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Your Credit Report
Your Credit Report
Your Credit Report
Your Credit Report
Your Credit Report
Your Credit Report
Your Credit Report
Your Credit Report
Your Credit Report
Your Credit Report
Your Credit Report
Your Credit Report
Your Credit Report
Your Credit Report
Your Credit Report
Your Credit Report
Your Credit Report
Your Credit Report
Your Credit Report
Your Credit Report
Your Credit Report
Your Credit Report
Your Credit Report
Your Credit Report
Your Credit Report
Your Credit Report
Your Credit Report
Your Credit Report
Your Credit Report
Your Credit Report
Your Credit Report
Your Credit Report
Your Credit Report
Your Credit Report
Your Credit Report
Your Credit Report
Your Credit Report
Your Credit Report
Your Credit Report
Your Credit Report
Your Credit Report
Your Credit Report
Your Credit Report
Your Credit Report
Your Credit Report
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Your Credit Report

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What a credit report is and how to correct or improve it. Presented by CLAROBuffalo and the Western NY Law Center …

What a credit report is and how to correct or improve it. Presented by CLAROBuffalo and the Western NY Law Center

Published in: Economy & Finance, Business
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  • 1. Your Credit Report What a credit report is and how to correct or improve it
  • 2. What is a Credit Report? There are three major credit reporting agencies A credit report is a record of your borrowing history. It shows what you borrowed and how you repaid it.
  • 3. Name & Address Recent Employers Creditors who have ordered your credit report It’s all about you!  Your identifying information Bankruptcies Foreclosures Payment History on credit accounts Birth date & Social Security Number Court judgments  Payment history of debt/credit cards  A list of recent requests of your credit history  Public records about your debts
  • 4. You’ll See:  A Full List of Your Creditors  Payment History  Public Records It’s All There! Whenever you apply for a loan or credit, the lender gives information about your account to the credit reporting agencies. Credit reporting agencies use this information as the basis of your credit report.
  • 5. Rent, utilities and other non-credit accounts will only show up on your credit report if you were delinquent and the bill went to collections. Don’t Worry… Credit reports don’t show:  Medical conditions  Non-credit accounts  Comments from creditors  Criminal Records
  • 6. 7 Most negative information stays on the report for seven years Court judgments that have been paid can stay for seven years Some student loan information can stay on the report for more than seven years 10 Bankruptcy can stay on your report for ten years Up to 20! Court judgments that have not been satisfied can stay on your report for up to twenty years How Long? Most negative information can stay on your credit report for seven years, but there are exceptions.
  • 7. What is It?  A number between 300 and 850  Higher is better  Compares you to other people like yourself A numeric rating showing how likely you are to repay a loan.  There are many different scoring formulas  The most common scoring formula is “FICO”* * Fair Isaac and Company
  • 8. Your FICO Score Recent Inquiries = 10% Types of Credit = 10% Payment History = 35% Length of History = 15% Outstanding Debt = 30% Payment History Outstanding Debt Length of History
  • 9. Not Reported Your FICO score cannot be influenced by any of the following factors:  Race, religion, sex or marital status  prohibited by Federal law Age Employment information Child/Family support payments Self inquiries, employer inquiries or lenders making “promotional” offers or reviewing your current accounts
  • 10. Other Influences Many lenders use their own credit scoring formula that may take many other factors into account.      Age Education Level Income Home owner vs. renter Other factors
  • 11. Who would want to see it?  Employers  must ask for your permission first  Landlords  Lenders  Insurance companies  Government agencies  for child support collection  public assistance eligibility (to check for hidden assets) Any Protection? There are laws about who can see your credit report and what is required in order for them to see it.
  • 12. It is against the law for creditors to base their credit decisions on your sex, age, race, color religion, natural origin, marital status, receipt of public income or assistance, or the exercising of your rights under the credit laws. You Have Rights… There are laws with regard to how creditors can make their lending decisions. The Fair Credit Reporting Act (FCRA) is the US Federal Law that regulates the collection and distribution of consumer credit information.
  • 13. Denial If you are denied credit, the Equal Credit Opportunity Act requires that the creditor give you a notice that tells you the specific reasons your application was rejected, or the fact that you have the right to learn the reasons if you ask within 60 days. You have rights under the Equal Credit Opportunity Act that can help you take action if you are denied credit. A lender who denies you based on discrimination can be fined. A lender must tell you why you have been denied.
  • 14. Sometimes you can be denied credit because of information from a credit report. If so, the Fair Credit Reporting Act requires the creditor to give you the name, address and phone number of the credit reporting agency that supplied the information. You should contact that agency to find out what your report said. This information is free if you request it within 60 days of being turned down for credit. Who did it? You should find out why you were denied. You should find out who the bad information came from. You should do this within 60 days.
  • 15. Ordering a Credit Report You can order your credit report and score three different ways: Phone: 877.322.8828 On-line: www.annualcreditreport.com US Mail: Annual Credit Report Request Service PO Box 105281 Atlanta, GA 30348-5281 Complete the “Annual Credit Report Request” form and mail it. You can print the form at www.ftc.gov/credit
  • 16. Credit Score?  Your free credit report will not contain your credit score  You can purchase your credit score when you order your free report  it only costs a few dollars to order the credit score.
  • 17. Requirements You will need to provide information in order to get your report:  Name  Address  Social Security Number  Date of Birth  Identity Verification  name of your credit card company, or  something that only you would know
  • 18.  If you request the report on-line, it should be generated immediately  If you request the report by mail, it should be mailed to you within 15 days Immediately or… 15 Days or Less
  • 19. Additional credit reports can be ordered directly from any one of the top 3 reporting agencies: How Often? 1-888-EXPERIAN (397-3742) www.experian.com Experian National Consumer Assistance Center PO Box 2002 Allen, TX 75013-2104 1-800-685-1111 www.equifax.com Equifax Customer Information Service Center PO Box 740241 Atlanta, GA 30374-0241 1-800-916-8800 www.transunion.com TransUnion Corporation PO Box 390 Springfield, PA 19064-0390 These agencies charge about $9 for the report and a few dollars more for the credit score. You can only get one free credit report a year. Additional reports can be ordered.
  • 20. Other Ways You can get a free credit report if you have been denied credit in the past 60 days. Other Reasons You can also get one free report each year if:    you are unemployed and will be applying for a job within the next 60 days you receive public assistance you have reason to believe that your report contains inaccurate information due to fraud
  • 21. Mistakes You should check your report for incorrect and old information  more than 3 out of 4 people have some mistake on their report  Look for incorrect late payments or charge-offs  check for personal information that does not belong to you (name, address, birth date, social security number, etc.) Check for old/outdated information which should no longer be on the report  negative information older than 7 years  bankruptcy information older than 10 years
  • 22. Mistake? Contact the Creditor! 1. Contact the creditor that reported the incorrect information 2. Ask the creditor to report its mistake to the credit reporting agency 3. Make sure the agency removes the entry from your report
  • 23. Send a Letter Your Name Your Street Address City, State, Zip Date Certificate of Mailing RE: Your account number Fill in this information Dear (Credit Card Company) I am writing to dispute an incorrect charge on my statement of [fill in date]. The charge I dispute is also circled on the attached copy of my statement. I dispute this charge because [give reason] I have attached the following evidence in support of my dispute. Please investigate this dispute and provide me with a written statement of outcome. Thank you. Sincerely, [Your Name]  Send the Letter Certified Mail  Save the proof of delivery  To find the mailing address, call your credit card company or check the “Billing Rights Summary” on your statement.  Attach supporting evidence (copies, not originals!)
  • 24.  The creditor is required by law to investigate your dispute within 30 days and notify you with the results  If they cannot verify the disputed item within this time, they must delete the information from your report 30 Days Your dispute must be investigated within 30 Days!
  • 25. Follow Up!  Make sure the information comes off your report -- and stays off it too  There are three credit reporting agencies – check them all  Check in another six months to make sure the information doesn’t reappear
  • 26. You can take steps that may help explain why there is negative information on your credit report. Bad but True….  Credit agencies are require to accept these statements if they explain why the information is incorrect  Credit agencies can send these statements to anyone who received a copy of your credit report in the last six months  They do not have to accept statements as to why you had past problems, but many do You can only dispute negative information on your report if the information is more than 7 years old (or 10 years old for bankruptcy).
  • 27. How to do it…  Keep statements brief  Use under 100 words  Send to the credit reporting agency Your Statement If the negative information shows up on reports from more than one of the reporting agencies, send your statement to all of them.
  • 28. Have you… In the Past…  Made arrangements to pay off the loan/debt?  Is the problem several years old? If so, the creditor may be willing to contact the reporting agency on your behalf. It doesn’t hurt to ask! Creditors/Lenders can contact the credit reporting agencies and ask them to remove the information from your report.
  • 29. Federal law requires that creditors at least consider any explanation you have for a negative entry on your credit report. Tell it to the lender: It is recommended that you explain  why you had temporary credit problems  what steps you have taken to resolve the problem  why your finances are more stable now Explain why you had credit problems directly to the lender to whom you are applying.
  • 30. Credit Repair Agencies  Most experts suggest you avoid them  These companies often charge hundreds or thousands of dollars for simple services you can do for free  Services you need help with are often available through trusted community organizations  Many do things which are illegal, which can get you into trouble  Credit repair agencies often make your problem worse Source: National Consumer Law Center, “The Truth About Credit Reports and Credit Repair Companies;” Federal Trade Commission “Credit Repair: Self-Help May Be Best;” Consumer Action, “Credit Repair Scams: They Make Your Money Disappear.”
  • 31. False Claims Claim: Only they can remove old or inaccurate information. Truth: You can do this yourself. Claim: Even if the information is accurate, they can fix it. Truth: It is illegal to lie to a credit reporting agency in order to remove negative information. You could be prosecuted for this. Claim: They can guarantee you a credit card or loan. Truth: You often can’t trust the offers (high fees and interest rates they would benefit from). Source: National Consumer Law Center, “The Truth About Credit Reports and Credit Repair Companies;” Federal Trade Commission “Credit Repair: Self-Help May Be Best;” Consumer Action, “Credit Repair Scams: They Make Your Money Disappear.”
  • 32. Potential Problems  Some credit repair organizations advertise and engage in unfair business practices  The Credit Repair Organizations Act (CROA) outlines prohibited practices, required disclosures and contract requirements
  • 33. Credit Repair Organizations Act The CROA is part of the Consumer Credit Protection Act, it stipulates:  Credit repair organizations must give you a copy of the “Consumer Credit File Rights Under State and Federal Law” before you sign any contract  You have three days to cancel a contract without paying any fees  Credit repair agencies cannot:  make false claims about their services  collect fees from you until they have completed the promised services  Perform any services until you have signed a written contract Source: National Consumer Law Center, “The Truth About Credit Reports and Credit Repair Companies;” Federal Trade Commission “Credit Repair: Self-Help May Be Best;” Consumer Action, “Credit Repair Scams: They Make Your Money Disappear.”
  • 34. You Can Improve Your Credit Report!
  • 35. Check Your Credit Report Once a year It’s free Verify accuracy
  • 36. Resolve Errors If negative information is correct,  send the reporting agencies a personal statement  this will be included when your report is sent out
  • 37. Develop Good Credit Habits  Good credit habits boost your credit score  Credit scores are constantly changing  Recent information counts more than older information
  • 38. Build Your Credit  A secured loan can help you build new credit  loans are secured by money you have in a savings account  credit unions and banks may offer this service  Secured loans help rebuild credit too
  • 39. Responsible Lenders Only! Avoid credit card offers and lenders who may promise you “fast cash”
  • 40. Shop Around for Credit Compare offers from at least two or three creditors Make sure you get the best offer possible
  • 41. Cancel Cards? Consider cancelling cards with unfavorable terms Consider keeping only a few credit cards Keep cards with the best interest rates and terms possible
  • 42. Good Source for Information: National Consumer Law Center: “Surviving Debt: A Guide for Consumers”
  • 43. Other Resources “The Truth About Credit Reports and Credit Repair Companies” “Credit Repair: Self-Help May Be Best; Consumer Action” “Credit Repair Scams: They Make Your Money Disappear”
  • 44. Helpful Website: http://www.nedap.org/ Resources for Consumers Credit Report Info Packet Annual Credit Report Request Form Sample Credit Report Dispute Letter Sample Follow-up Letter Sample Credit Card Dispute Letter
  • 45. Need Help with Your Credit Report? Call the CLARO Hotline: (716)828-8432 Thank You! This concludes the slideshow Your Credit Report. Visit CLARO online at http://clarobuffalo.org/

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