Your Credit Report

Your Credit ReportYour Credit Report

Understanding the Understanding the puzzlepuzzle

The basics: What is a credit report?

The basics: What is a credit report?

Your credit payment history is recorded in a file or report.

These files or reports are maintained and sold by "consumer reporting agencies" (CRAs).

A credit bureau agency is a CRA.

Your credit payment history is recorded in a file or report.

These files or reports are maintained and sold by "consumer reporting agencies" (CRAs).

A credit bureau agency is a CRA.

How do you know if you have a credit report?

How do you know if you have a credit report?

You have a credit record on file at a credit bureau if you have ever:

applied for a credit or charge account applied for a personal loan applied for insurance applied for a job

You have a credit record on file at a credit bureau if you have ever:

applied for a credit or charge account applied for a personal loan applied for insurance applied for a job

What is in a credit report?What is in a credit report?

Your credit record contains information about your debts, and credit payment history.

It also indicates whether you have any financial judgments, or have filed for bankruptcy.

Your credit record contains information about your debts, and credit payment history.

It also indicates whether you have any financial judgments, or have filed for bankruptcy.

The Big 3The Big 3

There are three major credit bureaus: Equifax, Experian (formerly TRW), and TransUnion.

Credit Bureau of Baton Rouge is affiliated with Equifax.

There are three major credit bureaus: Equifax, Experian (formerly TRW), and TransUnion.

Credit Bureau of Baton Rouge is affiliated with Equifax.

The Big 3The Big 3

They compete with each other They do not share information

contents of each may be different.when reviewing, get copies of all

three.

They compete with each other They do not share information

contents of each may be different.when reviewing, get copies of all

three.

Inside a credit report…Inside a credit report…

While the formats are different, all of the credit bureaus list the same types of items:

1. Identifying information

2. Accounts or “trade lines”

3. Public records

4. Inquiries

5. Additional Information

While the formats are different, all of the credit bureaus list the same types of items:

1. Identifying information

2. Accounts or “trade lines”

3. Public records

4. Inquiries

5. Additional Information

Identifying InformationIdentifying Information

This information generally comes from credit applications that you have previously submitted to creditors

This information is not used in your credit score: name, address, social security number, age,

race, color, religion, national origin, sex or marital status, employment info, rental agreements, items reported as child support.

This information generally comes from credit applications that you have previously submitted to creditors

This information is not used in your credit score: name, address, social security number, age,

race, color, religion, national origin, sex or marital status, employment info, rental agreements, items reported as child support.

Accounts or “Trade lines”Accounts or “Trade lines”

Lenders report which accounts & what type of account you have with them: Bank card, auto loan, mortgage, etc.

When it was opened Date of last activity Balance & account limit Payment history

Charge offs and past dues will be located here

Lenders report which accounts & what type of account you have with them: Bank card, auto loan, mortgage, etc.

When it was opened Date of last activity Balance & account limit Payment history

Charge offs and past dues will be located here

Public RecordsPublic Records

Credit reporting agencies also collect public record information from state and parish courts, and information on overdue debts from collection agencies: Bankruptcies Judgments Tax liens

Credit reporting agencies also collect public record information from state and parish courts, and information on overdue debts from collection agencies: Bankruptcies Judgments Tax liens

InquiriesInquiries

The inquiries section contains a list of everyone who accessed your credit report within the last two years: For applications for credit by you For periodic monitoring/review by companies where

you already have accounts For “pre-approval” offers from companies For employment purposes

The inquiries section contains a list of everyone who accessed your credit report within the last two years: For applications for credit by you For periodic monitoring/review by companies where

you already have accounts For “pre-approval” offers from companies For employment purposes

InquiriesInquiries

Two types External Internal

Internal inquiries do not appear on a lender’s copy of a credit report and do not affect the credit score.

Two types External Internal

Internal inquiries do not appear on a lender’s copy of a credit report and do not affect the credit score.

Additional InformationAdditional Information

Credit bureaus may also report information such as: Previous address Warning notifications Consumer statements

Credit bureaus may also report information such as: Previous address Warning notifications Consumer statements

Who can view my report?Who can view my report?

Anyone with what is considered a permissible purpose can look at your report. These companies, groups, and individuals can include: Potential lenders Landlords Insurance companies Employers and potential employers

Anyone with what is considered a permissible purpose can look at your report. These companies, groups, and individuals can include: Potential lenders Landlords Insurance companies Employers and potential employers

What is a credit score?What is a credit score?

A score is a snapshot of your credit risk at a particular point in time.

A credit score is a number lenders use to help them decide: “If I give this person a loan or credit card, how likely is it that I will get paid back on time?”

A score is a snapshot of your credit risk at a particular point in time.

A credit score is a number lenders use to help them decide: “If I give this person a loan or credit card, how likely is it that I will get paid back on time?”

What is a credit score?What is a credit score?

Credit bureau scores are often called “FICO scores”

FICO scores determine a person’s risk The higher the score the lower the risk

Each lender has its own strategy for determining an acceptable risk

Credit bureau scores are often called “FICO scores”

FICO scores determine a person’s risk The higher the score the lower the risk

Each lender has its own strategy for determining an acceptable risk

What makes up a credit score?What makes up a credit score?

There are five main categories of information that FICO scores evaluate:

Payment history (35 percent): bankruptcies, late payments, past due

accounts and wage attachments

What is your track record?

There are five main categories of information that FICO scores evaluate:

Payment history (35 percent): bankruptcies, late payments, past due

accounts and wage attachments

What is your track record?


Payment History

Tips for Raising your Score Pay your bills on time. If you have missed payments, get current and

stay current. Paying off a collection account, or closing an

account on which you previously missed a payment will not remove it from your credit report.

Payment History

Tips for Raising your Score Pay your bills on time. If you have missed payments, get current and

stay current. Paying off a collection account, or closing an

account on which you previously missed a payment will not remove it from your credit report.


Amount of credit owing (30 percent):Your score takes into account:

Whether you are showing a balance on certain types of accounts.

How many accounts have balances. How much of the total credit line is being used on

credit cards and other “revolving credit” accounts. Amount owed on all accounts, and on different

types of accounts.

How much is too much?

Amount of credit owing (30 percent):Your score takes into account:

Whether you are showing a balance on certain types of accounts.

How many accounts have balances. How much of the total credit line is being used on

credit cards and other “revolving credit” accounts. Amount owed on all accounts, and on different

types of accounts.

How much is too much?


Amount of Credit Owing

Tips for Raising your Score

Keep balances low on credit cards and other “revolving” credit.

Pay off debt rather than moving it around. Don’t close unused credit cards as a short-

term strategy to raise your score.

Amount of Credit Owing


Keep balances low on credit cards and other “revolving” credit.

Pay off debt rather than moving it around. Don’t close unused credit cards as a short-

term strategy to raise your score.


Length of Credit History (15 percent)

Time since accounts were opened Time since last account activity

How established is yours?

Length of Credit History (15 percent)

Time since accounts were opened Time since last account activity

How established is yours?


Length of Credit History


If you’ve been managing credit for a short time, don’t open a lot of new accounts too rapidly.



If you’ve been managing credit for a short time, don’t open a lot of new accounts too rapidly.


Search for and acquisition of new credit (10 percent):

number of recent credit inquiries number of recently opened accounts

Are you taking on more debt?

Search for and acquisition of new credit (10 percent):

number of recent credit inquiries number of recently opened accounts

Are you taking on more debt?


New Credit


Do rate shopping for an auto or mortgage loan within a focused period of time.

Re-establish your credit history if you have had problems.

New Credit


Do rate shopping for an auto or mortgage loan within a focused period of time.

Re-establish your credit history if you have had problems.


Types of credit in use (10 percent)

Type and number of various types of accounts (credit cards, retail accounts, mortgage)

Is it a “healthy” mix?

Types of credit in use (10 percent)

Type and number of various types of accounts (credit cards, retail accounts, mortgage)

Is it a “healthy” mix?


Types of credit in use


Apply for and open new credit accounts only as needed.

Have credit cards – but manage them responsibly.

Note that closing an account doesn’t make it go away.

Types of credit in use


Apply for and open new credit accounts only as needed.

Have credit cards – but manage them responsibly.

Note that closing an account doesn’t make it go away.


Payment History

35%

Amounts Owed30%


15%

New Credit10%

Type of Credit in

Use10%

Payment History

35%

Amounts Owed30%


15%

New Credit10%

Type of Credit in

Use10%

How the FICO score counts inquiries

How the FICO score counts inquiries

Inquiries don’t affect scores that much.Many kinds of inquiries aren’t counted

at all.The score looks for “rate shopping”.

Inquiries don’t affect scores that much.Many kinds of inquiries aren’t counted

at all.The score looks for “rate shopping”.

4 Primary Threats to your Credit Score

4 Primary Threats to your Credit Score

Late PaymentsHigh Credit Card BalancesDebt SettlementNo Credit Score

These are all areas YOU can control!

Late PaymentsHigh Credit Card BalancesDebt SettlementNo Credit Score

These are all areas YOU can control!

What if I am turned down for credit?

What if I am turned down for credit?

The Equal Credit Opportunity Act (ECOA) gives you the right to obtain the reasons why from the lender within 30 days.

You are also entitled to a free copy of your credit report within 60 days.

The Equal Credit Opportunity Act (ECOA) gives you the right to obtain the reasons why from the lender within 30 days.

You are also entitled to a free copy of your credit report within 60 days.

Review Your Credit FileReview Your Credit File

Review your credit report from each credit reporting agency at least once a year especially before making a large purchase:housecar

Review your credit report from each credit reporting agency at least once a year especially before making a large purchase:housecar

FREE Copy of your Credit Report

FREE Copy of your Credit Report

From all three major credit reporting agencies

Request by phone at 877-322-8228Or, go online (

www.annualcreditreport.com)Available once every 12 months

From all three major credit reporting agencies

Request by phone at 877-322-8228Or, go online (

www.annualcreditreport.com)Available once every 12 months

http://www.annualcreditreport.com/

http://www.annualcreditreport.com/

Info on the Three Credit Reporting Agencies

Info on the Three Credit Reporting Agencies

To request a copy, contact the credit reporting agencies directly:

Equifax: (800) 685-1111, www.equifax.com

Experian (formerly TRW): (888) 397-3742 www.experian.com

TransUnion: (800) 888-4213, www.transunion.com

To request a copy, contact the credit reporting agencies directly:

Equifax: (800) 685-1111, www.equifax.com

Experian (formerly TRW): (888) 397-3742 www.experian.com

TransUnion: (800) 888-4213, www.transunion.com

Top 5 Credit FAQs: #5Top 5 Credit FAQs: #5

“Should I subscribe to one of those $99 credit report monitoring services?”

You shouldn’t pay more than $10 for a copy of your personal credit report. Depending on where you live and your credit history, you may be able to get one free.

“Should I subscribe to one of those $99 credit report monitoring services?”

You shouldn’t pay more than $10 for a copy of your personal credit report. Depending on where you live and your credit history, you may be able to get one free.


“If my account is with a collection agency, should I try to negotiate with them or with the lender?”

Since the account has been passed on to the collection agency BY the lender, it would be better to work with the collection agency.

“If my account is with a collection agency, should I try to negotiate with them or with the lender?”

Since the account has been passed on to the collection agency BY the lender, it would be better to work with the collection agency.


“What is the Statute of Limitations on certain types of negative information that may be in my file?”

Judgment – Remains on file 7 years from the date filed.

Lien – Remains on file indefinitely if unpaid.

“What is the Statute of Limitations on certain types of negative information that may be in my file?”

Judgment – Remains on file 7 years from the date filed.

Lien – Remains on file indefinitely if unpaid.


Bankruptcy – Ch. 7 – Remains on file for 10 years from the date filed.

Ch. 11 – Remains on file for 10 years from the date filed.

Ch. 13 – Remains on file for 7 years if dismissed or discharged.

Bankruptcy – Ch. 7 – Remains on file for 10 years from the date filed.

Ch. 11 – Remains on file for 10 years from the date filed.

Ch. 13 – Remains on file for 7 years if dismissed or discharged.


Bankruptcy

Ch. 13 – Remains on file for 10 years if no disposition.

Bankruptcy

Ch. 13 – Remains on file for 10 years if no disposition.


“How can I get lenders to remove charge offs from my report?”

Charge off accounts remain on your report for 7 years. However, negotiating with the lender on paying the item in full is better than showing the item completely unpaid.

“How can I get lenders to remove charge offs from my report?”

Charge off accounts remain on your report for 7 years. However, negotiating with the lender on paying the item in full is better than showing the item completely unpaid.


“Will consumer credit counseling services help me get out of debt?”

They will negotiate with your creditors to arrange a repayment schedule and may be able to lower the interest rate on your credit cards. Using a credit counseling service can affect your credit rating because your creditors will note that your bills are not being paid according to the original credit terms.

“Will consumer credit counseling services help me get out of debt?”

They will negotiate with your creditors to arrange a repayment schedule and may be able to lower the interest rate on your credit cards. Using a credit counseling service can affect your credit rating because your creditors will note that your bills are not being paid according to the original credit terms.

Tips to Know Tips to Know

Put an entry “in dispute” through the CRA – lender has 30 days to respond.

“Opt out” of pre-screened offers – go to www.optoutprescreen.com or call 888-567-8688.

Put a “Fraud Alert” on your file for 90 days by calling any one of the 3 CRAs.

Put an entry “in dispute” through the CRA – lender has 30 days to respond.

“Opt out” of pre-screened offers – go to www.optoutprescreen.com or call 888-567-8688.

Put a “Fraud Alert” on your file for 90 days by calling any one of the 3 CRAs.

http://www.optoutprescreen.com/

http://www.optoutprescreen.com/

Tips to KnowTips to Know

Put a “Security Freeze” by calling each of the 3 CRAs. A freeze prohibits a CRA from releasing credit report without your authorization. $10 fee per CRA

(a La. Law)

Put a “Security Freeze” by calling each of the 3 CRAs. A freeze prohibits a CRA from releasing credit report without your authorization. $10 fee per CRA

(a La. Law)

Questions?Questions?

Thank you.Thank you.

Documents

Your Credit Report