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This presentation includes essential credit information needed when approaching a lender, including how to get lenders on your side, when to apply for loans and what common mistakes to avoid.
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WHAT IS THE TRUE COST OF CREDIT CARD
DEBT?
Total Balances : $40,000.00
APR (Interest rate): 15%
Monthly Payment: $800.00
Total Finance Charge: $23,164.59
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Total Cost: $63,164.59
TO AVOID NASTY SURPRISES !
SURPRISES
o Low Score
o Unknown accounts or information
o Forgotten accounts: vendors, cell phone, utilities
o Prior Late payments
o Judgments/ Liens
o Collection items: Delinquencies, Collection agencies
o Duplicate Items
CREDIT SCORE BASICS
Credit score: is a number used by banks, representing the creditworthiness, the likelihood that person will pay his or her debts.
The FICO Score is calculated from over 20 different factors that are grouped in five categories outlined below.
DO I HAVE A GOOD SCORE?
National average FICO credit score is 691
60% of people fall between approximately 650 and 799
37% of adults admit they do not know their score
Average credit score in Massachusetts is 677
CREDIT REPORT
Credit report: A compilation of personal, financial, and alternative information collected from various sources that a consumer has had a relationship with. These sources are typically creditors, lenders, utilities, debt collection agencies and the courts
You have the right to request a FREE Credit Report every 12 months:
Visit: www.annualcreditreport.com, orcall 1-877-322-8228
WHAT TO LOOK FOR ON YOUR CREDIT REPORT?
Personal information:
Verify accuracy of:
social security number
name
current and previous address
employer information
WHAT TO LOOK FOR ON YOUR CREDIT REPORT?
Collection or Delinquent accounts
Past due/ delinquent accounts
Charge-offs
Public items:
Judgment
Bankruptcy
Lien/Garnishment
WHAT TO LOOK FOR ON YOUR CREDIT REPORT?
Are the accounts updated properly?
Are the current account statuses accurate?
Are there any accounts reported more than once?
Are there any missing accounts ?
Are the payment history fields accurate ?
WHAT TO LOOK FOR ON YOUR CREDIT REPORT?
Utilization Ratio
Am I maxed with my cards ?
Is it below 50% ?
Which accounts should I lower the balances on?
Which account should I increase the limit on?
WHAT TO LOOK FOR ON YOUR CREDIT REPORT?
Inquiries
An inquiry is when a request is made to review your credit report.
A “soft inquiry” is when you request your own credit report. This does not affect your credit score.
A “hard inquiry” is when a third party makes a request for your credit report. This has a negative effect on your credit score, usually 2/3 points.
RECAP
Buy credit scores
Request credit reports
Verify the accuracy of the information
Payoff delinquent accounts
Improve Utilization
Stay away from “Hard Inquiries”
>>> SLIDE
CONTACT INFO
Joel Francois
Francois and Associates
500 West Cummings Park, Suite 2425
Woburn MA 01801
Tel 800-355-1082
www.mylocaldebtrelief.com
