A person's credit report provides important information about their financial history and creditworthiness. It is important to understand credit reports and how to maintain good credit. Some key things to understand include the different types of credit, your rights and responsibilities regarding credit use, how to obtain and read your credit report, factors that affect your credit score, and steps to correct any errors on your report. Regularly reviewing your credit report and practicing responsible credit habits can help you make informed financial decisions and protect your credit rating over time.

1. “A person’s credit report is one of the most important tools consumers can use to maintain their financial security and credit rating, but for so long many did not know how to obtain one, or what to do with the information it provided.” -Ruben HinojosaMaking money sensetips and ideas to help your family prosperUnderstanding Credit

2. What is Credit?Money you borrow and plan to repay.In most cases, there is a charge for borrowing the money (fees or interest).Questions to ask before you use credit for a purchaseWhy am I buying?Is it a need or a want?How am I going to pay for it?Rate affordability, how much is it really going to cost?Monthly payments, will it fit into my budget?Could I pay in cash or with other resources?How long is it going to take to pay back?What is the plan to pay the credit card bill?1Source: www.practicalmoneyskills.com

3. Advantages and Disadvantages of credit2

4. Most Common Types of CreditRevolving: allows you to borrow money at any time up to a set limit. (Credit Card & Home Equity Line of Credit)Installment: allows you to borrow a specific amount of money at one time for a defined purpose. (Car, Boat, Motorcycle, Student, or Personal loan)Non-Installment or service: allows you to pay for a used service at a later date. (Furniture stores, Utility companies, & Doctor bills)3

5. Your Responsibilities and RightsWhat is your responsibility when it comes to using credit?Pay it backNot to run up more debt than what you can comfortably pay backUnderstand your credit card termsYour Rights:Truth in Lending ActFair Credit Reporting ActEqual Opportunity ActFair Credit Billing ActFair Debt Collection Practices Act4

6. Your Rights…..Continued 5

7. Your Rights…….Continued 6

8. How Much Can You Afford20-10 Rule7

9. Credit Scores Often Misunderstood66.5% of Americans don’t know or responded incorrectly when asked to define a good credit score, which is correctly defined as a score of 700 or higher.54% incorrectly believed that age is a factor in determining credit scores.52% do not regularly review their credit report.23% have never done so. 8Source: www.thriventffc.com

10. Understanding Your Credit Report What is a Credit ReportA document containing detailed information on a person’s credit history, including identifying information, credit accounts and loans, bankruptcies and late payments, and recent inquiries. It can be obtained by prospective lenders with the borrower’s permission, to determine his or her credit worthiness. Credit Reports include four types of information:Identifying InformationSocial Security NumberDate of BirthPhone NumberCurrent and Previous Addresses Credit InformationWho they oweWhat they owe, installment, revolving paymentsPublic Record InformationJudgmentsBankruptcies (10 years)Medical CollectionsLibraries InquiresPromotional or uninvited inquiresPre-Approval from company promotions Credit Inquires9Source: http://www.investorwords.com/5490/credit_report.html

11. What Makes Up A Credit Score10

12. How Can I Get My Credit Report/Score11www.annualcreditreport.com (One free per year)Three Credit Bureaus:Equifax (www.equifax.com)P.O. Box 105873Atlanta, GA 30348 Trans Union Corporation (www.transunion.com)P.O. Box 390, Springfield, PA 19064-03901Experian (www.experian.com) P.O. Box 2350, Chatsworth, CA 91313-2350

13. Why Your Credit Score Might Be Low & How To Improve It12

14. Steps to Correct Credit Report ErrorsGet a copy of your credit report!Go to http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre21.shtmfor a sample dispute letter.13

15. Types Of Credit Cards14

16. Points To Consider When Shopping For A Credit CardInterest Rate – locked, variable, introductory Annual FeesGrace PeriodLate FeesPercent of payment you owe – minimum paymentHow do you plan to use cardRewardsService Payments locally or onlineWhere is it acceptedForeign transaction rateCash advance featuresBalance transfersCredit limit 15

17. Reducing Credit Card Debt-Power Pay“How can I get rid of my credit card debt?”Stop making new charges.

18. Gather all your credit card bills together.

19. Write down the total balance, the minimum payment required and the interest rate.Log on to: https://powerpay.org/index.phpSelect the state of Wisconsin