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Credit Scores and Credit Reports – How the System Really Works, What You Can Do

Credit Scores and Credit Reports – How the System Really Works, What You Can Do. Sue Woodard – Mortgage Market Guide with Credit Expert Evan Hendricks. Evan Hendricks. Author of Credit Scores and Credit Reports – How the System Really Works, What You Can Do

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Credit Scores and Credit Reports – How the System Really Works, What You Can Do

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  1. Credit Scores and Credit Reports –How the System Really Works, What You Can Do Sue Woodard – Mortgage Market Guide with Credit Expert Evan Hendricks

  2. Evan Hendricks • Author of Credit Scores and Credit Reports – How the System Really Works, What You Can Do • Regular Presenter at Federal Trade Commission Trade Workshops • Qualified at Federal and State Levels as Expert on Identity Theft Court Cases

  3. Credit Score Model • Scores are Somewhat Counter Intuitive • 30% Based on Balance to Limits • Individually and Cumulatively • Balances Normally Reported Month End • Closing Accounts Could Hurt Scores • Recent Negative Information Damaging • Paying Off Five Year Old Charge Off Becomes Recent and Could Damage Credit Rating

  4. What Can Consumers Do? • Difficult To Get Permanent Removal of Info • Keep Balances Low to Limits • Some Credit Issuers Don’t Issue Limits • Dispute All Bureaus to Get Issuer to Report • Monthly Accounts Like American Express Will Demonstrate High Balance Over Time • Review Personal Credit Reports Regularly

  5. Annual Credit Reports • New Federal Law Provides for Annual Credit Reports • www.annualcreditreports.com • Available Annually, Quarterly • Unlike Fee Based “Free” Credit Report Services • Mortgage Professional Can Supply Credit Reports for Review

  6. Rapid Re-Score • Independent Credit Re-Sellers Can Provide Updated Scores Based on Corrected Information • Most Re-Sellers Part of NCRA or National Credit Reporting Association www.ncra.org • Potential Increases of 20-100 Points • Cost Ranges From $75 to Several Hundred Dollars Based on Trade Lines Involved

  7. Credit Repair Companies • Veracity Credit – Denver • Credit Resource Corp. – L.A. • Companies Specialize in Removal • Fees Vary – Set Up Fees plus Monthly Maintenance Fees

  8. Credit Repair Tactics • Disputes Must Be Answered Within 30 Days – “Bombardment” Method Sometimes Yields Results • If Accounts Shown as Disputed – Removed From Score Models Till Resolved • Credit Grantors Can Provide Quicker Response Than Credit Reporting Agencies • Always Get Name, Extension, Expected Date of Reported Change, Request Faxed & Signed Acknowledgement

  9. Identity Theft • Fastest Growing White Color Crime • Can Drive Score From 700+ to 580 • Time Consuming To Resolve • Costs Incurred Can Be Extensive

  10. What’s a Consumer To Do • Check Report Regularly • Be Aware of Inquires From Out of Area • Credit History Shows Incorrect Accounts, Collections, Charge-Offs • Dispute With Grantor Immediately • Resolve Your New Part-time Job • File Fraud Alert, Police Report or Fraud Affidavit • Put Account Name and Account Number On It

  11. It May Not Be Over Yet • Consumer May Have To File Suit • www.naca.net National Association of Consumer Advocates • Use for Recovery of Attorney’s Fees if Needed To Right Report

  12. What About Inquiries? • You Can Shop for 45 Days With a Hard Inquiry, Mortgage Auto, etc. • Inquiries Pulled From Consumer Do Not Count Against Them

  13. Who Else Wants to Know Your Score? • Employers View Credit Reports as Inexpensive Background Checks • Insurance Industry – If Under Financial Stress You May Be More Prone to Cause Loss For Insurance Company – Increase Rates • Mortgage Insurance Premiums Can Be Impacted by Scores, Positively or Negatively

  14. Invest In Your Clients • Direct Clients to Free Site for Annual Review • www.annualcreditreport.com • Everyone Entitled to Free Report By September 1, 2005 • Site Contains Valuable Information for Client Mailings

  15. Credit Scores and Credit Reports –How the System Really Works, What You Can Do • Second Edition Benefits – Includes Information on Companies Not Reporting Total Information • One Credit Bureau Doesn’t Always Report Total Information • Updated Identity Theft and Credit Repair Chapter Information • Includes Information on Good Credit Repair Companies

  16. How To Get Book • Discounted Price For Case Purchase – Save $250.60 per Case of 28 Books • Evan@privacytimes.com • www.privacytimes.com • Phone: 301-229-7002

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