Understanding Your Credit Score

Save this PDF as:
 WORD  PNG  TXT  JPG

Size: px
Start display at page:

Download "Understanding Your Credit Score"

Transcription

1 Understanding Your Credit Score

2 Whether or not you re aware of it, your credit score (or lack thereof) plays a significant role in your financial well being. Build a great score and you ll enjoy the rewards that come with it. But let it slip, and you may be punished by it for years. Despite their significance, credit scores remain a mystery to most, but they don t have to be. What s a credit score? Simply put, a credit score is a numeric measure of how well you ve managed your credit obligations (debt) over time. It was designed for use in loan decisions, but it now has implications in many areas, including: Insurance (Auto, Home, Life, etc.) Your credit score may be a factor in the calculation of your insurance premium. Utilities (Gas, Water, Electricity, Cellular, etc.) Without a good credit score, you may be subject to a higher security deposit, which will need to be paid prior to getting your utilities connected. Employment Many employers now incorporate your credit score or profile to determine your eligibility for employment. Special Financing Offers Without a good credit score, you will not likely be able to qualify for special offers such as no interest/no payments until that you see advertised on television. There are hundreds of variations or types of credit scores, which doesn t make understanding them any easier. But all credit score calculations award points for good behavior, and subtract points for bad behavior so the higher the score, the better. For the sake of example, we ll examine the most widely used credit score type in the United States the FICO score. What s a FICO score? Although the exact formula for calculating the FICO score is secret, Fair Isaac (the developer of the FICO score) has disclosed the following components and the weight of their impact to the score: Payment History 35% Late payments on bills, such as a mortgage, credit card or automobile loan, will cause your FICO score to drop. The more late payments, and the longer they are past due (30, 60, 90 days), the more your score will suffer. Conversely, bills paid on time will improve your FICO score.

3 How a FICO Score breaks down 35% Payment History 30% Amounts Owed vs. Credit Available 15% Length of Credit 10% New Credit 10% Types of Credit Used Different Types of Credit: 15% LENGTH OF CREDIT 30% AMOUNTS OWED VS CREDIT AVAILABLE 10% NEW CREDIT 35% PAYMENT HISTORY 10% TYPES OF CREDIT USED Non-Revolving Credit - This is also known as an installment agreement. This type of account requires you to pay a fixed monthly amount (or more), until the principal is paid off in full at which point the account is closed. Mortgage, auto and student loans are examples of non-revolving credit lines. Revolving Credit - Monthly payments on revolving lines of credit, such as credit and department store cards. Payments fluctuate based on how much credit you have used and how much you choose to pay off each month. Secured Credit - Refers to loans secured by an asset, such as your home or car. Unsecured Credit - Unsecured credit does not involve collateral. This type of debt typically refers to credit and retail cards. Amounts Owed vs. Credit Available 30% Keeping a low ratio of current revolving debt (such as credit card balances) to your total available revolving credit or credit limit will increase your score. For example, if you have a combined credit card limit of $10,000 and you have only $2,000 in balances that s a credit utilization ratio of 20%, and would be considered a good and reasonable ratio. By contrast, if you have a combined credit card limit of $10,000 and you have $9,500 in balances that s a credit utilization ratio of 95%, and your score would be negatively impacted by it. The most obvious way to improve this aspect of your FICO score is by paying off debt and lowering your credit utilization ratio. Alternatively, receiving a credit limit increase may also drive down your utilization ratio (in the example shown above, if your limit was raised to $15,000 your utilization ratio would drop in both scenarios, demonstrating that you use revolving credit reasonably). Many experts believe a 20-30% credit utilization ratio is best. While opening new lines of credit may have a positive overall effect, opening too many have a negative impact. The closing of existing revolving accounts will typically adversely affect this ratio and therefore have a negative impact on a FICO score. This is a common mistake that many people who are trying to improve their score make. Even worse, if it is an old account being closed, you will be reducing your length of credit.

4 Length of Credit 15% As your credit history ages it can have a positive impact on your FICO score. A credit card that you have used reasonably for many years, or a car loan that you ve demonstrated on-time payments with for several years will make a positive impact. If all of your credit is newer, it is not seasoned enough to make a positive impact since you haven t yet demonstrated a history of on-time payments and/or reasonable utilization. Your FICO score will likely increase as the average age of your credit increases. New Credit 10% Hard credit inquiries, which occur when you apply for a credit card or loan (revolving or otherwise), can hurt your score, especially if done in great numbers; often three to five points per inquiry. If you re rate shopping for a mortgage or auto loan over a short period you ll not likely experience a large decrease in your score as a result of these types of inquiries. Automated computer algorithms attempt to detect when you re rate shopping (and not attempting to receive many new lines of credit), and they treat all of those hard inquiries as one. While all credit inquiries are recorded and displayed on your personal credit reports for two years, their impact decreases at the six-month and one-year mark, rendering them insignificant after a year. Credit inquiries originated by you (such as pulling a credit report for personal use), an employer (for employee verification) or by companies initiating prescreened offers of credit or insurance do not have any impact on a credit score. These are called soft inquiries or soft pulls, and do not appear on a credit report used by lenders. Types of Credit Used 10% You can benefit from having a history of managing different types of credit - installment, revolving, consumer finance, mortgage, etc. A diverse credit history (with on-time payments) shows that you can manage different types of obligations responsibly. What does my score tell someone about me? Simply put, your score tells a lender or other service provider what kind of a risk they are taking by lending money or extending services to you. When your score is high, it can be assumed by a lender that you are a low-risk borrower. You have paid your loans satisfactorily in the past and your current loans and lines of credit are being managed responsibly; there is no reason to think that the trend will not continue. As a result, you can expect higher dollar loans at lower interest rates. When your score is low, a lender may see you as a higher risk because you maintain higher balances on your credit lines, you have made late payments in the past, or you have failed to adhere to contractual guidelines on previous loans. As a result, you can expect to be offered a lower amount at a higher interest rate. And, you will not likely qualify for the best rates or terms you see advertised.

5 How can I ensure that I always get the best rates and deals possible? A few tips to maintain good credit or improve your score: 1. Always make on-time payments to current loans and credit card balances. Consider setting up automatic payments using Bill Pay, or by providing your credit card or debit card number to service providers who bill you on an ongoing basis. 2. Reduce the amount of debt you owe. You can pay your debt down more quickly if it is at the lowest interest rates available. If you already have a strong score, determine whether or not there are any opportunities for you to refinance some debt at a lower interest rate. 3. Try to maintain a good ratio of the amount borrowed versus the limit on revolving credit lines. When the percentage of amount owed is 70% or higher, lenders may see you as using your revolving lines as an extension of your income or not living within your means. 4. Do not apply for credit too often. Several inquiries in a short period of time can lower your credit score. Be aware of soft pulls and hard pulls on your credit and do not be afraid to ask the person conducting the credit review how this will affect you. 5. Have a variety of credit included in your profile. How often should I check my credit score or credit report? To maintain an ongoing knowledge of your credit report and score, you should review both on at least an annual basis, and as often as quarterly. And once you understand how the score works, you should not be surprised by yours. If you are, take a closer look at your credit report to ensure that it s accurate and that it doesn t include erroneous information. According to a recent study completed by the Federal Trade Commission, as many as 5% of us have an error on our credit reports that is significant enough to be of financial impact. As an Arizona Federal member, you can access your credit report and score online anytime with IDProtect, a comprehensive identity theft protection service that s included (at no additional charge) as a benefit of membership.

6 Confused? Overwhelmed? Don t be! Stop by any ServUs Center location or call us at (602) to make an appointment for a complimentary credit consultation. A Financial Expert will review your credit report and score with you and help identify actions you can take to improve your score. Have you set up your protection? Identity protection comes with your membership. While at any ServUs Center location, ask a Financial Expert to help you set up and use IDProtect. Or, call us at (602) and we ll be happy to walk you through it over the phone or set up an appointment for you at one of our locations. IDProtect is just one of the many services included in your membership. ArizonaFederal.org (602)

Loan Lessons. The Low-Down on Loans, Interest and Keeping Your Head Above Water. Course Objectives Learn About:

Loan Lessons. The Low-Down on Loans, Interest and Keeping Your Head Above Water. Course Objectives Learn About: usbank.com/student financialgenius.usbank.com Course Objectives Learn About: Different Types of Loans How to Qualify for a Loan Different Types of Interest Loan Lessons The Low-Down on Loans, Interest

More information

Loan Lessons. The Low-Down on Loans, Interest and Keeping Your Head Above Water. Course Objectives Learn About:

Loan Lessons. The Low-Down on Loans, Interest and Keeping Your Head Above Water. Course Objectives Learn About: Loan Lessons Course Objectives Learn About: Different Types of Loans How to Qualify for a Loan Different Types of Interest The Low-Down on Loans, Interest and Keeping Your Head Above Water usbank.com/financialeducation

More information

IMPROVE YOUR CREDIT SCORE. Effective Credit Management At Your Fingertips

IMPROVE YOUR CREDIT SCORE. Effective Credit Management At Your Fingertips IMPROVE YOUR CREDIT SCORE Effective Credit Management At Your Fingertips Introduction In this ebook, you will get valuable information including: What is a credit score The score breakdown Managing your

More information

CREDIT BASICS About your credit score

CREDIT BASICS About your credit score CREDIT BASICS About your credit score Your credit score influences the credit that s available to you and the terms (interest rate, etc.) that lenders offer you. It s a vital part of your credit health.

More information

Credit Scoring and Wealth

Credit Scoring and Wealth the Problem In most games, it is wise to understand the rules before you begin to play. What if you weren t aware that you were playing a game? What if you had not choice whether to play or not? Everyone

More information

Money Math for Teens. Credit Score

Money Math for Teens. Credit Score Money Math for Teens This Money Math for Teens lesson is part of a series created by Generation Money, a multimedia financial literacy initiative of the FINRA Investor Education Foundation, Channel One

More information

$uccessful Start and the Office of Student Services Present: THE WINNING SCORE

$uccessful Start and the Office of Student Services Present: THE WINNING SCORE $uccessful Start and the Office of Student Services Present: THE WINNING SCORE QUESTIONS TO BE ANSWERED How is a credit score calculated? Why is a credit score important? How can I improve my credit score?

More information

Understanding Credit Reports

Understanding Credit Reports Understanding Credit Reports What is a Credit Report and Score? Your success in managing credit is reflected in your credit report and score. A credit report is a history of everything you are doing with

More information

The Truth About Credit Repair

The Truth About Credit Repair The Truth About Credit Repair Discover The Insider Secrets Of How The Credit System Really Works and How To Beat The Credit Bureaus At Their Own Game. David Shapiro Esq. Applied Credit Repair Solutions

More information

Credit Score Management Seminar. Manage, protect and improve your Credit Score!

Credit Score Management Seminar. Manage, protect and improve your Credit Score! Credit Score Management Seminar Manage, protect and improve your Credit Score! Overview What is a Credit Score How Lenders Use Your Credit Score How Your Credit Score Impacts You What Makes Up Your Credit

More information

Understanding your Credit Score

Understanding your Credit Score Understanding your Credit Score Understanding Your Credit Score Fair, Isaac and Co. is the San Rafael, California Company founded in 1956 by Bill Fair and Earl Isaac. They pioneered the field of credit

More information

Understanding Credit BY Sallie Mae and FICO

Understanding Credit BY Sallie Mae and FICO Understanding Credit BY Sallie Mae and FICO Lisa Mitchell, Sallie Mae Brad Riebel, Sallie Mae April 2015 Session Focus Overview FICO and Sallie Mae partnership on ways to help students understand why credit

More information

Reason Statement Full Description Actions You Can Take or Keep this in mind

Reason Statement Full Description Actions You Can Take or Keep this in mind Factors Guide - Experian The consumer-friendly reason descriptions and actions a consumer can take (or things to keep ) below are provided for use within your FICO Open Access customer displays. The table

More information

FICO Score Factors Guide

FICO Score Factors Guide Key score factors explain the top factors that affected your FICO Score. The order in which your FICO Score factors are listed is important. The first indicates the area that most affected your FICO Score

More information

Check Your Credit First

Check Your Credit First I hear the same thing from many aspiring first time home owners: they would LOVE to buy a home, but they have difficulty in getting approved for financing. There are 3 key items banks are looking at when

More information

Keys to Your Financial Future Step 2.5: Credit Repair or Building Plan

Keys to Your Financial Future Step 2.5: Credit Repair or Building Plan 46 MODULE 2: Good credit Keys to Your Financial Future Step 2.5: Credit Repair or Building Plan Use the questions to develop your credit repair or building plan. Do you need to repair your credit history?

More information

How do I get good credit?

How do I get good credit? Slide 1 Credit The information provided in this e-course is intended for educational purposes only and does not constitute specific advice for you as an individual. When evaluating your particular needs,

More information

FICO Score Factors Guide - TransUnion

FICO Score Factors Guide - TransUnion Factors Guide - TransUnion The consumer-friendly reason descriptions and things to keep in mind below are provided for use within FICO Open Access customer displays. The table includes a reason description

More information

Fun, engaging and effective. Aligned with national financial education and core curriculum requirements.

Fun, engaging and effective. Aligned with national financial education and core curriculum requirements. Building Your Financial Foundation Adult Level Curriculum - Instructors Guide Fun, engaging and effective. Aligned with national financial education and core curriculum requirements. Lessons on: Credit

More information

When & Where CREDIT. to Apply for. How to Know. Discover when your credit is good enough to get approved FIX YOUR CREDIT YOURSELF HOW TO

When & Where CREDIT. to Apply for. How to Know. Discover when your credit is good enough to get approved FIX YOUR CREDIT YOURSELF HOW TO HOW TO FIX YOUR CREDIT YOURSELF (without an attorney) How to Know When & Where to Apply for CREDIT Discover when your credit is good enough to get approved Introduction Now that you ve been through the

More information

Using Credit to Your Advantage Credit Cards and Loans Participant Guide

Using Credit to Your Advantage Credit Cards and Loans Participant Guide Hands on Banking Using Credit to Your Advantage The Hands on Banking program is a free public service provided by Wells Fargo. You may also access the program anytime at www.handsonbanking.org & www.elfuturoentusmanos.org

More information

Managing Your Credit Report and Scores. Apprisen. 800.355.2227 www.apprisen.com

Managing Your Credit Report and Scores. Apprisen. 800.355.2227 www.apprisen.com Managing Your Credit Report and Scores Apprisen 800.355.2227 www.apprisen.com Managing Your Credit Report and Scores Your credit score is one of the most important aspects of your personal finances. From

More information

About credit reports. Credit Reporting Agencies. Creating Your Credit Report

About credit reports. Credit Reporting Agencies. Creating Your Credit Report About credit reports Credit Reporting Agencies Credit reporting agencies maintain files on millions of borrowers. Lenders making credit decisions buy credit reports on their prospects, applicants and customers

More information

MAKE THE MOST OF YOUR CREDIT SCORE

MAKE THE MOST OF YOUR CREDIT SCORE MAKE THE MOST OF YOUR CREDIT SCORE A free publication provided by Consolidated Credit Counseling Services of Canada, Inc., a registered charitable credit counselling and debt management organization. Consolidated

More information

How to Improve and Maintain your Credit Score

How to Improve and Maintain your Credit Score How to Improve and Maintain your Credit Score Special points of interest: Factors that influence your credit score How your credit score is calculated Improving your credit score How to fix flawed credit

More information

Using Credit to Your Advantage

Using Credit to Your Advantage Hands on Banking Using Credit to Your Advantage Credit Reports, Credit Scores and Dealing with Debt The Hands on Banking program is a free public service provided by Wells Fargo. You may also access the

More information

M A K E T H E M O S T O F YO U R C R E D I T S C O R E

M A K E T H E M O S T O F YO U R C R E D I T S C O R E M A K E T H E M O S T O F YO U R C R E D I T S C O R E A free publication provided by Consolidated Credit Counseling Services of Canada, Inc., a registered charitable credit counselling and debt management

More information

A LESSON PLAN TO UNDERSTANDING. Credit Scores. Provided by

A LESSON PLAN TO UNDERSTANDING. Credit Scores. Provided by A LESSON PLAN TO UNDERSTANDING Credit Scores Provided by A LESSON PLAN TO UNDERSTANDING Credit Scores Provided by INTRODUCTION A credit score is a three-digit number derived from a mathematical interpretation

More information

redit score 600 APR ebt mortgage rate YOUR CREDIT SCORES payment history Credit scores are vital to your financial health nstallment loan

redit score 600 APR ebt mortgage rate YOUR CREDIT SCORES payment history Credit scores are vital to your financial health nstallment loan nstallment loan 20 40 680 ebt 00 redit score 600 665 payment history APR mortgage rate YOUR CREDIT SCORES Credit scores are vital to your financial health A credit score is a number that helps lenders

More information

IMPORTANCE OF CREDIT HISTORY AND SUCCESSFUL SAVING

IMPORTANCE OF CREDIT HISTORY AND SUCCESSFUL SAVING IMPORTANCE OF CREDIT HISTORY AND SUCCESSFUL SAVING From America Saves and Experian WHAT IS A CREDIT REPORT AND SCORE? A credit score is a three digit number that measures how likely you are to repay a

More information

The USA Mortgage Smart-Loan Guide

The USA Mortgage Smart-Loan Guide The USA Mortgage Smart-Loan Guide Page 1 of 8 The USA Mortgage Smart-Loan Guide Hello! Welcome to the USA Mortgage Smart-Loan Guide. Please keep in mind that this simple guide is not intended to be an

More information

Understanding Your Credit Score and How You Can Improve It

Understanding Your Credit Score and How You Can Improve It Understanding Your Credit Score and How You Can Improve It How is your score calculated? The exact formula is a mystery and protected by the Federal Trade Commission Think of it as a secret recipe. Credit

More information

Improving Your Credit

Improving Your Credit Teacher Homebuyer Guide to: Improving Your Credit By John Godbey, Founder and Broker of Teacher Homebuyer Real Estate Introduction Thank you for signing up for our Ebook "Improving Your Credit." We find

More information

Credit Scoring. 1-800-444-RATE www.gogsf.com

Credit Scoring. 1-800-444-RATE www.gogsf.com Credit Scoring 1-800-444-RATE www.gogsf.com Your credit score is a major factor that will be considered by the lender when they review your loan application. They want to know what your credit history

More information

Understanding Your Credit Score and Credit Report. George Williams, CPA, JD, LLM Ross, Rosenthal & Company, LLP June 21, 2012

Understanding Your Credit Score and Credit Report. George Williams, CPA, JD, LLM Ross, Rosenthal & Company, LLP June 21, 2012 Understanding Your Credit Score and Credit Report George Williams, CPA, JD, LLM Ross, Rosenthal & Company, LLP June 21, 2012 What is a Credit Score? What is a Credit Report? A credit score is a number

More information

Insurance Score Models

Insurance Score Models Insurance Score Models Prepared by State of Alaska Division of Insurance Department of Community and Economic Development www.dced.state.ak.us/insurance (907) 465-2020 Insurance Score Models Some insurers

More information

About your credit score. About FICO Score. Other names for FICO Score. http://www.myfico.com/crediteducation/creditscores.aspx

About your credit score. About FICO Score. Other names for FICO Score. http://www.myfico.com/crediteducation/creditscores.aspx http://www.myfico.com/crediteducation/creditscores.aspx About your credit score Your credit score influences the credit that s available to you and the terms (interest rate, etc.) that lenders offer you.

More information

PNC Financial Education FINANCIAL OPS. Banking Solutions for Military Personnel. Credit: Self study Guide

PNC Financial Education FINANCIAL OPS. Banking Solutions for Military Personnel. Credit: Self study Guide PNC Financial Education FINANCIAL OPS Banking Solutions for Military Personnel Credit: Self study Guide Revision Date: 11/2012 PNC Financial Education:FINANCIAL OPS Understanding Credit We all have financial

More information

Why Credit is Important

Why Credit is Important Page 1 Why Credit is Important Page 6 How to Protect Yourself from Identity Theft Page 7 Cosigning and Money Lending Tips Page 8 How to Avoid Credit Card Interest Why Credit is Important Learning to build

More information

CREDIT IN A NEW COUNTRY:

CREDIT IN A NEW COUNTRY: CREDIT IN A NEW COUNTRY: A GUIDE TO CREDIT IN CANADA A free publication provided by Consolidated Credit Counseling Services of Canada, Inc., a registered charitable credit counselling and debt management

More information

Using Credit to Your Advantage.

Using Credit to Your Advantage. Using Credit to Your Advantage. Topic Overview. The Using Credit To Your Advantage topic will provide participants with all the basic information they need to understand credit what it is and how to make

More information

GREENPATH FINANCIAL WELLNESS SERIES

GREENPATH FINANCIAL WELLNESS SERIES GREENPATH FINANCIAL WELLNESS SERIES UNDERSTANDING YOUR CREDIT REPORT & SCORE Through financial knowledge and expertise, we provide high-quality products and services that enable people to enjoy a better

More information

Office of Student Financial Management

Office of Student Financial Management February 2015 Office of Student Financial Management Kasia Palm: Director of Student Financial Management What is Credit? - The ability to obtain goods/services before payment based on the trust that a

More information

What is a Credit Score and Why Do I Care What It Is?

What is a Credit Score and Why Do I Care What It Is? What is a Credit Score and Why Do I Care What It Is? Your Credit Score is a lot like the score you get on a test. You get points for good credit decisions and behavior and you get points taken away for

More information

Credit Score. Each year, you are able to request one free credit report from all three major credit

Credit Score. Each year, you are able to request one free credit report from all three major credit Myers 1 Ashley Myers Malory Klocke Concept Essay Credit Score Each year, you are able to request one free credit report from all three major credit reporting agencies: TransUnion, Equifax, and Experian.

More information

MANAGING CREDIT101 TM %*'9 [[[ EPXEREJGY SVK i

MANAGING CREDIT101 TM %*'9 [[[ EPXEREJGY SVK i MANAGING CREDIT101 TM i This book is intended as a general guide to the topics discussed, and it does not deliver accounting, personal finance, or legal advice. It is not intended, and should not be used,

More information

How to improve your FICO Score in perilous times By Blair Ball. National Distribution of FICO Scores

How to improve your FICO Score in perilous times By Blair Ball. National Distribution of FICO Scores How to improve your FICO Score in perilous times By Blair Ball When you re applying for credit whether it s a credit card, a car loan, a personal loan or a mortgage lenders want to know your credit risk

More information

Credit History CREDIT REPORTS CREDIT SCORES BUILDING A STRONG CREDIT REPORT

Credit History CREDIT REPORTS CREDIT SCORES BUILDING A STRONG CREDIT REPORT CREDIT What You Should Know About... Credit History CREDIT REPORTS CREDIT SCORES BUILDING A STRONG CREDIT REPORT YourMoneyCounts Understanding what your credit history is what s in it, what s not in it

More information

The Eight Money Smart for Young Adults Modules

The Eight Money Smart for Young Adults Modules The Eight Money Smart for Young Adults Modules 1 1 Module 1: Bank On It 2 2 Module 2: Check It Out 3 3 Check It Out Benefits of checking accounts Types of checking accounts Understanding banking fees Opening

More information

Credit Cards: Rules of Thumb

Credit Cards: Rules of Thumb Name: Date: Credit Cards: Rules of Thumb Rule 1: Never carry a credit card balance. When you use your credit card to purchase items, you will receive a statement at the end of each month that will need

More information

Understanding Credit

Understanding Credit Understanding Credit Topics covered: Establishing Credit Credit Scores Repairing Credit Why is credit necessary? Applying for a loan Applying for a credit card Applying for a mortgage Renting an apartment/house

More information

Remember the Interest

Remember the Interest STUDENT MODULE 7.1 BORROWING MONEY PAGE 1 Standard 7: The student will identify the procedures and analyze the responsibilities of borrowing money. Remember the Interest Mom, it is not fair. If Bill can

More information

Financial Management

Financial Management I. Banking landscape today In the past year alone, banks have taken many actions to make up for lost profits, including eliminating free checking, raising fees, and pushing customers to buy more financial

More information

Understanding Credit. Megan Stearns, Credit Counselor

Understanding Credit. Megan Stearns, Credit Counselor Understanding Credit Megan Stearns, Credit Counselor Obtaining your free credit report will lower your credit score. Closing old accounts can help your credit score. Paying off the balances on your credit

More information

UNDERSTANDING YOUR CREDIT REPORT (Part 1) By Bill Taylor

UNDERSTANDING YOUR CREDIT REPORT (Part 1) By Bill Taylor UNDERSTANDING YOUR CREDIT REPORT (Part 1) By Bill Taylor Most studies about consumer debt have only focused on credit cards and mortgages. However, personal debt also may include medical expenses, school

More information

All About Credit Reports from A to Z

All About Credit Reports from A to Z All About Credit Reports from A to Z Adverse Action Notice A notice that you have been denied credit, employment, insurance, or other benefits based on information in a credit report. The notice should

More information

Office of Student Financial Management

Office of Student Financial Management September 2013 Office of Student Financial Management Kasia Palm: Director of Student Financial Management What is Credit? - The ability to obtain goods/services before payment based on the trust that

More information

Lending 101 The Basics

Lending 101 The Basics Lending 101 The Basics Overview Loan categories Credit types Different loan types Interest rate Applying for a loan Credit & credit reports Simple loan tips Test Loan Categories Secured loan - a loan that

More information

Credit Report Forensics. Boston University Financial Assistance February 15, 2012 Christina Coviello, Senior Assistant Director

Credit Report Forensics. Boston University Financial Assistance February 15, 2012 Christina Coviello, Senior Assistant Director Credit Report Forensics Boston University Financial Assistance February 15, 2012 Christina Coviello, Senior Assistant Director Today s Agenda: What is credit? What is a credit report? How to get a copy

More information

Financial payment profile Fair Isaac Corporation (FICO) 300 to 850 the higher, the better

Financial payment profile Fair Isaac Corporation (FICO) 300 to 850 the higher, the better What is a credit score? Financial payment profile Fair Isaac Corporation (FICO) 300 to 850 the higher, the better National distribution of FICO scores What a low score could cost you? Tens of thousands

More information

Exercise 4A: What Info Do You Need for a Loan?

Exercise 4A: What Info Do You Need for a Loan? Exercise 4A: What Info Do You Need for a Loan? What information do you think is needed to get a loan? Review several samples of loan applications to see what The Cost of Using Credit As mentioned earlier,

More information

Credit Repair Tool Box

Credit Repair Tool Box Credit Repair Tool Box There s no such thing as a HOPEless credit situation. We know that bad credit happens to good people all the time. The good news is that we ve been there before and we can help you

More information

CREDIT REPORTS WHAT EVERY CONSUMER SHOULD KNOW ABOUT MORTGAGE EQUITY P A R T N E R S

CREDIT REPORTS WHAT EVERY CONSUMER SHOULD KNOW ABOUT MORTGAGE EQUITY P A R T N E R S F WHAT EVERY CONSUMER SHOULD KNOW ABOUT CREDIT REPORTS MORTGAGE EQUITY P A R T N E R S Your Leaders in Lending B The information contained herein is for informational purposes only. The algorithymes and

More information

Your Money Matters! Financial Literacy Teacher Guide. Thanks to TD for helping us bring this resource to schools for free.

Your Money Matters! Financial Literacy Teacher Guide. Thanks to TD for helping us bring this resource to schools for free. Your Money Matters! Financial Literacy Teacher Guide 2 Table of Contents: Introduction...3 Toronto Star epaper...4 Financial Awareness Inventory...5 SPENDING To Spend or Not to Spend Activity...6 I Need

More information

Establishing and maintaining good credit is an important part of financial planning. Typically most individuals do not have enough cash on hand for

Establishing and maintaining good credit is an important part of financial planning. Typically most individuals do not have enough cash on hand for Basics of Credit Establishing and maintaining good credit is an important part of financial planning. Typically most individuals do not have enough cash on hand for emergencies, or to make major purchases

More information

The Road to Good. How to Start Building Your credit with In-House Auto Financing

The Road to Good. How to Start Building Your credit with In-House Auto Financing The Road to Good Credit: How to Start Building Your credit with In-House Auto Financing I. Introduction II. What is a credit score? III. How credit scores are calculated Payment history Amount of debt

More information

Borrowing Realities. Student Loans And Credit: An Overview 4/17/2015. Agenda

Borrowing Realities. Student Loans And Credit: An Overview 4/17/2015. Agenda Student Loans And Credit: An Overview 04.12.20 Jacquie Carroll Agenda 2 Borrowing realities Credit reports and scores Student loan and credit card impact Conversation and best practices for student education

More information

Understanding Credit. The Three C s of Credit. What is a Credit Bureau?

Understanding Credit. The Three C s of Credit. What is a Credit Bureau? Understanding Credit By definition, the word credit has to do with trust. This is why credit impacts so many financial issues in our lives including the extension of a loan or credit card, how high an

More information

WHAT IS BUSINESS CREDIT?

WHAT IS BUSINESS CREDIT? 1 WHAT IS BUSINESS CREDIT? Why Do I Need Credit? Establishing a good credit rating is an important financial priority for every business. Having good business credit means that owners of businesses can

More information

Taking Charge of Your Financial Future

Taking Charge of Your Financial Future Taking Charge of Your Financial Future Why is Your Credit Score Important? Understanding credit scoring can help you manage your credit. By knowing how credit risk is evaluated, you can take actions that

More information

What Will Keep Me From Getting A Mortgage Right Now?

What Will Keep Me From Getting A Mortgage Right Now? What Will Keep Me From Getting A Mortgage Right Now? Why can t I get a mortgage? Why was my mortgage application denied? What s keeping me from getting a mortgage right now? Page 2 of 11 What Will Keep

More information

What is a credit report?

What is a credit report? What is a credit report? - Consumer Financial Protection Bureau RETURN TO ORIGINAL QUESTION What is a credit report? UPDATED 6/21/2013 A credit report contains information about your credit history and

More information

Understanding Your Credit Score

Understanding Your Credit Score Understanding Your Credit Score Contents Your Credit Score A Vital Part of Your Credit Health...... 1 How Credit Scoring Helps You........ 2 Your Credit Report The Basis of Your Score............. 4 How

More information

NOTES. 12 Your Credit Score Your Credit Score 1 CONTENTS:

NOTES. 12 Your Credit Score Your Credit Score 1 CONTENTS: 12 Your Credit Score Your Credit Score 1 NOTES CONTENTS: Introduction...2 The History of Credit Scoring...2 Why Your Credit Score is So Important...3 The Five Factors of Credit Scoring...3 How Does a Low

More information

A.MORTGAGE LENDER B. CREDIT CARD ISSUER C.HOME INSURER E. ELECTRIC COMPANY F. LANDLORD G.ALL OF THE ABOVE D.CELL PHONE COMPANY

A.MORTGAGE LENDER B. CREDIT CARD ISSUER C.HOME INSURER E. ELECTRIC COMPANY F. LANDLORD G.ALL OF THE ABOVE D.CELL PHONE COMPANY 1. WHICH OF THE FOLLOWING MIGHT USE CREDIT SCORES? A.MORTGAGE LENDER B. CREDIT CARD ISSUER C.HOME INSURER E. ELECTRIC COMPANY F. LANDLORD G.ALL OF THE ABOVE D.CELL PHONE COMPANY 1. WHICH OF THE FOLLOWING

More information

Keeping Score: Why Credit Matters

Keeping Score: Why Credit Matters Keeping Score: Why Credit Matters LESSON 6: TEACHERS GUIDE In the middle of a championship football game, keeping score is the norm. But when it comes to life, many young adults don t realize how important

More information

Student Loans And Credit: An Overview

Student Loans And Credit: An Overview /16/20 Student Loans And Credit: An Overview.14.20 Jacquie Carroll, Ed.D., AFC, Engagement & Education Consultant Agenda 2 Borrowing realities Credit reports and scores Student loan and credit card impact

More information

Credit: The Good and the Bad

Credit: The Good and the Bad Managing Your Credit Effectively Credit can be a valuable addition to your financial toolbox if you use it carefully and sensibly. Credit means someone is willing to loan you money called Principal in

More information

Understanding. What you need to know about the most widely used credit scores

Understanding. What you need to know about the most widely used credit scores Understanding What you need to know about the most widely used credit scores 300 850 2 The score lenders use. FICO Scores are the most widely used credit scores according to a recent CEB TowerGroup analyst

More information

Unlock Your Financial Future

Unlock Your Financial Future CREDIT SERVICES Unlock Your Financial Future planning, managing & results Success Credit Services We saved thousands of dollars on auto insurance, homeowners insurance, life insurance--whatever you name

More information

Understanding Credit Scoring

Understanding Credit Scoring The Ultimate Guide to Understanding Credit Scoring www. Table of Contents The Basics Of Credit Scoring...3 5 Factors That Make Up A Credit Score...4 Rate Shopping...6 Late Payments...7 Common Credit Myths...8

More information

Personal Money Management. Why and How we spend money and potential impacts to personal credit.

Personal Money Management. Why and How we spend money and potential impacts to personal credit. Personal Money Management Why and How we spend money and potential impacts to personal credit. Presentation Objectives Understanding Your Financial Personality Personal Credit Scores, impacts, tips, your

More information

UNDERSTANDING YOUR CREDIT SCORE WHAT S THE BIG DEAL? WHAT MAKES UP YOUR CREDIT SCORE? WHAT S THE NEXT STEP?

UNDERSTANDING YOUR CREDIT SCORE WHAT S THE BIG DEAL? WHAT MAKES UP YOUR CREDIT SCORE? WHAT S THE NEXT STEP? UNDERSTANDING YOUR CREDIT SCORE WHAT S THE BIG DEAL? WHAT MAKES UP YOUR CREDIT SCORE? WHAT S THE NEXT STEP? SO WHAT S THE BIG DEAL? A credit score not only influences your homebuying potential, but is

More information

Understanding Your FICO Score. Understanding FICO Scores

Understanding Your FICO Score. Understanding FICO Scores Understanding Your FICO Score Understanding FICO Scores 2013 Fair Isaac Corporation. All rights reserved. 1 August 2013 Table of Contents Introduction to Credit Scoring 1 What s in Your Credit Reports

More information

Checking Savings Investments

Checking Savings Investments Checking Savings Investments Checking Account 90% of transactions involving money are made with checks. What is a check? When opening a checking account at a financial institution the customer enters into

More information

Understanding Your Credit Score Contents Your Credit Score A Vital Part of Your Credit Health...... 1 How Credit Scoring Helps You........ 2 Your Credit Report The Basis of Your Score............. 4 How

More information

PA HealthCare Credit Union. The Credit Clinic. The PA HealthCare Credit Union contributes to the financial success of our members.

PA HealthCare Credit Union. The Credit Clinic. The PA HealthCare Credit Union contributes to the financial success of our members. PA HealthCare Credit Union The Credit Clinic The PA HealthCare Credit Union contributes to the financial success of our members. 1 Copyright 2006 Agenda Welcome & Introduction Overview Product Rate Credit

More information

Keeping Score: Why Credit Matters LESSON 1

Keeping Score: Why Credit Matters LESSON 1 Keeping Score: Why Credit Matters LESSON 1 Keeping Score: Why Credit Matters LESSON 1: TEACHERS GUIDE In the middle of a football grandfinal, keeping score is the norm. But when it comes to life, many

More information

The West Virginia State Treasurer s Office. A free publication provided by

The West Virginia State Treasurer s Office. A free publication provided by YOUR CREDIT SCORE A free publication provided by The West Virginia State Treasurer s Office Visit www.wvtreasury.com or Call 1.800.422.7498 From the Office of West Virginia State Treasurer, John D. Perdue

More information

Credit Cards. and Your Credit Score

Credit Cards. and Your Credit Score Credit Cards and Your Credit Score Introduction Credit Cards and Your Credit Score Learning Objectives Lesson 1 Selecting a Credit Card: The Devil s in the Detail Identify and explain the costs and terms

More information

Credit Score Secrets Revealed

Credit Score Secrets Revealed Credit Score Secrets Revealed This Complementary Special Report was prepared by: 2 The Secrets Behind Your Credit Scores Your life is your credit. And your Credit Score is the key to everything. As important

More information

ratecredit score credit scoremortgage rate payment historydebtinstallment loanapr installment loanaprpayment historydebt Your Credit Scores

ratecredit score credit scoremortgage rate payment historydebtinstallment loanapr installment loanaprpayment historydebt Your Credit Scores 700 ratecredit score mortgage payment historydebtinstallment loanapr credit scoremortgage rate installment loanaprpayment historydebt ratecredit score mortgage 720 665 600 680 740 620 720 665 Your Credit

More information

REVIEW.The Credit Process

REVIEW.The Credit Process REVIEW.The Credit Process Credit when goods, services, and/or money are received in exchange for a promise to pay back a definite sum of money at a future date. Wants to acquire an item Does not have enough

More information

MANAGING CREDIT101 i

MANAGING CREDIT101 i MANAGING CREDIT101 i This book is intended as a general guide to the topics discussed, and it does not deliver accounting, personal finance, or legal advice. It is not intended, and should not be used,

More information

Wondering how to borrow using the equity in your home? Ask a Citizen. The Citizens Guide to Home Equity Financing

Wondering how to borrow using the equity in your home? Ask a Citizen. The Citizens Guide to Home Equity Financing Wondering how to borrow using the equity in your home? Ask a Citizen. The Citizens Guide to Home Equity Financing We understand you have questions about home borrowing. We can help. At Citizens Bank, we

More information

Your Credit Score. 800-491-2328 www.congressionalfcu.org. score of at least 620 for approval and 760 for the best interest rate.

Your Credit Score. 800-491-2328 www.congressionalfcu.org. score of at least 620 for approval and 760 for the best interest rate. 800-491-2328 www.congressionalfcu.org Your Credit Score Your credit score can have a major impact on your life. Not only do creditors typically check your score when deciding whether or not to approve

More information

Brought to you by PEPCO FCU. Seminar objectives

Brought to you by PEPCO FCU. Seminar objectives Take Charge: Wise Use of Credit Cards Brought to you by PEPCO FCU Seminar objectives Learn: Benefits and costs of credit cards How to build a good credit history Warning signs of too much debt How to figure

More information

Make the most of your credit score

Make the most of your credit score Make the most of your credit score Consolidated Credit 5701 West Sunrise Boulevard Fort Lauderdale, FL 33313 1-800-210-3481 www.consolidatedcredit.org Congratulations on taking this important step to learn

More information

Understanding Your FICO Score

Understanding Your FICO Score Understanding Your FICO Score 2013 Fair Isaac Corporation. All rights reserved. 1 August 2013 Table of Contents Introduction to Credit Scoring 1 What s in Your Credit Report 1 Checking Your Credit Report

More information

FICO Score Open Access Consumer Credit Education US Version. Frequently Asked Questions about the FICO Score

FICO Score Open Access Consumer Credit Education US Version. Frequently Asked Questions about the FICO Score FICO Score Open Access Consumer Credit Education US Version Frequently Asked Questions about the FICO Score 2012 Fair Isaac Corporation. All rights reserved. 1 January 01, 2012 Table of Contents About

More information