Why Credit Unions Care Credit Unions Care Foundation

Why Credit Unions Care? • Credit Unions Care Foundation of Virginia – Help meet the social, moral and economic needs of Virginia communities – Focus on financial education – Cooperation among credit unions and local charities • Encourage you to check your credit report – for signs of identity theft – for errors – as a tool to help improve your credit and credit score

Objectives • • What’s a credit report The importance of reviewing your credit report How to pull your credit report How information in your credit report determines your credit score Ways to improve or build your credit How your information can be compromised How to protect your information What to do if you’re a victim of identity theft

What’s a Credit Report? • An ongoing “report card” that shows how well you have paid loans and other bills • Three Main Credit Bureaus keep these records – Equifax – Experian – Trans. Union • Credit reports from each bureau have different formats but contain similar information • Consider your opt-out options

What’s in your Credit Report? • Basic information – SSN, name, date of birth, address – Employment history – Alerts and consumer statements • Creditors and payment history • Public record information – Bankruptcies – Tax lien – Civil judgments • Inquiries – Loan/credit applications – Promotional prescreen credit solicitations – Account reviews by current creditors

How Long Data is on File • Positive lines - 10 years • Delinquent lines - 7 years • Collections - 7 years from date of last activity with the original credit grantor • Bankruptcies – Chapter 7 or 11 - 10 years from the date filed – Chapter 12 or 13 - 7 years from date filed if discharged, 10 years if open or dismissed • Judgments - 7 years (can be renewed) • Unpaid tax liens - indefinitely • Paid tax liens - 7 years from paid/released date

Reasons to check your Credit Report • Check for errors • See who’s been pulling your credit report • Help you build, strengthen, or repair your credit score • Look for warning signs of identity theft

Why it’s important Reporting Errors* • About 40 million Americans have mistakes on one of their credit reports • 1 in 4 had errors that might affect their score • 4 out of 5 consumers who filed a dispute had some modifications made to their report • 1 in 10 saw a change in their score after modifications Identity Theft** • 2011: 11. 6 million → 2013: 13. 1 million • Victims spend about $373 and 15 hours to resolve *Source: Federal Trade Commission Study 2004 -2013 **Source: Javelin Strategy & Research 2012 -2014 Identity Fraud Report

How to order your Credit Report • annualcreditreport. com – Get one free report from each of the three main credit-reporting agencies – From a secure server (preferably home) – May need access to personal financial files • Call 877 -322 -8228 • Mail request letter

Denied credit? • You’re entitled to a free copy of your credit file within 60 days of denial • Detailed instruction will come with your denial letter Equifax 800 -685 -1111 Trans. Union 800 -916 -8800 Experian 800 -583 -4080 www. equifax. com www. transunion. com www. experian. com

Being Proactive Laws protect you from reporting errors: – File a dispute with the credit bureau – Bureau has 30 days to investigate, notify you of results, and delete inaccurate information – Keep all records and notes – Send documents registered mail – Disagree? Write a statement for your file Requests for credit status changes – Explain circumstance (e. g. payment on a charged off account to ask for a more favorable reporting status)

Don’t confuse your “Credit Report” with your “Credit Score!”

What’s a Credit Score? • A number which predicts credit risk • Shows “How likely you are to repay a loan? ” • Many different scoring systems – FICO Score (My. FICO. com) – Vantage Score – Alternative Credit Score • Changes constantly

What’s in a number? Credit mix 10% New Credit 10% Length of credit history 15% Payment history 35% 30% Amounts owed

A Poor Score is bad for your bottom line Avg. 60 -month fixed rate auto loan for $18, 000 in VA as of 03/2016 FICO Score APR 720 -850 3. 39% $327 $1, 595 690 -719 4. 68 % $337 $2, 223 660 -689 6. 84% $355 $3, 304 620 -659 9. 76% $380 $4, 824 590 -619 13. 68% $416 $6, 953 500 -589 14. 15% $420 $7, 219 Source – myfico. com Mthly Payment Finance Charge

Impact of a Poor Score • • • Housing choices Ability to obtain utilities Ability to get a loan Cell phone choices Car insurance rates

It might even affect your career • In 2003 35% of employers checked credit reports • In 2010 60% of employers checked credit reports -CNNMoney. com, July 22, 2010: Survey by Society of Human Resource Management What matters most? • • • Judgments Collections Bankruptcy High Debt Foreclosures 64% 49% 25% 18% 11%

Build a strong Credit Score • Pay all bills on time – Set up bill pay to help • • • Watch your utilization ratio Don’t close all old accounts Don’t open a flurry of new accounts Be a cautious co-signor Read new banking/credit card disclosures Pay your library fines!

Improve your Credit Score • Look for and correct errors • Contact lenders o negotiate debt and arrange a payment plan o request a status change • Pay all bills on time • Pay down debt o consider consolidation o develop a budget • Apply for secured credit card; pay on time • Establish emergency fund

Warning signs of Identity Theft • • • Unidentified accounts on your credit report Unidentified transactions on existing accounts Calls about past due bills that aren’t yours Change in frequency of mail Medical bills/insurance claims you don’t recognize IRS notifies you that more than one tax return was filed in your name, or you have income you don’t recognize • You were involved in a data breach

How your information is compromised • • Lost/stolen wallets Mailbox/trash theft Pretending to be a potential employer/landlord Business record theft – Hacking corporate database – Employee theft – Skimming • • • Hacking your home computer Using a cell phone camera to capture information Fake ATM Public Wi-Fi Phishing/pharming messages

Take Precautions • Protect your information – in public – at home – online – on your smart phone – on social media

Is Credit Monitoring Right for you? • Typically provides you a copy of your credit report and updates if there are changes – New accounts – New inquiries – Major changes like address or employer • Fees range from $10 to $20 a month

DIY Credit Monitoring • Stagger pulling your three free credit reports, for example: – January: Experian – May: Equifax – September: Trans. Union • Careful. Not foolproof!

Consider a “Freeze” • Blocks access to your credit report by third parties who are not exempt under law • Fee charged by each credit bureau • Free if victim of ID Theft • Caution: Credit freeze laws change per state

If you’re an ID Theft victim • Close affected accounts • File an “ID theft affidavit” with the FTC – 1 -877 -438 -4338 – www. consumer. ftc. gov • File a police report where ID theft took place • Send copies to creditors - use certified mail return receipt requested, keep copies for your files • Place fraud alert on your credit report • Notify Social Security Administration and IRS • Reset passwords/PINs

Trouble understanding your Credit Report? We can help! • Education and resources • Meet with a Credit Union representative to: – Review your Credit Report – Determine ways you can improve your credit score – Look for ways to save you money!

Keep Checking • Remember, it is important to continue to monitor your credit report • You are entitled to one free report annually from each of the 3 bureaus • Pull children’s credit report too • Be sure you are on your credit union’s e-mail list for “pull your credit report” reminders • Be vigilant and protect your information

More Resources Federal Trade Commission ftc. gov 1 -877 -438 -4338 “Big 3” Fraud Unit Equifax 888 -766 -0008 Experian 888 -397 -3742 Trans. Union 800 -680 -7289 Internal Revenue Service irs. gov 1 -800 -829 -1040 On. Guard Online onguardonline. gov Consumers Union consumersunion. org Attorney General of Virginia oag. state. va. us Privacy Rights Clearinghouse privacyrights. org

We’re here for you www. yourwebaddress. org (XXX) XXX-XXXX For more information on the Credit Unions Care Foundation or to make a donation, see: www. creditunionscarefoundation. org

This credit union is federally-insured by the National Credit Union Administration. "We Do Business in Accordance With the Federal Fair Housing Law and the Equal Credit Opportunity Act. " This seminar is intended to provide general information and should not be construed as specific legal, insurance or tax advice. Individual circumstances and current events are critical to sound planning; anyone wishing to act on the seminar material should consult with his or her Financial Advisor. Information subject to change without notice. All rights reserved, no part of this seminar may be reproduced or used in any manner whatsoever without written permission from Credit Unions Care Foundation of Virginia.