1
Credit Score Rehabilitation
Presented by: Jennoa R. Graham, Ph.D.
Friday, May 10, 2013
 Income – Money that is received in exchange
for a product, service or contract agreement
 Expense – Money that is paid ...
 Credit (FICO) Score – A numerical value that
lenders use to determine risk (300-850). The
higher the number, the lower t...
 Define credit report and its purpose
 How to obtain copies of credit report(s)
 Review components of credit report
 H...
 A credit report is a detailed history of all credit
related inquiries, payment and personal
information used to determin...
 Credit (FICO) Score = Numerical Risk Value
6
Range: 300 - 850
 FICO is now the standard; there are many
others that will be phased out:
 FICO NextGen Score range: 150–950
 VantageSc...
 There are three major reporting agencies
 Equifax (www.equifax.com)
 Trans Union (www.transunion.com)
 Experian (www....
 Applicant Information
 Full name and any aliases
 All known addresses
 Social Security Number
 Date of birth
 Emplo...
 Profile Summary
 Snapshot of total debt for quick assessment
 Balances of all debt
 Monthly payments of all debt
 # ...
 Tradelines
 Creditors
 Types of Creditors
 Date Accounts Opened
 Credit Amounts
 Co-Signers
 Payment Patterns (las...
 Recent Inquiries
 Names of companies/individuals requesting a
copy of your credit report
 Two year period
 Your reque...
 This prevents anyone from accessing the
report without a Personal Identification
Number (PIN)
 Costs vary among state a...
 Address Right Away
 Make a copy of page where discrepancy is
located
 Write a dated letter to agency and lender (if
ap...
 Retain copy of letter and log date mailed
 Refer to agency website for additional
information
 You should receive ackn...
 Pay all bills on-time
 Pay rent/mortgage first
 Limit yourself to one credit card and keep the
balance low
 If you ne...
 Obtain a free credit report/score every 12 months
 Does not effect credit score
 Does increase the # of inquiries
 DO...
 Keep improving.. Don’t stop
 Set a monthly budget and long term
financial goals…STICK to THEM
 Share your goals with s...
 CredAbility (www.credability.org)
 Nonprofit Credit Counseling & Education
 Free online classes
 TheTruthAboutCreditC...
20
 Credit Consumer Counseling Service of Greater
Atlanta (2013). Retrieved April 23, 2013, from
http://www.credability.org
...
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HHM Finance Night - Credit Rebuilding

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Tips for reviewing, correcting, and improving individual credit scores

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HHM Finance Night - Credit Rebuilding

  1. 1. 1 Credit Score Rehabilitation Presented by: Jennoa R. Graham, Ph.D. Friday, May 10, 2013
  2. 2.  Income – Money that is received in exchange for a product, service or contract agreement  Expense – Money that is paid out in exchange for a product, service or contract agreement  Credit – The act of borrowing money from a lender for the purpose of making a purchase without actual money exchanging hands. 2 Income – Expenses = Profit (Loss) or Surplus (Deficit)
  3. 3.  Credit (FICO) Score – A numerical value that lenders use to determine risk (300-850). The higher the number, the lower the risk.  Fraud – Intentional misrepresentation or concealment of information in order to deceive or mislead (trick).  Tradelines – Loan specific details.  Derogatory – Belittle…extremely Negative  Bankruptcy, Garnishment, Warrants 3
  4. 4.  Define credit report and its purpose  How to obtain copies of credit report(s)  Review components of credit report  How to address discrepancies found on credit report  Tips to improve, monitor, and maintain credit score 4
  5. 5.  A credit report is a detailed history of all credit related inquiries, payment and personal information used to determine credit score.  Applicant Information  Fraud Indicators  Profile Summary  Credit Scores  Trendlines  Collection Records  Recent Inquiries  Public Records 5
  6. 6.  Credit (FICO) Score = Numerical Risk Value 6 Range: 300 - 850
  7. 7.  FICO is now the standard; there are many others that will be phased out:  FICO NextGen Score range: 150–950  VantageScore range: 501 – 990  Equifax credit score range: 280 – 850  Experian PLUS Score range: 330 – 830  Experian’s National Equivalency Score range: 360 – 840  TransRisk New Account Score range: 300 – 850 7
  8. 8.  There are three major reporting agencies  Equifax (www.equifax.com)  Trans Union (www.transunion.com)  Experian (www.experian.com)  Request credit report and/or scores from agency website…not all reports/scores are free  Free copies every 12 months from  www.annualcreditreport.com  Obtain copies from all three agencies  May or may not include credit score 8
  9. 9.  Applicant Information  Full name and any aliases  All known addresses  Social Security Number  Date of birth  Employers  Fraud Indicators  Any occurrence were applicant information does not match lending company database checklist outside of tolerance 9
  10. 10.  Profile Summary  Snapshot of total debt for quick assessment  Balances of all debt  Monthly payments of all debt  # of Inquiries for copy of report(last 6 months)  Past Due, Revolving, Derogatory  Credit Score  May or may not be included  Check credit agency website for details 10
  11. 11.  Tradelines  Creditors  Types of Creditors  Date Accounts Opened  Credit Amounts  Co-Signers  Payment Patterns (last two years)  Collection Records  Details of any debt that has been passed to a collection agency (this is not a garnishment) 11
  12. 12.  Recent Inquiries  Names of companies/individuals requesting a copy of your credit report  Two year period  Your request does increase this count  Inquiries can be blocked by freezing your credit  Public Records (City & State Courts) 12 Bankruptcy Tax Liens Garnishments Monies Awarded Non-Money Awarded Other Derogatory
  13. 13.  This prevents anyone from accessing the report without a Personal Identification Number (PIN)  Costs vary among state and credit agencies  Check fees for Security Freeze and Requirements on individual agency websites  Freezing Placement  Date Range Lift – for a specific purpose  Permanent Removal  Replacement PIN  As of April 29, 2013 fees are < $10 each 13
  14. 14.  Address Right Away  Make a copy of page where discrepancy is located  Write a dated letter to agency and lender (if applicable)  Clearly explain discrepancy and why it is incorrect  Clearly explain the correction or the correct result  Include your full name, current address, and current phone number 14
  15. 15.  Retain copy of letter and log date mailed  Refer to agency website for additional information  You should receive acknowledgement of the letter that includes a confirmation (or dispute) of correction  If disputed write another letter. Keep fighting until other options are provided  Request another free copy in 12 months to verify correction was made 15
  16. 16.  Pay all bills on-time  Pay rent/mortgage first  Limit yourself to one credit card and keep the balance low  If you need more than one, open only as needed  Payoff debt as quickly as possible  Avoid debt consolidation if you can  Address credit report discrepancies right away 16
  17. 17.  Obtain a free credit report/score every 12 months  Does not effect credit score  Does increase the # of inquiries  DO NOT apply for a credit card just to check your score  Just because you are approved does not mean you are doing better or your score has improved  Monitoring programs are optional  Recommended if you are an increased risk for fraud (i.e. common name) and/or have a need to check scores more often than 12 months (monthly costs up to $50)  Use Security Freeze which is less costly (< $10 per occurrence) 17
  18. 18.  Keep improving.. Don’t stop  Set a monthly budget and long term financial goals…STICK to THEM  Share your goals with someone you trust and who will keep you motivated  Get help right away if there is a problem; Don’t let yourself get frustrated or overwhelmed 18
  19. 19.  CredAbility (www.credability.org)  Nonprofit Credit Counseling & Education  Free online classes  TheTruthAboutCreditCards (www.thetruthaboutcreditcards.com)  Insightful information about credit cards  American Financial Solutions (www.myfinancialgoals.org/education/classes.htm)  Money Management  Free online classes 19
  20. 20. 20
  21. 21.  Credit Consumer Counseling Service of Greater Atlanta (2013). Retrieved April 23, 2013, from http://www.credability.org  Nelly, Good (2013). Understanding your Credit Report and its components. Retrieved April 29, 2013, from http://www.debt consolidationcare.com  Word Press (2013). Retrieved April 29, 2013, from http://www.thetruthaboutcreditcards.com  The American Heritage® Dictionary of the English Language (2009), Fourth Edition, Houghton Mifflin Company. Retrieved April 29, 2013, from http://www.thefreedictionary.com 21

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