Maintaining A Good Credit Rating Presented by Shaun Sykes
Topics of Discussion:• What is credit?• Credit terms• How does your credit become bad?• Who monitors your credit rating?• What are the consequences of having bad credit• How long does you bad credit last?• How can you improve your credit rating?• Site to visit for credit information
What is credit?• A contract to receive money, goods or services now, paying for them over time at an established interest rate.• A sum of money or equivalent purchasing power, as at a shop, available for a person’s use.• The positive balance in a person’s bank account.• Commendation or approval, as for an act or quality.• A person or thing serving as a source of good influence, repute, ability, etc.• The quality of being believable or trustworthy.• Belief in the trust, reliability, quality, etc., of someone or something.
Credit terms:• Line of credit: A fixed • Credit History: An important amount of money that a record of each consumer’s company can draw against historical usage and from a lender. A line of credit payment of credit. Typically is usually for an unlimited these records go back seven period of time. years, and they have a• Credit account: A credit tremendous impact on your system by means of which choices for credit today. customers may obtain goods • Credit card: A card issued and services before by banks, businesses, etc., payment. Also called: enabling the holder to obtain charge account gods and services on credit.• Credit rating: An evaluation • Credit Union: A cooperative of the creditworthiness of an association whose members individual or business can obtain low-interest loans enterprise. out of their combined savings.
How does your credit become bad?• Delinquent or slow payment of bills• Prior history viewed by others• Stolen credit cards, accounts or account numbers that are misused or abused• Possible mistakes or errors made by the credit recording agencies
Who monitors your credit rating?• Credit card issuers• Auto Financing companiesCollege Loan issuers• Insurance Companies• Landlords• Potential employersWho keeps and gathers credit information?• Credit Bureaus
What are the consequences of having bad credit?• You incur a bad credit rating • Your name can be damaged• You lose state and/or federal • Your goods can be tax refunds repossessed• Your wages can be • You may need to have garnished others with good credit co-• Inegibility for automobile sign for you rentals • Legal action can be brought• You receive lower credit against you rating, which incur higher • It takes a long time for you to interest ratings repair your credit, or bounce• You are unable to finance back from negative credit anything, such as a home, • You may be denied credit automobile, a practice, etc. from other agencies
How long does your bad credit last?• Inquiries – 2 years• Late payments – 7 years from month that late payment was due• Charge-offs – 7 years• Collection Accounts – 7 years• Lawsuits and Judgments – 7 years or until the governing statue of limitations expires• Bankruptcy - (Chapter 7) – 10 years• Bankruptcy - (Chapter 13) – 7 years• Paid Tax Liens – 7 years from date of payment• Unpaid Tax Liens – Forever (unless paid)• Foreclosures/Repos – 7 years from foreclosure or repo date• Unpaid Federal Student Loans – Forever (unless paid, after which they can appear for 7 years)
How can you improve your credit rating?• Get your credit history from a • Consolidate your debts into credit bureau, review it and one payment work on repairing it • Take your debts to debt• If mistakes are found, write management or credit repair the credit bureau to have the companies (find out what mistakes corrected services the business• Devise a re-payment plan provides and what it costs and make payments and first) pay-offs on things you owe • File for bankruptcy – used a• If you locate credit fraud on last resort (Chapter 7 and your accounts, notify the Chapter 13) credit bureaus immediately • Contact creditors and devise• As for credit cards – use a workable plan with them them less, hide them and if • Start paying back on time – all else fails cut them up you will avoid interest payments
Topics of Discussed:• What is credit?• Credit terms• How does your credit become bad?• Who monitors your credit rating?• What are the consequences of having bad credit• How long does you bad credit last?• How can you improve your credit rating?• Site to visit for credit information