1 / 20

Understanding Your Credit

Understanding Your Credit. Purdue Employees Federal Credit Union. The Basics. What is a credit report? Information about: Last known and previous address Last known employer Monthly debts Loan repayment history Credit balances vs. available limits . The Basics .

Download Presentation

Understanding Your Credit

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. Understanding Your Credit Purdue Employees Federal Credit Union

  2. The Basics • What is a credit report? Information about: • Last known and previous address • Last known employer • Monthly debts • Loan repayment history • Credit balances vs. available limits

  3. The Basics • What is a credit bureau? • Company that stores your credit information • Also known as Credit Reporting Agencies (CRA’s) • Three national reporting agencies: • TransUnion • Equifax • Experian (formerly TRW)

  4. The Basics • Credit reports can be different depending on which agency it is being pulled from and for what purpose • Applying for an auto loan • Employment • Mortgage • Credit Card

  5. Stands for Fair and Accurate Credit and Transactions (FACT) Act The FACT Act was signed into law December 2003 The FACT Act

  6. The FACT Act • Provide better consumer credit protection • Free copy of credit report every 12 months from each of the CRA’s – www.annualcreditreport.com • Ensure credit histories are accurate • Create a national system of fraud detection • Red flag indicators • Fraud alerts • ID theft procedures • Establish communication between the 3 CRA’s

  7. Your Credit Report • Your credit report is divided into 6 (six) main sections: • Consumer Information (address, birthday and employment) • Consumer Statement • Account Histories • Public Records • Inquiries • Creditor Contacts

  8. Your Credit Score • What is a credit score? • A complex statistical model developed from thousands of consumer files • Why was the credit score created? • Credit scores came into wide use in the 1980’s • Used to eliminate judgment decisions • Create consistency and equality

  9. Your Credit Score • How is my score calculated? • Payment history • Outstanding debt • Credit account history • Recent Inquiries • Types of Credit Scores may be different from report to report depending on the type of scoring model being used.

  10. Your Credit Score • What factors don’t affect my credit score? • Debt ratio • Income • Length of residence • Length of employment

  11. How To Improve Your Score • Pay your bills on time • Keep credit card balances low (under 35%) • Apply for and open new credit only as needed • Pay off debt instead of moving it around • Avoid excessive inquiries • Give yourself time

  12. Create A Positive History • Print clearly an all credit applications • Consistently use your complete name • Pay your bills on time • Set up a budget • Review your credit report 60 to 90 days before making a major purchase (home or car)

  13. Falling Behind? • Contact your lenders immediately • Stop using your credit limits until your finances are under control • Look to professionals for help

  14. Credit Misconceptions • Your score will drop if you check your credit • Closing old accounts will improve your credit score • Once you pay off a negative record, it is removed from your credit report • Being a co-signer doesn’t make you responsible for the account • Paying off debt will add 50 points to your score

  15. Possible Warning Signs Of Fraud • Strange data • Maxed-out credit cards • Late payments • Mistaken identity • Credit score differences

  16. Emergency Contacts • Your financial institutions • The credit reporting agencies • TransUnion (800) 680-7289 • Equifax (800) 525-6285 • Experian (888) 397-3742 • The Federal Trade Commission • www.consumer.gov/idtheft • The police

  17. Questions?

More Related