Free Credit Seminar Heaven View Notes

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Credit During The“Crunch”

How to THRIVE

while others are tryingto Survive!

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Agenda

Explain the roles of the credit reportingagencies

Explain why/how items can often beremoved from credit files

Discuss how we can thrive in today’seconomy

Share 10 credit tips

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Fair Credit Reporting ActSpecifically States that

Every Item Reporting on aCredit Report MUST be:

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Reported Timely

Bad credit can be reported for 7 years, 10years for bankruptcy.

Good credit can be reported for 10 years.

Guess which one fails to get reported themost?

Guess which one gets sold multiple times onlyto continue being reported?

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100% Verifiable

If the credit bureau ,creditor,

collection agency can’t verifythat an item belongs to you, it

MUST BE REMOVED!

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100% AccurateEvery aspect of an item must

be accurate.

Balance, on time payments,

late payments, high credit, ect.

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So if it’s not reporting

legally, the bureaus removeit, right?

NO, many times we have to fight to get itemsremoved that legally should not be reporting.

Approximately 30% will come off easily through a

standard dispute process.

 The rest is like a game of chess. If you don’t knowhow to play the game, you will not get the results

your looking for.

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So why is there so much resistance toremove what shouldn’t be reporting

anyway?

MONEY!!!! The credit bureaus earn money by selling your

information to lenders.

Credit Card Companies

Banks

Insurance Companies

Any industry that revolves around credit.

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How do we prepare

ourselves?

Educate

Debt Management

Budgeting

Credit Restoration

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FICO in a Nutshell

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1. Past Delinquencies…

35%

of Credit Score

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2. Revolving Debt Ratio…

30%of 

Credit Score

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3. Average Age of CreditFile…

15%of 

Credit Score

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4. Mix of Credit …

10%

of Credit Score

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5. Inquiries…

10%of 

Credit Score

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10

Credit Tips

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1. BE SELECTIVE ABOUT APPLYINGFOR NEW CREDIT OF ANY KIND.

Including those “You have been pre-approved” credit card invitationsthat you receive in the mail.

Every time that you have your creditpulled by a potential creditor orlender, you lose points from your

credit score immediately. Depending on the elements in yourcurrent credit report, you could loseanywhere from 2-15 points for one

hard inquiry.

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2. PREPARE BEFORE PAYING OFF

COLLECTIONS OR CHARGE OFFSPaying collections will decrease the creditscore immediately due to the date of last

activity becoming recent. If you are going topay off the debt.

make sure the creditor validates that the

debt is yours

that the creditor agrees to give you aletter of deletion

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3. DON’T CLOSE CREDIT CARDACCOUNTS.

If you close a credit card account

it will appear to the FICO that yourdebt ratio has gone up because whatyou owe versus available credit %increases.

Also, closing a card will affect otherfactors in the score such as length of 

credit history.

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4. DON’T MAX OUT OR OVER

CHARGE ON YOUR CREDIT CARDACCOUNTS.

This is the fastest way to bringyour score down 50-100 pointsimmediately. Try to keep your

credit card balances below 30% of their available limit at

all times during the loan process.

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5. DON’T CONSOLIDATE YOUR

DEBT ONTO 1 OR 2 CREDIT CARDS.

It seems like it would be the

smart thing to do, however, whenyou consolidate all of your debt

onto one card, it appears that you

are maxed out on that card, andthe system will penalize you asmentioned above in #4.

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6. BE CAUTIOUS “HELPING”OTHERS.

Ask yourself, why does this personneed help?

Do they need help getting started?

Do they need help because they have never

paid anyone?

If you really want to help your children,

educate them on how to properly use their

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7. BUY A CD AND SECURE A LOANWITH IT TO GET REESTABLISHED.

Start early, don’t wait until you need

a loan to get started.

 You can also do this with a secured

credit card, but……

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8. DO STAY CURRENT ON

EXISTINGING ACCOUNTS.

Like your mortgage and carpayments. One 30-day late

can cost you anywhere from30-125 points.

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9. IF FACED WITH A SITUATIONOUT OF YOUR CONTROL, BE

PROACTIVE.

Call your creditors andcommunicate with them. Many

times they will work with you.

Deferments, refinance, otheroptions.

Most would rather work with

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10. STAY ON TOP OF YOURMEDICAL INSURANCE!

Address any medical billing issuesimmediately.

Medical bills are the most commonitems that are reported derogatory.

A recent medical bill can be difficult toremove even if it is an error.