Credit Reports

1. Credit Reports Money Management II

2. What We’re Covering Today What a credit report is and why it’s important Credit bureau basics What is actually on a credit report Citizens rights & penalties

3. What is a Credit Report, Why is it Important Credit Report: The record of your complete credit history Credit records are collected and maintained by credit bureaus. Lenders rely heavily on credit reports when considering extending credit.

4. Credit Bureaus: What They Are • Credit Bureau: An agency that collects information on how promptly people and businesses pay their bills. • The three major credit bureaus are: • Experian • Trans Union • Equifax

5. Credit Bureaus Continued Each of the three major bureaus maintain more than 200 million credit reports on individuals. The reports are based on information they receive from lenders. There are several thousand smaller credit bureaus in operation. Credit bureaus make money by selling the information they collect (Reports) to creditors who are considering loan applications/extending credit.

6. Credit Bureaus: What They Collect, From Where • Credit Bureaus get their information from all sorts of places, such as: • The information they collect includes: • Type of credit they have extended • The amounts and terms of the loans • Customer’s paying habits.

7. Credit Report: What’s It Made Of? • A typical credit report will contain the following: • Name • Address • Previous Address • Social Security Number • Birth date • Employment Info (Where, Position & $$) • Previous Employment Info • Homeowner or Renter Status • Checks returned for insufficient funds • Your spouse’s information

8. Credit Reports: What’s It Made Of? • Credit reports also contain very detailed information on every loan or use of credit. • These reports are updated regularly to show: • Payments you have made (Both amounts and number of) • Late Payments • Missed Payments • How much you still owe • Lawsuits & Judgments against you may appear as well.

9. Your Rights – The Fair Credit Reporting Act • Fair and accurate credit reporting is vital to both creditors and consumers. • To ensure citizens rights were being protected, Congress passed the Fair Credit Reporting Act • The act regulates the use of credit reports by: • Deleting out of date information • Giving consumers access to their reports • Giving consumers the right to correct discrepancies • Limiting who can obtain your credit report

10. So Who’s Looking At My Information • Credit reports are only issued to properly identified people for approved purposes. • Credit reports can also be obtained through/for • Court order • Your own written request • Connection with a credit transaction • The underwriting of insurance • Other legitimate business needs • No one else is supposed to get this information!

11. How Long Is That On There? • The majority of information in your report may only be reported for seven years. • If you have declared personal bankruptcy this time frame becomes 10 years. • Credit Bureaus can disclose information past these time frames if: • You are being reviewed for a credit application of $75,000 or more • You apply to purchase life insurance of $150,000 or more

12. That Shouldn’t Be On There! Even with careful procedures and the best of intentions, mistakes do happen and they may appear on your credit report. If you think that an error has occurred and that incorrect data is being reported, contact the bureau and dispute the information. If you challenge the accuracy of an item on the report, the bureau must remove the item unless the lender can verify the information is accurate.

13. Crime & Punishment • If a credit bureau does not follow the laws established by the Fair Credit Reporting Act you have a legal right to sue. • If found guilty the bureau may have to pay: • Court Costs & Attorney Fees • Actual & Punitive Damages • Action must be brought within two years of the occurrence or discovery of material • Someone who obtains or provides an unauthorized credit report faces up to a $5,000 fine, one year in jail, or both.

14. Wrap-Up & Review Credit reports are the complete history of your credit use! There is a ton of sensitive information on these reports, therefore access to them is limited. You have certain rights as a consumer when it comes to your credit report. Remember them and ensure that your report is as accurate as possible!