9.74 IndividualExperianP.O. Box
  2104Allen, TX 75013-2104 1-866-200-6020 www.e
  xperian.com

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• OPT-OUTTo have your name and address removed
  from all mailing lists offered by the main
  consumer credit-reporting agencies Call
  888-5 OPTOUT (888-567-8688)

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Your Credit Score BEACON - Equifax
EMPIRICA - Trans Union FICO - EXPERIAN/
FAIR, ISAAC Risk Model
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Credit scores are based solely on information in
consumer credit reports maintained at one of the
credit reporting agencies. They evaluate the
same information in your credit report that a
lender looks at.
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What is a FICO score?A FICO score is a
number that tells a lender how likely you are to
repay a loan or make credit payments on time.
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What a FICO Score Considers There are five
main categories of information that FICO
scores evaluate.
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1. PAYMENT HISTORY What is your track record?
2. AMOUNTS OWED  How much is too much? 3.
LENGTH OF CREDIT HISTORYHow established is
yours? 4. NEW CREDIT Are you taking on more
debt?5. TYPES OF CREDIT USEIs it a "healthy"
mix?
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1 Payment History What is your track record?
APPROXIMATELY 35 OF YOUR SCORE IS BASED ON THIS
CATEGORY. The first thing any lender wants to
know is whether you have paid past credit
accounts on time. This is also one of the most
important factors in a credit score.
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Your score takes into account Payment
information on many types of accounts- Credit
cards Retail accounts Installment loans
Finance company accounts Mortgage loans.
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Your score takes into account Public
recordsand collection items- Reports of events
such as bankruptcies, foreclosures, suits, wage
attachments, liens and judgments.
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Your score takes into account Details on late
or missed payments ("delinquencies") -How late
they were -How much was owed, -How recently
they occurred and -How many there are.
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Your score takes into account-How many open
accounts have payments that are are
current?-How many accounts show no late
payments?
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2. Amounts Owed  How much is too
much?APPROXIMATELY 30 OF YOUR SCORE IS BASED
ON THIS CATEGORY.Part of the science of scoring
is determining how much is too much for a given
credit profile.
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Your score takes into account-The amount owed
on all accounts -Whether you are showing a
balance on certain types of accounts-How many
accounts have balances
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Your score takes into accountThe amount of the
total credit line that is being used on credit
cards and other "revolving credit" accounts The
amount of your installment loan accounts that are
still owed, compared with the original loan
amounts
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3 Length of Credit History How established is
yours?APPROXIMATELY 15 OF YOUR SCORE IS BASED
ON THIS CATEGORY.  
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In general, a longer credit history will increase
your score. However, even people who have not
been using credit long may get high scores,
depending on how the rest of the credit report
looks.
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4 New Credit Are you taking on more
debt?APPROXIMATELY 10 OF YOUR SCORE IS BASED
ON THIS CATEGORY.
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Your score takes into account - How many new
accounts you have- How long it has been since
you opened a new account- How many recent
requests for credit you have made, as indicated
by inquiries to the credit reporting agencies
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Your score takes into accountLength of time
since credit report inquiries were made by
creditors and lenders Whether you have a good
recent credit history, following past payment
problems
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5 Types of Credit in Use  Is it a "healthy"
mix?APPROXIMATELY 10 OF YOUR SCORE IS BASED ON
THIS CATEGORY.
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Your score takes into account What type of
credit accounts you have in addition to how many
you have of each.
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It's important to note that raising your score is
a bit like losing weight It takes time and
there is no quick fix.In fact, quick-fix
efforts can backfire.The best advice is to
manage credit responsibly over time.
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TO INCREASE YOUR CREDIT SCORE- Keep balances
low on credit cards and other revolving credit-
Pay off debt rather than moving it around -
Don't open a number of new credit cards that you
don't need, just to increase your available
credit.
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TO INCREASE YOUR CREDIT SCORE If you have been
managing credit for a short time, don't open a
lot of new accounts too rapidly. Do your rate
shopping for a given loan within a focused period
of time.
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Re-establish your credit history if you have had
problems.Pay your bills on timeIf you have
missed payments, get current and stay
current.Communicate with your creditorsIf you
are having trouble making ends meet, contact your
creditors.
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Please note that A score takes into
consideration all these categories of
information, not just one or two. No one piece
of information or factor alone will determine
your score.
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The importance of any factor depends on the
overall information in your credit report.In
addition, as the information in your credit
report changes, so does the importance of any
factor in determining your score.
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It's impossible to say exactly how important any
single factor is in determining your score.
Even the levels of importance shown here are for
the general population, and will be different for
different credit profiles.
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What's important is the mix of information
Remember, this varies from person to person and
for any one person over time.
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Your score considers both positive and negative
information in your credit report. Late
payments will lower your score, but establishing
or re-establishing a good track record of making
payments on time will raise your score.
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If you have been denied credit, or did not get
the rate or terms you requested, ask the creditor
if a credit scoring system was used. If you get
credit, ask the creditor if you are getting the
best rate and terms available, and if not, why?
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ALTERNATIVE CREDIT Utility Payments Rental
History Insurance Child CareAny timely payment
that is not reported to the Credit Reporting
Agencies
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AVOID SURPRISES KNOW and UNDERSTAND YOUR
CREDIT REPORT!Before applying for your loan,
dispute the inaccurate information in your credit
reports- from each credit reporting agency.
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• REVIEW YOUR CREDIT REPORTS EVERY YEAR
• YOU ARE ENTITILED TO
• 1 FREE REPORT per YEAR
• FROM EACH CONSUMER REPORTING AGENCY

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FREE CREDIT COUNSELING AND HOMEBUYER
EDUCATIONFUNDAMENTALS OF GOOD CREDITCREDIT
COALITION 713-224-8100www.creditcoalition.org
HUD Approved Housing Counseling Agency