Food & Finance - Financial Boot Camp for Women
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Food & Finance - Financial Boot Camp for Women

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Knowing your credit score is a basic part of taking charge of your finances. In this Food & Finance Boot Camp for Women we discuss the importance of knowing your credit score and how FICO considers......

Knowing your credit score is a basic part of taking charge of your finances. In this Food & Finance Boot Camp for Women we discuss the importance of knowing your credit score and how FICO considers 5 different factors to calculate your score.

This Food & Finance event was created and hosted by Tina Powell and Mark Germain, CFP®, MBA, ADPA® of Beacon Wealth Management LLC on March 18, 2014 at Le Gourmet Factory Cooking School in Englewood, New Jersey.

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  • 1. Financial Boot Camp for Women (and Men too!) Food & Finance Presented by: Beacon Wealth Management @BeaconWealth
  • 2. Food & Finance 3/18/14 3 Important Disclosure Everything in this presentation today is intended to be educational in nature, and hopefully will assist you in reaching your financial goals. However, it is all general in nature, and not specific to any of you or your circumstances. Nothing we say here today can replace real investment advice that is rendered after a thorough review of your financial situation.
  • 3. Food & Finance 3/18/14 4 According to testimony before a House Financial Services subcommittee on March 24, 2010, FICO scores are used in about 10 billion decisions worldwide each year. Source: http://archives.financialservices.house.gov/media/file/hearings/111/quinn_testimony.pdf
  • 4. A credit score represents the likelihood that person will pay his or her debts. Food & Finance 3/18/14 5 0 FICO stands for Fair, Isaac, and Company (1989) 0 FICO is the best known and most widely used credit score model in the United States 0 FICO model is used by credit reporting bureaus such as Experian, Equifax, and TransUnion to produce FICO score Source: http://en.wikipedia.org/wiki/Credit_score_in_the_United_States FACT Act – Fair and Accurate Credit Transactions Act Each U.S. resident is entitled to a free report every 12 months.
  • 5. The FICO score is a three digit number ranging from 300 - 850. Food & Finance 3/18/14 6 300 Low Score 850 High Score
  • 6. The U.S. average credit score is 687. Food & Finance 3/18/14 7 Minnesota's average score of 718 tops Experian's most recent list. The U.S. average is 687, with southern states typically reporting lower scores. Source & Link: http://www.governing.com/gov- data/economy-finance/average-credit- score-by-state.html
  • 7. In addition to lending decisions, credit is used for insurance and employment approvals. Food & Finance 3/18/14 8 Lending Source: http://banking.about.com/od/creditscoresandreporting/a/whatiscredit.htm Image Source: http://www.texascooking.com/features/april2009-homemade-mayonnaise.htm Insurance Employment
  • 8. What information is not considered by the FICO scoring model? a) Name of your last employer b) Requests by consumers for their own credit report c) Interest rate being charged on other accounts d) The value of your assets e) None of the above Food & Finance 3/18/14 9
  • 9. To calculate that score, FICO considers five different factors: Food & Finance 3/18/14 10 Source: http://archives.financialservices.house.gov/media/file/hearings/111/quinn_testimony.pdf Image Source: http://dietsinreview.s3.amazonaws.com/diet_column/wp- content/uploads/2013/10/DONUTS1.jpg Payment history 35% Amounts owed 30% Length of credit history 15% Pursuit of new credit 10% Mix of credit 10%
  • 10. Food & Finance 3/18/14 11 There is no quick fix for bad credit scores.
  • 11. A few guidelines that will very likely impact a consumer’s score in a positive way. Food & Finance 3/18/14 12 1. Pay your bills on time – consistently. 2. Keep credit card balances low. 5. Be patient – demonstrate your responsible credit habits over time. 4. Check your credit report to ensure its accuracy. 3. Don’t open new credit accounts you don’t need.
  • 12. Don’t wait. Now is a perfect time to get credit smart. Food & Finance 3/18/14 13 3 Great Resources Federal Trade Commission http://www.consumer .ftc.gov/articles/0058- credit-repair-how- help-yourself Credit Repair: How to Help Yourself and know your rights. Credit Karma™ www.creditkarma.com Free web-based credit and financial management service for U.S. customers. LifeLock® www.lifelock.com American identity theft protection company which also guards against credit fraud.
  • 13. Empowering and informative programs for women. Join us for future events or host your own! Please email tina@bwmllc.com Tina Powell, Director of Business Management 14 Mark Germain, CFP®, MBA, ADPA® and Tina Powell LinkedIn www.linkedin.com/in/mark-germain www.linkedin.com/in/tinapowell Food & Finance 3/18/14
  • 14. We appreciate your generous participation this evening. We give special thanks to TD Ameritrade and to Nick Prastos, Chef Galit Aboodi, and Alison Gray of Le Gourmet Factory. Food & Finance 3/18/14 15