Understanding Your Credit Report Women In Agriculture Conference January 19, 2007 Dover, DE
Family, Youth & Communities Educator
Family 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.
This information on file
about you is called a
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
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 more
than you can handle.
What is “bad credit”?
What does bad credit mean to you ?
Reliable in paying bills
Bills are paid on time
Obligations are met as agreed
Companies willing to extend credit
Bills are paid late
Debts are abandoned
Filed for bankruptcy
Companies reluctant to extend credit, or charge very high interest
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 responsibly
in 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 divorced
twice. He has earned $35,000/yr as a
mechanic since age 20.
He built a good credit history and had four
credit 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?
Only those who can prove
a legitimate need:
Credit card companies
Landlords or real estate
How can you get a copy?
Experian, TransUnion, Equifax
You’ll need to provide this information:
Social Security #
Addresses & phone#
for past 2-5 years
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 $9/copy.
Sample credit reports
Let’s take a look at sample reports from the three largest credit reporting bureaus:
Credit reports can be
complex, so we’ll go
over them in detail.
Details on your credit report
Your name, birth date, past
Current credit accounts
Inquiries: Companies that
requested your credit file
Credit accounts you’ve had in the past seven years (or the past ten years if you filed for bankruptcy).
You’ve got your credit report. . . now what?
Check it carefully.
Look for accounts that might not be yours.
Verify all credit limits/balances.
Make sure accounts you’ve closed say ‘Closed at consumer’s request.’
Begin to correct mistakes.
Tell your side of the story.
Filing a dispute
Fill out the form/letter enclosed with your bureau report, and return it back to the bureau.
The bureau must respond in 30-45 days
If after hearing from the bureau you disagree with their response, you
may add up to a 100-word
Rebuilding Good Credit
It’s never too late to start getting your credit back on track!
Pay your existing credit
accounts on time.
Apply for a credit card or
small loan from your bank,
credit union, or a local
Close unneeded accounts
What is a credit (FICO) score?
What about ID theft?
Notify all three credit bureaus right away & request a “victim’s statement” be placed on file.
Immediately notify account holders to close or monitor accounts.
File a police report.
Contact Federal Trade Commission’s
ID Theft Hotline : 877-438-4338.
Contact your local office of Consumer Affairs.
The handout titled “How does your credit stack up?” is a credit self-evaluation worksheet.
Questions & answers
Now’s your chance to ask those nagging questions!
Please fill out the evaluation form and leave them on your way out.
Adapted from Money Wi$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.
Megan O’Neil-Haight Maryland Cooperative Extension, Wicomico and Worcester Counties
P.O. Box 219, 100 River Street Snow Hill, MD 21863 Phone: 410-632-1972/ Fax: 410-632-3023 firstname.lastname@example.org