1. Understanding
Your Credit
Report
Presented by:
USE Credit Union

2. Today we will cover:
• How your credit report is used.
• How you can order your own
credit report.
• How to dispute incorrect information.
• How your credit score is calculated.
• How can you improve your score.

4. Credit Reporting Agencies
• Equifax – based in Atlanta, GA
• The main bureau that USE Credit
Union uses.
• Experian – (formerly TRW) – based in
Orange County, CA
• Pulled for additional information
or for comparison.
• TransUnion – based in Chicago, IL

5. Who is looking at your
Credit Report?
• Lenders: Purpose is to evaluate your
credit-worthiness and level of risk.
• Employers: Before extending an offer
of employment.
• Insurance companies: To establish rate
premiums.
• Landlords: To evaluate your risk as a
tenant
• Used by many companies for marketing
and demographic information.

6. Where does this information come from?
• Information reported monthly or
quarterly by financial institutions.
• Most, but not all, financial
companies report.
• Smaller institutions may report
quarterly or not all.
• Not all institutions report to each
of the three main bureaus.
• Reporting is a courtesy, not a
requirement or obligation.

7. What is in my Credit Report?
Personal Information
Credit Account Information/
Trade Information
Public Record Information
Inquiries
Collection Information

8. Inquiries
• “Soft hit” vs. “hard hit.”
• One inquiry may decrease score by
a few points.
• Inquiries have a greater impact if you have
few accounts or a short credit history.
• 45 day window for auto and mortgage shopping.
• Ignores all inquiries made 30 days
prior to scoring.

9. How to obtain a copy of your
Credit Report
• Equifax: www.equifax.com
• Experian: www.experian.com
• TransUnion: www.transunion.com
• One free credit report every 12 months
• www.annualcreditreport.com
– Does not provide credit score
(available for purchase)

10. Reasons to check your
Credit Report
• 1 in 6 reports contain errors.
• Inaccurate information can damage your ability to:
- Buy a house
- Rent an apartment
- Obtain credit or insurance
- Open a checking account
- Get a job
- Signals of ID Theft

11. When information is not accurate
• File a dispute with the credit
reporting agency.
• Credit reporting agencies are governed
by the Fair Credit Reporting Act.
• Disputes filed directly with the creditor
are resolved at their discretion.
• Disputed information not verified within
30 days will be blocked from your report.
• Beware of credit clinics: There is nothing
they can do that you can not do yourself.

12. FACT ACT
Accuracy of Credit Information
• Effective July 1, 2010
• Regulators have identified circumstances when institutions
who report information to the Credit Reporting Agencies
must investigate disputes
about the accuracy of information on a credit
report when a member makes a request.
• Consumers must submit dispute in writing.
• ** Regulatory changes are taking place that will
continue to impact credit and credit scores.

13. What does this mean?
• Reporting institutions must conduct an investigation
on a consumer dispute
when it relates to:
• Whether there is individual or joint liability on an account
• Whether the member is an authorized user of the
credit account
• The type of account, principal balance, scheduled
payment, or amount of credit limit being reported
• Current payment status, high balance, date a payment
was made, amount of a payment made, or the date the
account was opened or closed

14. What is a Credit Score?
• A 3 digit number between 300 - 850
• Often referred to as the “FICO” score
• A snapshot of your credit risk at a
particular point in time
• A numerical value based on information
contained in your credit report

15. Benefits of Credit Scoring
• The Credit Score gives lenders a fast,
objective measurement of your credit risk:
• Credit decisions are fairer
• Older credit problems count for less

16. How your score can save/cost you money

17. Components of the FICO Score
10%
10%
35%
Payment History
Amounts Owed
Length of History
New Credit
15% Types of Credit
30%

18. The impact of missing a payment

19. Revolving Debt Signals
Balances vs. Credit Limit
• Under 15%:
RELAX
• 15% to 20%:
BE CAUTIOUS
• Over 30%
DANGER

20. The Importance of Capacity

21. What HURTS your score?
• Missing a payment.
• Credit cards at capacity.
• Closing out credit cards.
• Shopping for credit excessively.
• Opening numerous trades in a short
period of time.
• Having more revolving loans in relation
to installment loans.

22. What does NOT affect your score?
• Income, race, religion, age
• Debt ratio (total monthly payments
divided by monthly gross income)
• Length of residence
• Length of employment
• Child support or family obligations
(Unless they become collection items)

23. Remember
› Your credit report’s accuracy
is your responsibility.
› Financial institutions only read the information
provided on the report.
› Credit reporting agencies only report the
information provided to them.
› It is the consumer’s responsibility to ensure that
information is accurate and current.
› Your credit score is one of many factors that
creditors look at.

26. THANK YOU!
Please fill out our evaluation