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  1. 1. Understanding Credit Scores By Adam Leggett
  2. 2. What is a Credit Score? <ul><li>A credit score is a number that summarizes the historical credit information on a credit report. The number reflects the likelihood of becoming delinquent on a loan or credit obligation in the future. </li></ul>
  3. 3. Tell Me More… <ul><li>The three credit reporting agencies are: </li></ul><ul><li>Equifax </li></ul><ul><li>Experian </li></ul><ul><li>Transunion </li></ul><ul><li>Custom scores are from individual agencies: </li></ul><ul><li>FICO is the most common ranges from 300-850 </li></ul><ul><li>PLUS Score is also common, ranges from 330-830 </li></ul><ul><li>Generic scores use the same formula for all lenders: </li></ul><ul><li>Vantage Score is the first generic credit score </li></ul>
  4. 4. Vantage Score <ul><li>One of the unique features of Vantage Score is the scale it uses. Scores range from 501 to 990 in groupings that approximate the familiar academic scale, making it easier for you to understand your score. </li></ul><ul><li>* A: 901-990 (Super Prime) </li></ul><ul><li>* B: 801-900 (Prime Plus) </li></ul><ul><li>* C: 701-800 (Prime) </li></ul><ul><li>* D: 601-700 (Non-Prime) </li></ul><ul><li>* F: 501-600 (High Risk) </li></ul>
  5. 5. What information goes into calculating my credit score? <ul><li>Credit scores use information from three key areas of your credit report: account information, public records and inquiries. Information such as race, gender, where you live and marital status are not used in credit scores. </li></ul>
  6. 6. Area One: Account Information <ul><li>Contains information such as: </li></ul><ul><ul><li>Credit Cards </li></ul></ul><ul><ul><li>Auto Loans </li></ul></ul><ul><ul><li>Student Loans </li></ul></ul><ul><ul><li>Mortgages </li></ul></ul>
  7. 7. Area Two: Public Records <ul><li>Contains Information such as: </li></ul><ul><ul><li>Federal district bankruptcy records </li></ul></ul><ul><ul><li>State and county court records </li></ul></ul><ul><ul><li>Tax Liens </li></ul></ul><ul><ul><li>Monetary judgements </li></ul></ul><ul><ul><li>Also in some states, overdue child support records </li></ul></ul>
  8. 8. Area Three: Inquiries <ul><li>Contains information on requests by lenders to view your credit. </li></ul><ul><li>Inquiries remain on your report up to 2 years. </li></ul><ul><li>There are two types of inquiries: </li></ul><ul><ul><li>Hard inquiries are when businesses view your credit score for the purpose of loan application. Too many hard inquiries can lower your score. </li></ul></ul><ul><ul><li>Soft inquiries occur when you check your credit score or employer checks your credit score. Soft inquiries are never bad </li></ul></ul>
  9. 9. For More Information… <ul><li>Check out these websites </li></ul><ul><ul><li> </li></ul></ul><ul><ul><li> </li></ul></ul><ul><ul><li> </li></ul></ul>