Understanding Your Credit and Credit Score By Money
Understanding Your Credit and Credit Score By Money Smart Week of El Paso Partners
Who is Fair ISACC?
Bill Fair – Engineer Earl Isaac - Mathematician
What is a Credit Score? A number that summarizes your credit risk, based on a snapshot of your credit report at a particular point in time.
Why are FICO scores important? Helps us get loans faster Credit decisions are fair Other credit problems count for less
How fast does your FICO score change?
Your score changes whenever your credit report changes Bankruptcy can affect your score Late payments Paying on time
What does a FICO score consider?
Payment History Pay Your Bills on time Get current and stay current Be aware of collection accounts Contact your creditor if you are having trouble making your payments
Amounts Owed Keep balances low on credit cards and other revolving debt Pay off debt rather than moving it around Don’t close unused credit cards Don’t open a number of new credit cards Avoid credit repair agencies that charge a fee for their services
Length of Credit History New accounts will lower your average account age, which will have a larger effect on your FICO score. Longer credit history will increase your FICO score
New Credit Do your rate shopping within a short period of time Be careful about opening new accounts that you don’t need Re-establish your credit history if you have had problems It’s okay to check your own credit report and FICO score
Types of Credit in Use Apply for and open new credit accounts only as needed Have credit cards – but manage them responsibly Closing an account doesn’t make it go away
Credit Report A credit report tells creditors the following: Who you are How much debt you have Whether you have made payments on time Whethere is negative information about you in public records How many inquires are listed in your credit report
Free Annual Credit Report Visit: www. annualcreditreport. com Call: 1 -877 -322 -8228 Mail Annual Credit Report Request Service P. O. Box 105281 Atlanta, Georgia 30348 -5281
Credit Reporting Agencies Equifax – (800) 685 -1111 www. equifax. com Experian – (888) 397 -3742 www. experian. com Trans. Union – (800) 888 -4213 www. transunion. com
Turned Down For Credit The Equal Credit Opportunity Act (ECOA) gives you the right to obtain the reasons why you were declined credit. You have 60 days to request a copy of the report from the three credit reporting bureaus.
Reasons for Denial Bad Credit History (Delinquent credit obligations) Do not meet income or residence requirements Too many inquiries Public records Credit Utilization Too many credit cards Limited credit history
Checking Your FICO Score FICO scores can be checked online, although in most cases there will be a charge to obtain
Checking Your Credit Report Review your credit report on a yearly basis Review your credit report from each of the credit reporting agencies
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