CREDIT REPORTS/CREDIT SCORE

1. CREDIT REPORTS/CREDIT SCORE • YOUR DETAILED CREDIT HISTORY USED TO DETERMINE YOUR CREDITWORTHINESS • CONTAINS IDENTIFYING INFORMATION • NAME, DATE OF BIRTH, SS NUMBER, CURRENT AND FORMER ADDRESSES, EMPLOYMENT INFORMATION • CREDIT CARD PAYMENT HISTORY • INCLUDES CREDIT LIMITS, 7 YEARS OF HISTORY • LOAN PAYMENT HISTORY • 7 YEARS OF HISTORY • CREDIT INQUIRIES • LAST 2 YEARS • COLLECTION RECORDS • BANKRUPTCIES, FORECLOSURES, LEGAL SUITS, TAX LIENS, GARNISHMENTS • THREE CREDIT AGENCIES KEEP TRACK OF INFORMATION • TRANSUNION, EQUIFAX, EXPERIAN • FREE ANNUAL CREDIT REPORT AVAILABLE EACH YEAR • WWW.ANNUALCREDITREPORT.COM

2. WAYS TO ESTABLISH CREDIT • CREDIT HISTORY CAN IMPACT RATES FOR MORTGAGES, CAR LOANS, CELL PHONES, INSURANCE, AND EVEN GETTING A JOB • POSITIVE STEPS • OPEN CHECKING AND SAVINGS ACCOUNTS • GET CREDIT CARD IN YOUR OWN NAME • KEEP CREDIT CARD USE TO LESS THAN 30% OF LIMITS • PAY BALANCE EACH MONTH (BEST WAY TO BUILD CREDIT) • GET AN INSTALLMENT LOAN WITH SHORT DURATION • USE CREDIT CARDS REGULARLY • REGULARLY CHECK CREDIT REPORT • THINGS TO AVOID • NEVER MAX OUT CARDS • DON’T OPEN TOO MANY CREDIT CARDS

3. CREDIT SCORES • PAYMENT HISTORY – 35% • NUMBER OF ACCOUNTS PAID AS AGREED • NUMBER OF PAST DUE ITEMS • SEVERITY OF DELINQUENCIES • AMOUNTS OWED – 30% • AMOUNT OWING ON ACCOUNTS • NUMBER OF ACCOUNTS WITH BALANCES • PROPORTION OF CREDIT LINES USED • PROPORTINON OF INSTALLMENT LOANS STILL OWED • LENGTH OF CREDIT HISTORY – 15% • TIME SINCE ACCOUNTS OPENED • TIME SINCE ACCOUNT ACTIVITY • NEW CREDIT – 10% • NUMBER OF RECENTLY OPENED ACCOUNTS • NUMBER OF RECENT CREDIT INQUIRIES • TYPES OF CREDIT USED – 10% • NUMBER OF VARIOUS TYPE OF ACCOUNTS • FICO SCORE RANGES FROM 300 – 850 • ANYTHING ABOVE 650 CONSIDERED GOOD • INCOME NOT CONSIDERED IN CALCULATING YOUR CREDIT SCORE

4. QUALIFICATION FOR MORTGAGES • FRONT-END RATIO • ANNUAL SALARY X 30%/12 = MAX. MONTHLY HOUSING EXPENSE • PRETAX INCOME • MONTHLY HOUSING EXPENSE = INTEREST, PRINCIPLE, PROPERTY TAXES, MORTGAGE INSURANCE, HOA DUES, HOMEOWNER’S INSURANCE • BACK-END RATIO • ANNUAL SALARY X 45%/12 = MAX. ALLOWABLE DEBT-TO-INCOME RATIO • PRETAX INCOME • ALL MONTHLY PAYMENT OBLIGATIONS—MORTGAGE, OTHER LOANS, CHILD SUPPORT, CREDIT CARD PAYMENTS, CAR PAYMENTS, INSTALLMENT LOANS

5. IDENTITY THEFT • PROTECT YOURSELF • KEEP PERSONAL INFORMATION OUT OF SIGHT • SHRED CREDIT CARD OFFERS BEFORE THROWING THEM AWAY • DON’T MAIL CHECKS FROM HOME MAILBOX • CONSTANTLY REVIEW BANK AND CREDIT CARD STATEMENTS ON-LINE • DON’T DISCLOSE ACCOUNT NUMBERS OVER PHONE UNLESS YOU INITIATED CALL • CUT UP OLD CARDS BEFORE YOU THROW THEM AWAY • CHECK FICO SCORE AND CREDIT REPORT AT LEAST ONCE PER YEAR • GUARD YOUR SOCIAL SECURITY NUMBER • USE HARD-TO-GUESS PASSWORDS • WHAT TO DO IF IDENTITY THEFT STRIKES • CALL THE CREDIT BUREAUS FOR ASSISTANCE • CHANGE ACCESS CODES AND CHANGE ACCOUNT NUMBERS • REPORT TO LOCAL POLICE • REPORT ALL FRAUDULENT TRANSACTIONS TO CREDITORS • KEEP RECORDS OF ALL CORESPONDENCE • LIMITS OF LIABILITY • MAXIMUM LIABILITY BASED ON WHEN THEFT IS REPORTED • BEFORE ANY UNAUTHORIZED CHARGES – ZERO • WITHIN 2 BUSINESS DAYS AFTER DISCOVERY - $50 • MORE THAN 2 DAYS, LESS THAN 60 DAYS - $500 • MORE THAN 60 DAYS – FULL BALANCE OF ACCOUNT