Credit Education 201-Advanced Credit Score Education

with Blake Higgins and Susan McCullah

Today’s Agenda

Recap of Credit 101Different types of credit reports Score cards How delinquencies affect credit scores FICO 9.0 Q & A

Recap of Credit 101

Different Types of Credit Scores

and Reports

QUESTION????

I am sorry but your application has been denied, because your credit score is a 580.

WHAT??!! I just pulled my own

credit score yesterday and it was a 635!!

How could this happen??

FICO VANTAGE SCORECONSUMER

CREDIT SCORE

MORTGAGE

CREDIT

SCORE

AUTO CREDIT SCORE

•Mortgage Score•Auto Score•BankCard Score•Bankruptcy Risk Score•Insurance Risk Score•Generic Consumer Score

FICO

601-700Non-Prime

Vantage Score

901-990Super Prime

A

501-600High Risk

801-900Prime Plus

701-800Prime

BCDF

The VantageScore ranges from 501-990

A letter grade is assigned to your VantageScore

Industry Option Scores

FICO Mortgage—FICO Auto—FICO Bank Card

Have you ever had a mortgage

included in a bankruptcy

or foreclosure?

Have you ever had a car

repossessed?Have you ever been unable to fulfill a lease obligation to the original

terms?

Have you ever had a credit or bank card go into collection

status? Did you settle for less than the original

amount?

Example

Generic FICO 750

FICO Auto 740FICO Bankcard 764FICO Mortgage 763

Now that you know the different

types of credit scores, you can better explain

some of the subtle differences in

credit scores your customers may

encounter

Score Cards

Score Cards

Score Cards

Score Cards

Consumer Who Defaulted

Variables

Score Cards

Statistical Model

Score Cards

Score Cards

Large Number of Consumers…

With Similar Credit History

Score Cards

Score Cards

Thin Files

Derogatory Items

Bankruptcy

Long, Lengthy Credit History

3 Components

Characteristics

Variables

Weights

Remember

The weight the variables receive depends on the SCORE CARD the person lives on.

Score Card Hopping

Score Card Hopping

Meet Annie

Score Card Hopping

Annie had a bankruptcy years ago

…so she lives on the Bankruptcy

Score Card

Score Card Hopping

Since filing bankruptcy, Annie has

managed her credit wisely

…she pays her bills on time

Score Card Hopping

Since filing bankruptcy, Annie has

managed her credit wisely

…she keeps her credit card balance

low

Score Card Hopping

Since filing bankruptcy, Annie has

managed her credit wisely

…she rarely applies for new credit

Score Card Hopping

Since filing bankruptcy, Annie has

managed her credit wisely

…Annie is at the top of the group

Score Card Hopping

This helps Annie have a great credit

score

Score Card Hopping

Once Annie’s bankruptcy falls

off her credit report

…she moves to a different Score

Card

Score Card Hopping

Now, her credit may not look as

good

…since it’s being compared to a new

group

Score Card Hopping

Annie’s credit score could actually…

…DECREASE

Other Reasons For A Score Card Hop

Filing Bankruptcy

Other Reasons For A Score Card Hop

Having a collection hit your credit

report

Other Reasons For A Score Card Hop

One of your credit

cards reaches a

certain age

How Delinquencies Affect The Credit Score

QUESTION????

Delinquencies

The next chart shows FICO’s findings on the impact to credit scores following delinquencies.

*Estimates assume all else held consistent over time (e.g. no new account openings, no new delinquencies, similar outstanding debt).

Delinquencies

*Estimates assume all else held consistent over time (e.g. no new account openings, no new delinquencies, similar outstanding debt).

The next chart shows the estimated time it will take for

your FICO score to fully recover

Delinquencies

Points to Remember

The degree of impact on a FICO score depends on the starting point of the

credit score.

FICO 9.0Find out how the

new enhancements

could impact your credit score

FICO 9.0

FICO 9.0

3 Main Improvements

to FICO 9.0

FICO 9.0

MEDICAL DEBTS

will have a lesser negative

impact on consumer

credit scores

FICO 9.0

THIN FILES

A better calculation to determine credit worthiness for consumers with little credit history

FICO 9.0

PAID COLLECTIONS

wont hurt your credit scorelike before

FICO 9.0

Points to RememberFICO 9.0 retains the same numerical range of 300-850 as the previous FICO model

This new scoring model is NOT YET in use for

consumer or mortgage use

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THIS MEANS…..

We offer three exciting CreditXpert productsCredit Assure: Automatically scans the credit report on the front end for opportunities to raise the consumer’s credit score.

Credit Essentials: Determines the best actions to take to maximize an applicant’s credit scores, returning specific recommended actions.

What-if simulator: Powerfully simulates both pre-defined scenarios and custom scenarios, helping make informed decisions and uncovering new opportunities.

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Thank you for Attending!Coming soon: Trended data

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