What do the credit reporting agencies (CRA’s) do? <ul><li>Collect and maintain information about consumer’s credit history. This information is obtained from banks, credit card companies and various financial institutions.
The CRA’s sell this information to lenders and other creditors.
The CRA’s are not part of the government. </li></ul>
Are Credit Reports Accurate? <ul><li>Nearly 80% of all consumer credit reports have significant errors
25% of which are serious enough to potentially result in a credit denial </li></ul>
How do these errors occur? <ul><li>Loans, payment data or credit card information is applied to the wrong account
When filling out credit applications with different names, i.e., Bill Smith versus William Smith
Your Social Security number was entered incorrectly on the application
A clerical error was made when the lender transferred the data from the application </li></ul>
Who regulates the credit reporting agencies? <ul><li>The Fair Credit Reporting Act (FCRA) is designed to promote the accuracy of the information in consumer credit reports
The Federal Trade Commission is the government agency responsible for enforcing the FCRA </li></ul>
What are Credit Scores? <ul><li>A method that uses statistical models to evaluate your credit worthiness
Reflective of a borrower's past payment history, outstanding credit balances, and available credit capacity at a given point in time
Creditors use these scores, known as FICO scores, when deciding whether or not to offer credit to consumers
FICO scores range from 300 to 850 points </li></ul>
Other Names for Credit Scores <ul><li>BEACON—Equifax
Credit Score Interest Rate Monthly Payment 760-850 6.072% $604 660-699 6.578% $637 580-619 9.419% $835 Credit Score Interest Rate Monthly Payment 650 or higher - Indicates a very good credit profile. People falling into this range will usually be able to obtain credit quickly and at a good interest rate . 620 to 650 - The range which most credit scores fall. However, these consumers may find that potential creditors could require additional documentation for larger loans and the loan process may take longer as a result . 620 or less — May mean higher interest rates for borrowers. This does not mean that credit will be denied. The process will probably take longer and will be on less than ideal terms. The following table is based on a $100,000 30-year fixed mortgage from myfico.com. How Credit Scores are Used
What makes up your credit score? <ul><li>5 key components to your credit score </li></ul><ul><ul><li>Your buying and bill paying habits (35%)
Amount of credit you owe versus your available credit (30%)
5 ways to establish credit <ul><li>Apply for a gasoline or department store charge. These are usually easier to obtain than other credit cards.
Apply for a secured credit card. You will be required to deposit a specified amount, usually $300 to $500 dollars into an account in their bank, and you will be issued a major credit card in the amount of the deposit. </li></ul>
5 ways to establish credit (continued) <ul><li>Take out a small loan from your credit union or bank. Deposit the money into your savings account and pay the loan back monthly.
If you currently have credit, ask your creditors to increase your credit limit. This will improve your credit utilization ratio thereby improving your credit score.
If you do not have a checking and savings account, apply for both. Having these accounts establishes you as part of the financial community and allows you to manage your money. </li></ul>
Our service We help eliminate any inaccurate, erroneous and obsolete information reporting in your credit file
Service Features <ul><li>Five challenge cycles, initial credit reports and credit scores
Receive regular updates on the progress of your file, reflecting any deletions, additions or alterations
Our active customer support is available to service your needs and answer your questions M-F, 9AM-5PM, EST.
Access to your progress report online 24/7, 365 days per year </li></ul>
Step 1: Enrollment <ul><li>The online or paper enrollment agreement, payment, Social Security and address verification are received by the processing center. </li></ul>
Acceptable Address Verification: <ul><li>Copy of drivers license or state ID with current address
Copy of a utility or other bill in customer’s name with current address
The address must match the one on the customer enrollment form </li></ul>
Acceptable forms of Social Security verification: <ul><li>Copy of Social Security card
Copy of a health insurance card showing the SSN