Credit Scores and Credit Reports How the System

Credit Scores and Credit Reports – How the System Really Works, What You Can Do Sue Woodard – Mortgage Market Guide with Credit Expert Evan Hendricks

Evan Hendricks • Author of Credit Scores and Credit Reports – How the System Really Works, What You Can Do • Regular Presenter at Federal Trade Commission Trade Workshops • Qualified at Federal and State Levels as Expert on Identity Theft Court Cases

Credit Score Model • Scores are Somewhat Counter Intuitive • 30% Based on Balance to Limits – Individually and Cumulatively – Balances Normally Reported Month End • Closing Accounts Could Hurt Scores • Recent Negative Information Damaging – Paying Off Five Year Old Charge Off Becomes Recent and Could Damage Credit Rating

What Can Consumers Do? • Difficult To Get Permanent Removal of Info • Keep Balances Low to Limits • Some Credit Issuers Don’t Issue Limits – Dispute All Bureaus to Get Issuer to Report • Monthly Accounts Like American Express Will Demonstrate High Balance Over Time • Review Personal Credit Reports Regularly

Annual Credit Reports • New Federal Law Provides for Annual Credit Reports – www. annualcreditreports. com – Available Annually, Quarterly • Unlike Fee Based “Free” Credit Report Services • Mortgage Professional Can Supply Credit Reports for Review

Rapid Re-Score • Independent Credit Re-Sellers Can Provide Updated Scores Based on Corrected Information • Most Re-Sellers Part of NCRA or National Credit Reporting Association www. ncra. org • Potential Increases of 20 -100 Points • Cost Ranges From $75 to Several Hundred Dollars Based on Trade Lines Involved

Credit Repair Companies • Veracity Credit – Denver • Credit Resource Corp. – L. A. • Companies Specialize in Removal • Fees Vary – Set Up Fees plus Monthly Maintenance Fees

Credit Repair Tactics • Disputes Must Be Answered Within 30 Days – “Bombardment” Method Sometimes Yields Results • If Accounts Shown as Disputed – Removed From Score Models Till Resolved • Credit Grantors Can Provide Quicker Response Than Credit Reporting Agencies • Always Get Name, Extension, Expected Date of Reported Change, Request Faxed & Signed Acknowledgement

Identity Theft • Fastest Growing White Color Crime • Can Drive Score From 700+ to 580 • Time Consuming To Resolve • Costs Incurred Can Be Extensive

What’s a Consumer To Do • Check Report Regularly • Be Aware of Inquires From Out of Area • Credit History Shows Incorrect Accounts, Collections, Charge-Offs • Dispute With Grantor Immediately – Resolve Your New Part-time Job – File Fraud Alert, Police Report or Fraud Affidavit – Put Account Name and Account Number On It

It May Not Be Over Yet • Consumer May Have To File Suit • www. naca. net National Association of Consumer Advocates • Use for Recovery of Attorney’s Fees if Needed To Right Report

What About Inquiries? • You Can Shop for 45 Days With a Hard Inquiry, Mortgage Auto, etc. • Inquiries Pulled From Consumer Do Not Count Against Them

Who Else Wants to Know Your Score? • Employers View Credit Reports as Inexpensive Background Checks • Insurance Industry – If Under Financial Stress You May Be More Prone to Cause Loss For Insurance Company – Increase Rates • Mortgage Insurance Premiums Can Be Impacted by Scores, Positively or Negatively

Invest In Your Clients • Direct Clients to Free Site for Annual Review • www. annualcreditreport. com • Everyone Entitled to Free Report By September 1, 2005 • Site Contains Valuable Information for Client Mailings

Credit Scores and Credit Reports – How the System Really Works, What You Can Do • Second Edition Benefits – Includes Information on Companies Not Reporting Total Information • One Credit Bureau Doesn’t Always Report Total Information • Updated Identity Theft and Credit Repair Chapter Information • Includes Information on Good Credit Repair Companies

How To Get Book • Discounted Price For Case Purchase – Save $250. 60 per Case of 28 Books • Evan@privacytimes. com • www. privacytimes. com • Phone: 301 -229 -7002