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8/14/2019 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.