Building Your Credit Partners In Community Building Inc

Building Your Credit Partners In Community Building, Inc 2018

PICB - Credit Building Components of a credit score

PICB - Credit Building Improving your credit score • Just like losing weight, raising your credit score takes time and there is no quick fix

PICB - Credit Building Payment history tips • Pay your bills on time ▫ After 12 months this will be a good line of credit • Get current and stay current on payments ▫ If you cannot pay on time, try to make the minimum balance prior to the 30 -days notice • Contact your creditors or see a credit counselor

PICB - Credit Building Amounts owed tips • Keep balances low on credit cards and other “revolving credit” • Pay off debt instead of moving it around • Don’t close unused credit cards • Don’t open several new credit cards that you don’t need

PICB - Credit Building Length of credit history tips • Don’t open a lot of new accounts too rapidly ▫ New accounts lower your average account age • Avoid closing a lot of old accounts ▫ Keep your oldest accounts open • If you are a new credit user, rapid account buildup can look risky ▫ Avoid applying for credit to get a free T-shirt or for a discount on an item you want to buy

PICB - Credit Building New credit tips • Do interest rate shopping for a given loan within a focused amount of time • Open new accounts responsibly and pay them off on time • Request and check your own credit report ▫ Order directly from the credit reporting agency or an organization authorized to provide credit reports to consumers ▫ www. annualcreditreport. com or 877. 322. 8228 ▫ Great information about your credit accounts and history, but no credit score included.

PICB - Credit Building Types of credit use • Apply for and open new credit accounts only as needed • Use credit cards and loans responsibly • Keep in mind that closed accounts will still show up on your credit report • Understand how to read your credit card statement

PICB - Credit Building Fixing errors • Check your credit report annually • If you find errors on your credit report, take action ASAP • Errors are potentially very damaging to your credit score

PICB - Credit Building Disputing your credit report • You have the right to dispute information on your credit report. ▫ Can be done online or in writing • An investigation will occur and you will receive a Result of Investigation Letter that explains the credit bureau findings. ▫ Could result in deletion of inaccurate information

PICB - Credit Building Common errors • Is your personal identification information correct? • Did something appear more than once? • Did someone look at your credit report without your permission? • Is an inquiry shown on your report for more than two years? • Is a bankruptcy listed more than 10 years old?

PICB - Credit Building Steps to correcting errors • • Copy your credit report Highlight the error Write a letter that explains the error Copy additional information to support your claim • Send all of the above to the credit bureau

PICB - Credit Building Resolving negative debt on a credit report • Pay off in full • Arrange schedule • Offer settlement amount for payment in full (approximately 40 -75% for older debt)

PICB - Credit Building Paying off in full • Send cashier’s check or certified money order ▫ In the memo section write “for payment in full” and the account number • Keep a record of the names/phone numbers of people you speak with • Have creditor send you a letter stating the account is paid off in full • Request a receipt that shows a zero balance • Send copies of receipt and letter to all three credit bureaus ▫ Ask each bureau to update the accounts to show paid in full

PICB - Credit Building Arranging payment schedule • Contact the company by phone or mail • Find out if they would accept monthly payments • Keep records of the names/phone numbers of people you speak with • Keep copies of payments you send in • After several months offer a settlement amount as payment in full • Update bureaus when account is paid in full

PICB - Credit Building Offer a settlement amount • Estimate 40 -75% of debt • Two options: ▫ Contact company by telephone ▫ Contact company by mail

PICB - Credit Building Option 1: Contact by telephone • Before you call: ▫ Have the money on hand to send immediately after negotiating a deal ▫ Know your target amount you want to pay, offer less, and plan to negotiate ▫ Do not agree to pay more than you can afford • Explain that you are interested in paying account off • Negotiate a settlement and pay by date agreed • Keep records

PICB - Credit Building Option 2: Contact by mail • Send the company a letter with the certified funds attached ▫ Write account number and paid in full in the memo section • Letter should say you are sending the amount as payment in full • Keep copy of certified funds and copy of letter • Request a letter be sent stating account was paid off • Send copies to all three bureaus

PICB - Credit Building Understanding bankruptcy • Bankruptcy is a last resort ▫ Cannot clean up a bad credit record ▫ Stays on your credit report for up to 10 years ▫ Typically does not eliminate child support, alimony, fines, past-due taxes, and student loans • Before considering bankruptcy, talk to a financial coach / counselor

PICB - Credit Building Types of bankruptcy • Chapter 7 ▫ Wipes out allowable debts and provides certain personal-property exemptions ▫ Debtor gives up all property unless the state finds that the debtor needs it to support his or her dependents • Chapter 13 ▫ Court-approved repayment plan ▫ Debtor keeps all property and makes regular payments on debt after filing for bankruptcy

PICB - Credit Building Long-term effects of bankruptcy • Could determine whether or not you get the job you want • Insurance rates may increase • May be difficult to rent an apartment or qualify for a home loan • Bankruptcies stay on your report for 10 years

PICB - Credit Building Alternatives to bankruptcy • Before filing bankruptcy, try the following strategies: ▫ Reduce spending ▫ Negotiate a payment plan with your creditors ▫ Work with your credit counselor to create a debt repayment plan ▫ Consider debt consolidation-analyze risks and consequences of this action first

PICB - Credit Building Obtaining help • Talk to your financial coach ▫ They can help you negotiate with creditors or set up a spending plan • Learn more by visiting the following websites: ▫ Federal Trade Commission (www. ftc. gov) ▫ National Consumer Law Center (www. NCLC. org) • Don’t be fooled by ads that claim they can erase bad credit! ▫ If it sounds too good to be true, it probably is

PICB - Credit Building Resources • http: //www. federalreserve. gov/creditreports/ • https: //dispute. transunion. com/dp/dispute/lan ding. Page. jsp • https: //www. ai. equifax. com/Credit. Investigation /home. action

PICB - Credit Building For more information and to make an appointment contact; Partners In Community Building, Inc. 1325 S. Wabash Ave. Suite 206 Chicago, IL 60605 312. 328. 0873 312. 328. 0879 (f) www. picbchicago. org Monday – Friday 9: 00 AM – 5: 00 PM