use credit union credit report seminar

Download Use credit union  credit report seminar

Post on 29-Jan-2015

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  • 1. Understanding Your Credit ReportPresented by: USE Credit Union

2. Today we will cover: How your credit report is used. How you can order your owncredit report. How to dispute incorrect information. How your credit score is calculated. How can you improve your score. 3. Credit Reporting Agencies Equifax based in Atlanta, GA The main bureau that USE Credit Union uses. Experian (formerly TRW) based inOrange County, CA Pulled for additional information or for comparison. TransUnion based in Chicago, IL 4. Who is looking at yourCredit Report? Lenders: Purpose is to evaluate yourcredit-worthiness and level of risk. Employers: Before extending an offerof employment. Insurance companies: To establish ratepremiums. Landlords: To evaluate your risk as atenant Used by many companies for marketingand demographic information. 5. Where does this information come from? Information reported monthly orquarterly by financial institutions. Most, but not all, financialcompanies report. Smaller institutions may reportquarterly or not all. Not all institutions report to eachof the three main bureaus. Reporting is a courtesy, not arequirement or obligation. 6. What is in my Credit Report?Personal InformationCredit Account Information/Trade InformationPublic Record InformationInquiriesCollection Information 7. Inquiries Soft hit vs. hard hit. One inquiry may decrease score bya few points. Inquiries have a greater impact if you havefew accounts or a short credit history. 45 day window for auto and mortgage shopping. Ignores all inquiries made 30 daysprior to scoring. 8. 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) 9. 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 10. 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. 11. FACT ACT Accuracy of Credit Information Effective July 1, 2010 Regulators have identified circumstances when institutionswho report information to the Credit Reporting Agenciesmust investigate disputesabout the accuracy of information on a creditreport when a member makes a request. Consumers must submit dispute in writing. ** Regulatory changes are taking place that willcontinue to impact credit and credit scores. 12. 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 13. 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 aparticular point in time A numerical value based on informationcontained in your credit report 14. 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 15. How your score can save/cost you money 16. Components of the FICO Score10%10%35%Payment HistoryAmounts OwedLength of HistoryNew Credit15% Types of Credit30% 17. The impact of missing a payment 18. Revolving Debt SignalsBalances vs. Credit Limit Under 15%: RELAX 15% to 20%: BE CAUTIOUS Over 30% DANGER 19. The Importance of Capacity 20. What HURTS your score? Missing a payment. Credit cards at capacity. Closing out credit cards. Shopping for credit excessively. Opening numerous trades in a shortperiod of time. Having more revolving loans in relationto installment loans. 21. What does NOT affect your score? Income, race, religion, age Debt ratio (total monthly paymentsdivided by monthly gross income) Length of residence Length of employment Child support or family obligations(Unless they become collection items) 22. Remember Your credit reports accuracyis your responsibility. Financial institutions only read the informationprovided on the report. Credit reporting agencies only report theinformation provided to them. It is the consumers responsibility to ensure thatinformation is accurate and current. Your credit score is one of many factors thatcreditors look at. 23. THANK YOU!Please fill out our evaluation