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Budgeting_ Wise Use of Credit_Understanding Your Credit Report and Score
- 1. Budgeting 101 www.credit.org Promoting Financial Literacy Presented by: Lori Lamb - Credit Education Supervisor
- 20. The WISE USE of CREDIT www.credit.org Promoting Financial Literacy
- 26. Comparing Costs Institution Credit Card Type Purchase APR Fixed or Variable Annual Fee Purchase Late/ Overlimit Fee Purchase Grace Days Cash Advance APR Fixed or Variable Cash Advance Fee Rewards Program Rewards Program Fee Example: Bankcard Visa 18.24% Variable $0 $39 $35 20 days from billing 28.24% Variable 3%/$10 min Yes $20 Example: Bankcard Mastercard 9.00% Fixed $0 $39 $35 20 days from billing 28.24% Variable 3% No $0 Example: Bankcard Mastercard 0% for 1Year 12.99% Fixed $0 $39 $35 20 days from billing 22.99% Variable 3%/$10 min Yes $0
- 31. Understanding Your Credit Report & Score www.credit.org Promoting Financial Literacy
- 36. What Affects Your FICO Score?
Notas do Editor
- DNA page 4 It is well established that credit scores are now a cornerstone of the U.S. credit system. Credit scores determine or at least greatly influence access to housing, unsecured credit lines, insurance, utility and cell phone services, and employment. Since they are based on credit reports, it is imperative that the underlying data be correct for (1) the score to have any meaning and (2) for consumers to accept the validity of credit scoring. Incidence of errors page 4 The Public Interest Research Group (PIRG) published a study, " Mistakes Do Happen: A Look at Errors in Consumer Credit Reports" ( www.pirg.org ), in which it was found that "one in four credit reports contains errors serious enough to cause consumers to be denied credit, a loan, an apartment or home loan or even a job." It’s vital to see your report and score page 11 In everyone’s life, there are always instances where credit is needed. From your first credit card to the last mortgage payment and every account in between, all these make up your credit history. The companies and people that give credit, such as banks, finance companies and other creditors, report information about you. These creditors send information regularly about your accounts to credit reporting bureaus that collect and archive this information. Your credit report can then be accessed by other creditors or distributed to others that are authorized to receive such information. The importance of good credit page 11 If you are thinking of buying a house, a car or simply applying for a new credit card, your credit report represents the first step in the lender’s decision-making process. The fact of the matter is that you need to have a good credit history in order to get credit. What is good credit? Simply put, a person with “good credit” has a well-established history of having paid their accounts on time.
- What Information Is Contained In My Credit Report A Typical Credit Report Includes Four Types of Information Identifying Information Credit Information Public Record Information Inquiries Where can I get a copy: annualcreditreport.com MyFico.com
- Review credit reports regularly . An accurate report will be an honest representation of a consumer’s history. Take control of yours. Pay bills on time . More recent negative remarks on a credit report are worse than problems that occurred years ago. For example, an account that has been delinquent in the past six months will do more damage to a credit score than a similar delinquency five years earlier. Reduce your overall debt . Keep your balances below 50% of your line of credit – pay off unpaid collections, judgments and tax liens. Limit revolving card usage . The goal should be not to max out your revolving or “open” lines of credit. Revolving means you can use it, pay it off, and use it again. Some experts advise no more than 50%, some say 35% as the maximum utilization level. Length of credit history Be aware that closing unused accounts may reduce your score. In choosing to close accounts, older accounts with a good history are the ones to keep because the age of an account and your length of time in the credit world also factors in the score. Easy access to credit may create the potential to get into trouble by going on a spending spree and racking up new debt, and lots of account numbers create more targets for identity theft. Limit the number of inquiries . Apply for credit only when necessary and get your credit report in advance. When shopping for a new car or a mortgage, make all applications within a 14-day period – inquiries will only count as one. Too many inquiries in a short period may be seen as an indication of financial problems or loading up on new credit. The scoring model is supposed to consolidate inquiries of the same type within a specific amount of time, which is 30 days.
- All incorrect, incomplete, or outdated information can be disputed Be succinct in stating what your desired result is and provide documentation. If the information is outdated, it should be promptly removed. For information that the consumer believes is inaccurate or incomplete, the credit bureau has 30 days to verify the information with the creditor to ensure that it is correct. If the creditor cannot document the truthfulness of the disputed information, it must be deleted from the credit report. It is often necessary to dispute the same item with all credit reporting agencies that have recorded the negative notation. Credit bureaus do not communicate or share information and making a correction on one report does not mean the correction will appear on the report of a different bureau. Mail everything certified mail, return receipt requested. Disputes can be filed easily over the Internet; however, the conventional wisdom is that mailed disputes are the most effective and that certified mail should be used. You may use the sample dispute letters found at the back of the Consumer Guide to Good Credit.
- All incorrect, incomplete, or outdated information can be disputed Be succinct in stating what your desired result is and provide documentation. If the information is outdated, it should be promptly removed. For information that the consumer believes is inaccurate or incomplete, the credit bureau has 30 days to verify the information with the creditor to ensure that it is correct. If the creditor cannot document the truthfulness of the disputed information, it must be deleted from the credit report. It is often necessary to dispute the same item with all credit reporting agencies that have recorded the negative notation. Credit bureaus do not communicate or share information and making a correction on one report does not mean the correction will appear on the report of a different bureau. Mail everything certified mail, return receipt requested. Disputes can be filed easily over the Internet; however, the conventional wisdom is that mailed disputes are the most effective and that certified mail should be used. You may use the sample dispute letters found at the back of the Consumer Guide to Good Credit.
- All incorrect, incomplete, or outdated information can be disputed Be succinct in stating what your desired result is and provide documentation. If the information is outdated, it should be promptly removed. For information that the consumer believes is inaccurate or incomplete, the credit bureau has 30 days to verify the information with the creditor to ensure that it is correct. If the creditor cannot document the truthfulness of the disputed information, it must be deleted from the credit report. It is often necessary to dispute the same item with all credit reporting agencies that have recorded the negative notation. Credit bureaus do not communicate or share information and making a correction on one report does not mean the correction will appear on the report of a different bureau. Mail everything certified mail, return receipt requested. Disputes can be filed easily over the Internet; however, the conventional wisdom is that mailed disputes are the most effective and that certified mail should be used. You may use the sample dispute letters found at the back of the Consumer Guide to Good Credit.