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What We Need to Know About….
Credit Management & Credit Repair
CREDIT CONSULTANTS
 THE AMERICAN
DREAM
What is Credit?
 When someone lends you money, and you
pay them back with interest, they have
“extended you credit.”
 Cr...
Why is Credit Important for Me?
Credit helps a person:
 Buy a home
 Rent an apartment
 Borrow more money
 Finance & in...
Debit vs. Credit?
Debit Cards
 Use your own money to buy
things
 Can spend only what you
have
 No bills / purchases sho...
Cost of Credit
 Principal is the amount of money you are
borrowing.
 Interest is the amount the lender charges
you to le...
Understanding
Terms and Conditions
Penalties and Transaction Fees
for late payments and/or exceeding your credit
limit
Exa...
Note on Secured Loans
Home Equity Loans – A loan secured by the “equity”, or portion
that you own, of your home.
Example: ...
What is a Credit History?
 Your history of payments on:
o Credit cards
o Loans
o Mortgages
o Other (medical bills, utilit...
CHECK SYTEMS
 Is a consumer reporting agency, provides
account verification to its financial
institution members to aid t...
INQUIRIES
SOFT INQUIRIES
 Soft inquiries occur when a
person or company checks
your credit report as a
background check, ...
How to Get your Credit Report
Contact all 3 Credit Reporting Agencies:
TransUnion: 1-800-888-4213 or visit www.transunion....
Information on Credit Reports
 Your credit report contains information about:
o Your name, date of birth, SSN, addresses
...
What is a FICO Score?
 A number that lenders use to predict how you
will use credit in the future (350-850).
 Credit sco...
What is a FICO Score?
350 450 550 650 750 850
LOWEST HIGHEST
Very
Poor
Poor Fair Good Excellent
640
Warning Signs of
Credit Problems
 You are at or near the limit on credit cards
 You are only making minimum payments
 Y...
How do I Improve my
Credit Score?
 Pay your bills on time to protect your credit and to
avoid late fees.
o If you cannot ...
How do I Improve my
Credit Score?
 Keep low balances on credit cards (less than
50% of your limit). Remember, 30% of your...
How do I Start a
Credit History?
 Open a secured credit card. These are credit
cards backed by money in a savings account...
credit consultants
 We can help you to understand your
credit report.
 Don’t be afraid to call us, we can
teach you how ...
TARJETA 1
PAGADA A
TIEMPO
350
600
850
TARJETA
ASEGURADA
MORTGAGE
PAGADO A
TIEMPO
CUOTAS DEL
CARRO
PAGADO A
TIEMPO
SERVICIO...
CREDIT CONSULTANTS
PLEASE CALL US :
MIGUEL LA ROSA Ph: (908) 2208922
EMAIL: creditconsultants@yahoo.com
New Jersey - USA
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Credit Management & Fico Scores

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Transcript of "Credit Management & Fico Scores"

  1. 1. What We Need to Know About…. Credit Management & Credit Repair
  2. 2. CREDIT CONSULTANTS  THE AMERICAN DREAM
  3. 3. What is Credit?  When someone lends you money, and you pay them back with interest, they have “extended you credit.”  Credit is the ability to borrow money and manage it responsibly.  Buy now, pay tomorrow.
  4. 4. Why is Credit Important for Me? Credit helps a person:  Buy a home  Rent an apartment  Borrow more money  Finance & insure a car  To apply for a job.
  5. 5. Debit vs. Credit? Debit Cards  Use your own money to buy things  Can spend only what you have  No bills / purchases show on your monthly checking statement  No interest charged  NO REPORTED TO 3 CREDIT AGENCIES Credit Cards  Use the card agency’s money to buy things  Can spend more than you have, up to a given limit  Charge interest if you don’t pay full balance each month  REPORTED EACH TO THE CREDIT AGENCIES
  6. 6. Cost of Credit  Principal is the amount of money you are borrowing.  Interest is the amount the lender charges you to let you use their money. It is a percentage of the principal (charged per year, month, or week.)  Fees cover the lender’s costs to review your credit application or to service your account (maintenance fees, service charges, late fees)
  7. 7. Understanding Terms and Conditions Penalties and Transaction Fees for late payments and/or exceeding your credit limit Example: You have a credit card with a $1,000 limit. You have charged $990 on the card. There is a $19 penalty for late payments AND charges over the limit. Your payment date is due April 1. You mailed your payment on March 30 and it gets posted on your account April 2. You will be charged $38 ($19 for late payment, $19 for over the limit)
  8. 8. Note on Secured Loans Home Equity Loans – A loan secured by the “equity”, or portion that you own, of your home. Example: You buy a home for $100,000. You make a down payment of $20,000 in cash, and take a mortgage loan for $80,000. Your equity in your home is $20,000, the amount you’ve paid. You may be able to borrow money secured by the equity you own in your home. Your home is then collateral for two separate loans: the mortgage and the home equity loan. If you default on either loan, you can lose your home!
  9. 9. What is a Credit History?  Your history of payments on: o Credit cards o Loans o Mortgages o Other (medical bills, utility bills, etc)  Includes judgments, bankruptcies, collections, liens and any other public records.  Your credit report is a written summary of your credit history.
  10. 10. CHECK SYTEMS  Is a consumer reporting agency, provides account verification to its financial institution members to aid them in identifying account applicants who may have a history of accounts mishandling  SAMPLE  People whose accounts were overdrawn and them closed by them or their bank
  11. 11. INQUIRIES SOFT INQUIRIES  Soft inquiries occur when a person or company checks your credit report as a background check, when you are pre-approved for credit cards offers or when you check your own credit, soft inquiries will never lower your score HARD INQUIRIES  When you apply for a loan, credit card, car loan or mortgage you are creating a Hard Inquiry in your credit report.  Hard Inquiries lower your fico score 2 to 5 points, stays in your credit history for 2 years
  12. 12. How to Get your Credit Report Contact all 3 Credit Reporting Agencies: TransUnion: 1-800-888-4213 or visit www.transunion.com Experian: 1-888-397-3742 or visit www.experian.com Equifax: 1-800-685-1111 or visit www.equifax.com Beginning in September 2005, you can request one free credit report per year at www.annualcreditreport.com or by phone at 1-877-322-8228
  13. 13. Information on Credit Reports  Your credit report contains information about: o Your name, date of birth, SSN, addresses o Employment o Total credit limit o Outstanding balance o Number of accounts and their status o Payment history o Credit score o Number of inquiries
  14. 14. What is a FICO Score?  A number that lenders use to predict how you will use credit in the future (350-850).  Credit scores take into consideration: New Credit Amounts owed Types of Credit Used Length of Credit History Payment History 10% 35% 30% 10% 15%
  15. 15. What is a FICO Score? 350 450 550 650 750 850 LOWEST HIGHEST Very Poor Poor Fair Good Excellent 640
  16. 16. Warning Signs of Credit Problems  You are at or near the limit on credit cards  You are only making minimum payments  You have recently been denied credit  You have defaulted on a payment or on your rent
  17. 17. How do I Improve my Credit Score?  Pay your bills on time to protect your credit and to avoid late fees. o If you cannot pay on time, call your creditors before payment is due to explain the situation.  Get current and stay current if you have missed payments. o Recent late payments are more damaging than a bankruptcy discharged a few years ago. o The longer you pay your bills on time, the better your score.
  18. 18. How do I Improve my Credit Score?  Keep low balances on credit cards (less than 50% of your limit). Remember, 30% of your credit score is determined by how much credit you use!  Don’t open a lot of new accounts too quickly, especially if you have been managing credit for a short time.
  19. 19. How do I Start a Credit History?  Open a secured credit card. These are credit cards backed by money in a savings account. Use this card every month and pay it in full to establish a good payment record.  Apply for credit with a department store or specialty store.  Apply for a loan with your credit union.
  20. 20. credit consultants  We can help you to understand your credit report.  Don’t be afraid to call us, we can teach you how to improve your fico score  Be part of the american dream, we show you how...
  21. 21. TARJETA 1 PAGADA A TIEMPO 350 600 850 TARJETA ASEGURADA MORTGAGE PAGADO A TIEMPO CUOTAS DEL CARRO PAGADO A TIEMPO SERVICIOS PAGADOS A TIEMPO TARJETA 2 PAGADA A TIEMPO 640 660 700 750 800 550 500 450 400 580 SERVICIO NO PAGADO TARJETA NO PAGADA COLLECTION BANKRUPTCY JUDGMENTS INQUIRIES COLLECTION INQUIRIES Fuente : Credit Consultants (Copyright ®) FICO SCORE TARJETAS SATURADAS (+50%) MORTGAGES RETRASADO CHILD SUPPORT STUDENT LOANS RETRASADOS STUDENT LOANS PAGADOS A TIEMPO TARJETAS DE CREDITO CERRADAS TARJETA [CARD HOLDER]
  22. 22. CREDIT CONSULTANTS PLEASE CALL US : MIGUEL LA ROSA Ph: (908) 2208922 EMAIL: creditconsultants@yahoo.com New Jersey - USA
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