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The American Dream

Understanding Your Credit Report. The American Dream. Homebuyer Education. What Are My Rights?. Fair Credit Reporting Act Governs Consumer Reporting Agencies Monitored by Federal Trade Commission Protect Consumer Rights. What Are My Rights?. Access to your own file

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The American Dream

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  1. Understanding Your Credit Report The American Dream Homebuyer Education

  2. What Are My Rights? • Fair Credit Reporting Act • Governs Consumer Reporting Agencies • Monitored by Federal Trade Commission • Protect Consumer Rights

  3. What Are My Rights? • Access to your own file • Right to dispute inaccurate information • Inaccurate information must be corrected or deleted • Outdated information may not be reported • Consent required for access to your file • Can seek damages if Act is violated

  4. What Is A Credit Report? • Record of an individuals credit history • 3 major credit bureaus compile information • Equifax • TransUnion • Experian (formerly TRW) • Used by credit grantors, insurance companies, landlords and employers

  5. What’s Reported on a Credit Report? Personal Information Credit Information Collection Information Public Records Inquires

  6. How Long Does Information Stay on the Credit Report? • Late payments/delinquencies 7 years • Accounts in collection 7 years • Charge-offs or profit/loss write-offs 7 years • Repossession 7 years • Student loan defaults 7 years • Liens or judgments – paid or open 7 years • Bankruptcy • Chapter 7 10 years • Chapter 13 7 years

  7. How Can I Obtain My Credit Report? • Order through 3 major bureaus • www.annualcreditreport.com • Get a free copy if • Denied credit, housing, employment, insurance • Unemployed • Adverse action taken • Inaccuracy due to fraud • Public Assistance

  8. How Can I Dispute Information? • Can dispute inaccurate and outdated information • Put it in writing to each bureau • Bureau has reasonable time to respond • Place 100 word statement on report

  9. What is a Credit Score? • A number showing your credit risk • Answers a lenders question • “If I give this person a loan or credit card, how likely is it that I will get paid back on time?”

  10. How Scoring Works • A credit score is the result of a mathematical equation • Scores range from 300 to 850 • The lower the score, the higher the risk • Credit scores help lenders make credit decisions

  11. Your Credit Report: The Basics of your Score • Credit Reporting Agencies maintain files on millions of borrowers • Data shows: • Whether you’ve paid your bills on time • How much credit you’ve used • Types of credit in use • Length of time your accounts have been open • Whether you’re seeking new credit

  12. How Can I Improve My Credit Score? • Pay on time • Repay old debt • Keep balances low • Minimize balance transfers • Apply for new credit sparingly

  13. How Your Credit Score Impacts You • The payoff can be huge • Example • 30-year fixed rate mortgage of $150,000 • Improve your credit score from 550 to 700 • Save approximately $131,000 over the life of the loan – or $365 per month

  14. Understanding Your Credit Report The American Dream Homebuyer Education

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