Credit and Credit Reports

1. Credit and Credit Reports Heather Greenwood Virginia Cooperative Extension Fauquier County Office

2. Topics of the day • What is credit? • What is a credit report? • What is in my credit report? • Correcting credit report errors • Improving credit reports

3. What is credit? • Purchase now and pay over time • Legal contract • Repay principal and interest • Is it really someone else’s money you are borrowing?

4. What is a credit report? • Record of: • credit repayment • total debt • Does not include: • race • religion • political preference • criminal record unrelated to credit • medical history

5. What’s in my credit report? • Identifying information • current / previous addresses, phone number , SSN, birth date, employer • Credit information • all accounts, payment history, loan balance/limit • Public record information • bankruptcy, foreclosure, tax liens, judgements • Inquiries

6. Ordering a Credit Report • Equifax • 800-685-1111 • www.equifax.com • Experian • 888-EXPERIAN • www. experian.com • Transunion • 800-916-8800 • www.transunion.com

7. Understanding Your Credit Report • Read information that accompanies the credit report • Visit credit report website • Call credit reporting agency • Enroll in the Virginia Cooperative Extension’s Financial Mentor program • Ask a loan officer

8. Credit Scores • Used to predict the likelihood of repayment • Score is computer-assigned • Creditors use this as one tool in determining if you will receive a loan • What is a good score? • How can I improve my credit score?

9. Common Errors • Someone else’s information is on your report • Closed account still indicates it is open • Accounts you did not open are listed • Old information has not been deleted

10. Correcting Errors • Follow instructions included with the credit report • Credit bureau will investigate • Within 30 days, the bureau must find the information to be correct or incorrect • Correct, information will remain • Incorrect, information is removed

11. Correcting Errors • Credit bureau may request additional information • canceled check, payment information, letter from creditor • Contact creditor directly • 100 word explanation if information is correct but has extenuating circumstances

12. Improving Credit • Develop a budget for all household expenses • Pay bills on time every month • Use a bill calendar • Make arrangements if you are out of town • Automatic payments from checking account (MUST track carefully)

13. Improving Credit (cont.) • Pay loans first • Pay off credit cards every month (credit cards are loans) • Pay more than minimum due • Do not max the credit limit • Only apply for credit you need • Choose a low interest / no annual fee card

14. Improving Credit (cont.) • Use credit card to establish good credit • Reduce expenses and increase income • Keep track of bills and past-due notices • Shred ALL credit card offers as soon as they arrive

15. HELP!!! I can’t pay the bills... • Call creditors IMMEDIATELY!!! • Contact Virginia Cooperative Extension • Financial Mentor Program • Contact a consumer credit counseling agency • Stay away from “credit-repair” companies

16. How long will this stay on my report? • Bankruptcy • 7-10 years • Foreclosure • 7 years • Late payments • 2-7 years • Judgements • 7 years • Collection accounts • 2-7 years • Repossession • 7 years • Unpaid delinquent accounts • indefinitely

17. Non-traditional Credit Report • Copies of bills / cancelled checks • Landlord / utility letter indicating timely payment history • Keep track for at least 2 years • Consider a low balance credit card • If married, have accounts in own name

18. Questions? For more information, contact: Heather Greenwood Virginia Cooperative Extension 540-341-7950 ext. 13 hgreenwo@vt.edu