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Credit 101 2014
- 1. “I am just happy to have someone like you to turn to. We have dealt with many credit repair companies in the past and never have been happy with any of them, so thank you for running such a professional business and having wonderful customer service.” Linda C. Sr. Loan Processor Credit 101
- 2. Who Is Blue Water Credit? • We are a Local Legal and Ethical Credit Restoration Company. • Our Purpose is helping our clients improve their credit, to qualify to purchase a home or for Peace of Mind • Bonded in the State of CA- BUIFSU0484434 • Registered with Dept of Justice yearly. • Guaranteed Results! (see website for details). • We will not take on clients that we feel we can’t help. • We believe in having clear communication and expectations with our customers.
- 3. What exactly is it? CREDIT SCORE
- 5. FICO predicts the Odd’s of Default Score Odds of Being Late 800 1 out of 1500 720 1 out of 650 680 1 out of 100 650 1 out of 50 620 1 out of 15
- 6. Where can I get my Scores?
- 7. Where can I get my FICO Scores? www.myfico.com
- 8. What’s another reason credit scores are so confusing?
- 9. • At Experian: Experian, FICO Risk Model V2–Personal finance Experian, FICO Risk Model V2– Installment Loan Experian, FICO Risk Model V2 – Bankcard Experian,FICO Risk Model V2 – Auto Experian, FICO Risk Model V2 Experian, FICO Risk Model V3 Experian, FICO Risk Model V3–Auto Experian, FICO Risk Model V3–Personal Finance Experian, FICO Risk Model V3– Installment Loan Experian, FICO Risk Model V3–Bankcard Experian, FICO Risk Model 08–Mortgage Experian, FICO Risk Model 08–Auto Experian, FICO Risk Model 08–Bankcard Experian, FICO Risk Model 08 Experian, FICO Advanced Risk Score 1.0 Experian, FICO Advanced Risk Score 2.0 • At Equifax: BEACON 09 BEACON 09 Mortgage BEACON 09 Bankcard BEACON 09 Auto BEACON 5.0–Mortgage BEACON 5.0–Auto BEACON 5.0–Bankcard BEACON 5.0–Installment BEACON 5.0–Personal Finance BEACON 5.0 BEACON 96 BEACON 96–Auto BEACON 96–Bankcard BEACON 96–Personal Finance BEACON 96–Installment Pinnacle 1.0 Pinnacle 2.0 • At TransUnion: FICO Risk Score, Classic 98 FICO Risk Score, Classic 98 Auto FICO Risk Score, Classic 98 Personal Finance FICO Risk Score, Classic 98 Installment Loan FICO Risk Score, Classic 98 Bankcard FICO Risk Score NextGen FICO Risk Score NextGen 03 FICO Risk Score, Classic 08 FICO Risk Score, Classic 08 Auto FICO Risk Score, Classic 08 Bankcard FICO Risk Score, Classic 08 Mortgage FICO Risk Score, Classic 04 FICO Risk Score, Classic 04–Auto FICO Risk Score, Classic 04–Bankcard FICO Risk Score, Classic 04 – Installment FICO Risk Score, Classic 04–Personal Finance FICO Scoring Models
- 10. What Year were the Credit Bureaus started? Fico? • Bureaus • A. 1960’s • B. 1930’s • C. 1900’s • D. 1860’s • FICO • A. 1990’s • B. 1980’s • C. 1970’s • D. 1950’s
- 11. New News in the credit world? • Fico’s first possible rival: Vantage Score 3.0 – Started by the big 3 to compete with FICO • Ignores paid collection • Takes into account recessions and natural disasters – Will it take over? • FICO Next Gen or Fico 9 – Collections under $100 not scored against you
- 12. New News in the credit world? • Lenddo – Lenddo is the world's first online platform that helps the emerging middle class use their social connections to build their creditworthiness and access local financial services. – Helps credit: linked in # of friends – Hurts credit: posts on new debt, friends habits, consistent relationship issues
- 13. How Much Does Bad Credit Cost? According to MSN Money: – $300 per month or over $200,000 over a lifetime! – What is a bad FICO score? • 600 and Below is Poor • 640 is Fair • 700 is Good • 740+ is Excellent
- 14. -Past Delinquencies Late payments, Collections, Charge Offs, Liens. -Debt Ratio Credit Card Balance vs. Limit. Keep lower than 30% -Average Age of File The Older Credit Cards Score More -Mix of Credit 3-5 Credit Cards, 1 Auto, 1 Home -Inquiries 85 pts: Lose Up to 5 points Exception: Rate Shopping: Auto or Mortgage Credit report can be pulled unlimited amount of times within 15-30 days depending on the scoring model. Will affect the score one time only. hurts score for 1 year but are kept as records for 2 years. Credit Score Components Fico Score Range: 300 to 850 points Past Delinquencies 35% Debt Ratio 30% Average Age of File 15% Mix of Credit 10% Inquiries 10% Percentage of Score
- 15. • Unpaid tax liens 15 years from filing date • Bankruptcies chapter 7 & 11 10 years from filing date • Bankruptcies Chapter 13 7 years from filing date • Paid Tax Liens 7 years from date satisfied • Late Payments 7 years • Short sale, foreclosure 7 years • Charge-offs 7.5 years from 1st late pay • Judgments 7 years or S.O.L. (if longer) • Inquiries 2 years Is Bad Credit a Life Sentence?
- 16. To Settle or Not to Settle… that is the Question? When should someone settle a collection? If it is with in the state’s S.O.L. If it is over $2000 When should someone settle a Charge off Most of the time Why?
- 17. • It is virtually impossible to predict score, but these are some estimates on points lost to a score of 740: – 30 days late: 40 - 110 – 90 days late: 70 – 135 – Foreclosure, short sale or deed-in-lieu (same effect): 85 – 160 – Bankruptcy: 130 – 240 – The higher the score the larger the loss. Impacts on Credit Blue Water Credit
- 18. Who Understands Credit Report Codes?
- 19. How a Trade Line is Rated or Coded A Authorized User C Jointly liable with a Maker (see M) I Individual account M Maker responsible for account. Co-maker is responsible if Maker defaults. P Participant in a shared account S Shared account T Terminated U Undesignated: Not enough information to classify an account X Deceased O Open Account R Revolving Account I Installment M Mortgage C Credit line Type of Account ECOA codes TransUnion Equifax Experian 0 Too new to rate Too new to rate Too new to rate 1 As agreed As agreed 30 days late 2 30-59 days late 2 payments late 60 days late 3 60-89 days late 3 payments late 90 days late 4 90-119 days late 4 payments late 120 days late 5 120+ days late 120+ days late 150 days late 6 180+ days late 180+ days late 180+ days late 7 Wage garnishments Wage garnishments Chapter 13 bankruptcy 8 Repossession Repossession Repossession 9 Charged Off Charged Off Charged Off Payment History
- 20. How to Remove an Account from Dispute 1. Call the creditor directly. Explain there is a Compliance Condition Code listed on the credit report that reads “Account Information Disputed by Consumer”. Request it be removed by submitting a Universal Data Form to the credit bureaus. 2. Request that you get something in writing. 3. Mail written requests to the credit bureaus.
- 21. About Credit Repair • Fees can not be charges upfront. Only after services have been performed. • Company must be bonded and registered with the Department of Justice each year. • 100% removal of negative items can not be guaranteed. • Results take 30 to 45 days in most cases. • Items that are hurting a credit score can be removed if they are: Incorrect, incomplete, outdated or unverifiable. • Items that can be permanently removed from a credit report are: late payments, paid collections, paid charge offs, judgments, tax liens, accounts included in bankruptcy, bankruptcy, and inquiries.
- 22. What are the Stats? On average 3 out of 10 referrals hire us On average our clients see a 15 point increase per month in credit scores Fees are determined by the amount of work performed. On average we can settle collections for 40% of the balance
- 23. Information to send Your Database bluewatercreditblog
- 24. Thank You! Address: 300 Harding Blvd., Ste 205, Roseville, CA 95678 Phone: 916-315-9190 or 877 577 7496 Website: www.bluewatercredit.com Facebook: www.facebook.com/bluewatercredit