efa-mått

Understanding Your Credit Report

Women In Agriculture ConferenceJanuary 19, 2007

Dover, DE

Megan O’Neil-HaightFamily, Youth & Communities Educator

Crystal TerhuneFamily and Consumer Science Educator

“Educating people to help themselves.”

By the end of the training you will understand:

How to obtain and interpret your credit report.

What information on a credit report is seen as negative.

That it is never too late to start to rebuild good credit.

Some ways to improve one’s credit.

How do companies know if you have bad credit?

Information about your credit is kept by credit reporting bureaus.

Equifax TransUnion Experian

This information on fileabout you is called acredit report.

What’s on your credit report? Record of your loans, credit cards,

payments and outstanding debts Current and past payment information

On-time and late payments Outstanding credit limits

and balances Information from public records Record of companies who have asked for a

copy of your report

What is “good credit”?

Meeting your responsibilities.

Not taking on morethan you can handle.

What is “bad credit”?

What does bad credit mean to you?

Good credit

Reliable in paying bills

Bills are paid on time

Obligations are met as agreed

Companies willing to extend credit

Bad credit

Unreliablein payingbills

Bills are paid late

Debts are abandoned

Filed for bankruptcy

Companies reluctant to extend credit, or charge very high interest

Vs.

How do you know if you have bad credit?

Many people first realize they have credit problems when they are turned down for a loan, a job or a rental dwelling.

Why is credit denied?

No credit history

Too much outstanding credit

Credit not handled responsiblyin the past

Credit Profile Activity

Evaluate the scenario:

Should the applicant be approved for the credit or loan?

Credit Profile:

Lupita Lupita, 47, got her first credit card

when she was 25.

She always pays her bills on time. Lupita currently has 4 credit cards. . .

In addition, Lupita has a mortgage, a car loan, and a loan for her daughter’s college tuition.

She has been an upper manager at a phone company for 22 years, where her annual salary is $80,000.

Lupita now wants to finance a new $23,000 car for her daughter.

Do you think Lupita will get the loan?

Credit Profile:

Henry

Henry, 33, has been married and divorcedtwice. He has earned $35,000/yr as a mechanic since age 20.

He built a good credit history and had fourcredit cards; he always made his child support payments on time.

He received notice that his paycheck would be garnished for the child support payments when his second wife moved away.

Henry was injured, went on disability leave, and couldn’t work for a year. He continued with minimum payments on his credit cards and child support, but he could not afford his car payments, so his car was repossessed.

Once he started working again, he decided to apply for a $6,000 loan to buy a used car.

Do you think Henry’s car loan will be approved?

Who can get a copy of your credit report?

You!

Only those who can provea legitimate need: Banks Credit card companies Landlords or real estate

companies Employers

How can you get a copy?

www.annualcreditreport.com Experian, TransUnion, Equifax

You’ll need to provide this information: Full name Birthdate Social Security # Addresses & phone#

for past 2-5 years Additional security

verification answers

Start Here

Start Here

It’s your right to see a copy of your credit report!

One free copy from each bureau each year.

Also free if you’ve been turned down for credit, insurance, or employment (based on your report) within the past 60 days.

Free if you become a victim of credit fraud.

Otherwise, the cost is about $9/copy.

Sample credit reports

Let’s take a look at sample reports from the three largest credit reporting bureaus: Equifax Experian TransUnion

Credit reports can becomplex, so we’ll goover them in detail.

Details on your credit report Your name, birth date, past

addresses, employers

Current credit accounts

Inquiries: Companies that requested your credit file

Public information

Credit accounts you’ve had in the past seven years (or the past ten years if you filed for bankruptcy).

You’ve got your credit report. . . now what?

Check it carefully. Look for accounts that might not be

yours. Verify all credit limits/balances. Make sure accounts you’ve closed say

‘Closed at consumer’s request.’ Begin to correct mistakes. Tell your side of the story.

Filing a dispute

Fill out the form/letter enclosed with your bureau report, and return it back to the bureau. The bureau must respond in 30-45 days

If after hearing from the bureau you disagree with their response, youmay add up to a 100-wordstatement.

Rebuilding Good Credit It’s never too late to start getting your

credit back on track!

Pay your existing creditaccounts on time.

Apply for a credit card orsmall loan from your bank,credit union, or a local department store.

Close unneeded accounts

What is a credit (FICO) score?

10%

10%

15%

30%

35%

Requests for newcredit

Types of credit inuse

Length of credithistory

Current total debt

Payment History

What about ID theft? Notify all three credit bureaus right

away & request a “victim’s statement” be placed on file.

Immediately notify account holders to close or monitor accounts.

File a police report.

Contact Federal Trade Commission’s ID Theft Hotline: 877-438-4338.

Contact your local office of Consumer Affairs.

Take-home activity:

The handout titled “How does your credit stack up?” is a credit self-evaluation worksheet.

Questions & answers

Now’s your chance to ask those nagging questions!

Please fill out the evaluation form and leave them on your way out.

Adapted from Money Wi$e, a joint financial education project of Consumer Action and Capital One. Please note that the material in this presentation is copyright reserved and can not be reproduced without consent from Consumer Action.

Thank You!

Megan O’Neil-HaightMaryland Cooperative Extension, Wicomico and

Worcester CountiesP.O. Box 219, 100 River Street Snow Hill, MD 21863 Phone: 410-632-1972/ Fax: 410-632-3023 [email protected]

Crystal TerhuneMaryland Cooperative Extension, Caroline County207 S. 3rd Street Denton, MD 21629Phone: 410-479-4030/ Fax: [email protected]