• Limits or expands our financial stability• Increases or decreases our quality of life• Opens or closes doors to employmentopportunities and promotions• Affects our income by way of interestrates• Limits or expands our purchasing power
Credit Cards-Debt is a 2-Trillion Dollar Industry Americans are the biggest spenders Approx 83% of Divorces are due to Financial Problems Bankruptcy Relief is now more difficult to file due to the new “Means Test” (as of October 2005) January 2006 - Min. Monthly Payments for credit cards increased from 2% to 4% causing already strapped consumers financial hardship All of your Creditors can increase your interest rates if you are ever late on any of your other accounts
Fair Isaac Company Provides risk assessment software to the 3 Credit Reporting Agencies (CRAs) Experian (formerly TRW), Trans Union & Equifax Vantage Score New Scoring Model developed by the Big 3To compete against FICO - Range from 501 -900
• Scores are damaged by the most recently reportedderogatory information• Derogatory information reported prior to 2 yearsdoes not highly impact score• FICO has 88 Negative Rating Factors and only 6Positive Rating Factors• FICO measures whether a person is movingtowards or away from Bankruptcy• There are only 5 basic scoring factors that you cancontrol (we’ll return to this page in a moment)
The Fair Credit Reporting Act:In 1971, Congress passed the Fair Credit Reporting Act (FCRA).The FCRA was passed with the intention to regulate the credit-reporting agencies (CRA). The Act spelled out all the rules andregulations that the credit-reporting agencies have to followbefore they put anything on someone’s credit report. For thepast three decades, those agencies have ignored most of thelaw. Information about “you” has to be accurate and verifiedbefore it is entered on your credit reports. If “reasonableprocedures” have not been correctly followed, then anyverified inaccuracies must be removed from your credit reportsas defined in the FCRA. The three credit reporting agencies areExperian (formerly TRW), Equifax and Trans Union. There areother reporting agencies also that purchase their informationfrom the Big-3, so if you can repair your credit with the Big-3,you basically repair it with everyone.
Inaccurate information is any information that cannot be verified by the CRA and/or the creditor. Erroneous information is any information that has been entered onto a consumer’s credit reports due to human error (data entry error), Social Security Number mismatch error, mixed file error, similar names error, “reasonable procedures” were not followed when the information was entered on the credit report, or any such related error. This happens more often than you think! Obsolete information is any information that is beyond the industry standard of seven years; or ten years for bankruptcy.
• Scores are damaged by the most recently reportedderogatory information• Derogatory information reported prior to 2 yearsdoes not highly impact score• FICO has 88 Negative Rating Factors and only 6Positive Rating Factors• FICO measures whether a person is movingtowards or away from Bankruptcy• There are only 5 basic scoring factors that you cancontrol
FICO scoring factors you can control• 35% Payment History
FICO scoring factors you can control• 35% Payment History• 30% Amounts Owed
FICO scoring factors you can control• 35% Payment History• 30% Amounts Owed• 15% Length of Credit History
FICO scoring factors you can control• 35% Payment History• 30% Amounts Owed• 15% Length of Credit History• 10% New Credit
FICO scoring factors you can control• 35% Payment History• 30% Amounts Owed• 15% Length of Credit History• 10% New Credit• 10% Types and Numbers of Credit Cards to Use!
Consumers obtain loans faster Credit decisions are fairer Older credit problems count for less - Great for Bankruptcies More available credit Credit rates are lower over all With an understanding of the system, a person can improve his or her credit rating from D to A credit
HARD INQUIRIES Only “permissible use” credit inquiries count against you, including credit card offers you’ve applied for. SOFT INQUIRIES Credit reports you pull yourself or from a consumer site do not count. Marketing inquiries also fall in this category. For Mortgage or auto loans, FICO counts multiple inquiries during a 30-day period as just one inquiry. In the old Scoring Model, multiple inquiries were counted as one inquiry within a 14-day period.
Privacy Marketing & Junk Mail• For possible 2 to 10 pointsincrease on your FICO, go to: www.optoutprescreen.com• Stop telemarketer phone calls: www.donotcall.gov 888-382-1222
Bankruptcies 10 Years Collections 7 Years Public Record 10 Years Inquiries 2 Years Check Systems (for banks) 5 Years Telecheck (for merchants) 5 Years
Do not be too quick to pay an old collection account; depending if you’re getting a loan or just repairing credit. Judgments will reflect as “Satisfied” when paid. Collections will reflect as “Paid” when paid. Liens will reflect as “Released” when paid.
Make a difference inyour life now, that willdramatically effect your financial future.
Offer a one-year Flat Fee Credit Repair program from SBS Credit Services (Payments Available see contract) See results in the first 90 days Derogatory Info, Disputes & Deletions Monitor Account Status 24/7 via the web Professional and Courteous service Personal client attention/service custom to your needs Turn your C & D ratings to A+ Make a difference in people’s lives