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A great place to start is to first review your credit report. One way to do this is to pull
a copy of all three of your credit reports on www.AnnualCreditReport.com. This site
is free of charge, and you can access a free copy of your credit reports from Experi-
an, TransUnion, and Equifax once a year. It’s a good idea to review for any inaccura-
cies, and to see if there is anything reported that you may be unsure of. To get a free
look at your credit report more often, consider pulling only one report at a time.
Each report generally has the same information and if you look at a different one
every 4 months, you can see a credit report three times a year.
One good way to build credit is to obtain credit. A secured credit card is a great tool
for people with a limited credit history. Many credit unions offer these cards to ap-
plicants with no credit or bad credit. A secured card is backed by a deposit from the
applicant, which the credit limit is usually the same amount of the deposit. The mini-
mum deposit varies by bank but is generally at least $300. These cards work similar-
ly to a debit card, but the information is reported each month to the credit bureaus.
The best way to utilize these cards is to use them for smaller monthly expenses and
pay them off each month when the statement comes. It is important to make your
payments on time each month, as payment history accounts for 35% of your credit
score.
Credit utilization is also a major portion of your credit score. Keeping your balances
at 30% or less than your total credit limit helps your score. And avoid applying for
unnecessary credit cards since this results in a hard inquiry on your credit and can
bring your score down two or more points each time.
It takes time to build or rebuild credit, but it can be done.
Building Credit
CCCS of Rochester/RethinkingDebt Headquarters: 1000 University Ave, Rochester, NY 14607 **Fall 2018**
Inside this issue:
Building Credit 1
Retail Credit Cards 2
Student Loan Funding 2
Ultra FICO 3
CCCS Hours 3
Ask CCCS 4
Upcoming Workshops 4
Debt Settlement 5
By: CCCS of Rochester
Page 2
Should You Apply for a Retail Store Credit Card?
For starters, a retail store credit card is a physical charge card that gives you credit for a specific retailer. The amount of credit given can vary depending on your current credit score. More credit is usually given to those with higher credit scores and less credit is typically giv-en to applicants with lower credit scores. Not everyone is approved, but if you are there are pros and cons to keep in mind. Having a retail store credit card can be great financial tool. It can help build credit if you are at least making the minimum payment on time each month. Payment history is key in building and maintaining good credit. When you don’t have the funds available right away, using your retail card allows you to get the items you want sooner. For example, you might find a nice sweater that’s only on sale this week, but you get paid the week
after, so you use your credit card to make sure you take advantage of the sale. It gives a sense of instant grati-fication. You may even earn rewards or points that could turn into dis-counts or coupons for future purchas-es. At the same time, it is a great way to track your spending at that store. Keep in mind if you’re not careful, pros can turn into cons. There may be a sale on that nice sweater and you want one in every color. Your retail credit card can help
you get all those sweaters at once. Some people reach the maximum credit allowance and bask in the in-stant gratification, but then the ac-count will start to accrue interest if the balance isn’t paid in full by the due date. It’s been found that retail store credit cards typically have high-er interest rates than bank credit cards. If you’ve maxed out the card and now owe the interest, those sweaters begin to cost more than you thought. It’s important to keep a low balance on the credit card. It is rec-ommended that you shouldn’t use more than 30% of your credit limit. If you maintain a high balance and only pay the minimum amount due, your credit may not improve for a while. Be mindful that a retail credit card is supposed to be a tool to improve your score, not lower it.
Our student loan counseling funding
has been extended!
Consumer Credit Counseling Service
of Rochester is excited to announce
that our student loan funding has been
extended! From now until March 31,
2019, a grant allows us to help stu-
dent loan borrowers and their families
understand and take control of their
federal student loan payment options
for FREE.
There have been a few updates to our
process:
●Appointments must take place no
later than March 31, 2019
●Client must agree to follow up 3
months after the initial counseling
session.
●This grant ONLY covers federal
student loan debt. There will be a
charge if client needs assistance only
with private student loans.
●Upload of client info from the Na-
tional Student Loans Data Systems
must occur prior to appointment.
To get more information or to sched-
ule an appointment, please give us a
call at 585-546-3440 or visit our web-
site at www.cccsofrochester.org to-
day!
By: Kristina Perez, Disbursement Specialist
Student Loan Funding Extended
By: Robert Jacob, Client Support Supervisor
Page 3
Ultra FICO Score By: Karyn Rando, Director of Counseling Operations
Consumers with low credit scores
may soon have a way to boost that
three-digit number! A new product is
supposed to become available in
Summer 2019 and it will be geared
towards consumers with low credit
scores. Currently, potential lenders
use your credit report, which includes
your credit score and credit history, to
see if you have paid your mortgage,
personal loans, credit cards, and other
debts on time. Your credit score is
then calculated off of all your debts
and it’s broken down in five different
categories which include: Payment
history (35%), amounts owed (30%),
length of credit history (15%), new
credit (10%) and credit mix (10%) -
the different types of credit that you
have. Lenders use this information to
determine your credit risk and the
interest rate that you would be
charged, should they approve your
loan or credit card.
Here’s the change with regards to the
new scoring method, UltraFICO™.
UltraFICO™ will have a different
focus on your credit and will allow
you to show lenders your financial
behavior for areas that are not includ-
ed on a traditional credit report. Once
consumers opt in to the alternative
scoring method, their banking behav-
ior will be used to calculate their Ul-
traFICO™ score. These areas in-
clude:
●Length of time of their bank ac-
count being open
●Evidence of savings (an average of
$400 min. balance)
●The frequency of activity
●On-time and regular payments
The voluntary scoring method is in-
tended to boost the number of ap-
provals for credit card, personal loans
and other debt by considering the
consumers cash transactions (their
banking behavior), which may indi-
cate how likely they are to repay the
debt. Before enrolling, consumers
need to remember that they would be
sharing their sensitive checking and
savings account information and data.
For more information and to keep up
to date on when the new scoring
method will be rolled out to the pub-
lic, visit www.FICO.com/UltraFICO
CCCS Of Rochester Business Hours
CCCS of Rochester has recently changed some of its hours of operation.
Customer Service Hours-
Monday-Thursday- 9am-8pm
Friday– 9am-5pm
Counseling Hours-
Monday-Thursday– 8am-8pm
Friday– 9am-5pm
Some Saturdays- 9am-1pm
Please call 585-546-3440 if you want to schedule an appointment or to get more information.
Page 4
Ask CCCS
A popular question we’re asked from clients involves questioning the ac-curacy of the information on their credit report. The potential negative impacts those errors can have on your credit report can be disastrous for your ability to get loans, new lines of credits, or better lending terms and interest rates.
Staying on top of the content of your credit reports is very important. We will discuss some of the most com-mon mistakes found in credit reports and how to fix them.
Common mistakes that cause credit report errors include:
Errors in entering your name or ad-dress information from an applica-tion.
Loan or credit card payments may have been inadvertently applied to the wrong account.
Lenders seeing double because ac-counts have been reported more than once, making it appear you have more open lines of credit or higher debt than you have.
If you closed a credit account, make sure that your report does not reflect that it was "closed by grantor”.
Make sure that your former spouse's debts are not reflected on your re-port.
To ensure mistakes are corrected as quickly as possible, contact both the credit bureau and organization that provided the information to the bu-reau. Both these parties are responsi-ble for correcting inaccurate or in-complete information in your report under the Fair Credit Reporting Act.
Credit bureaus must investigate the item in question-usually within 30 days. Make sure to include copies of documents that support your posi-
tion. In addition, provide your com-plete name and address. Your com-munication also should:
Clearly identify each disputed item in your report.
State the facts and explain why you dispute the information.
Request deletion or correction.
If mailing a letter, send it by certified mail, return receipt requested, so you can document that the credit bureau did, in fact, receive your correspond-ence. Expect this process to take be-tween 30 and 90 days.
If you tell the information provider that you dispute an item, a notice of your dispute must be included any-time the information provider reports the item to a credit bureau while that dispute is being investigated.
Finally, if the investigation does not produce the results you feel are cor-rect, and inaccurate information in your credit report is causing you harm, you may consider hiring a lawyer to help resolve your dispute as a last resort.
By: Elaine Rodriguez, Client Support Representative
Upcoming Workshops
January 8– 6-7pm– Budgeting/ Credit Report– free
January 26– 9a-3p– First Homebuyer Education- $40
February 9– 9a-3p– First Homebuyer Education- $40
March 3– 9a-3p– First Homebuyer Education- $40
March 12– 6-7:30p– Exploring Homeownership– free
Registration is required for all workshops. Visit our website at www.cccsofrochester.org/events/calendar or call 585-546-3440 to register.
Page 5
What is Debt Settlement?
To put it very simply, debt settle-ment companies get your creditors to agree to forgive some of your debt. However, their services can be ex-pensive and there may be significant unforeseen consequences. Until re-cently, debt settlement companies were not regulated by the Federal Trade Commission. Some of their practices may be fraudulent and ille-gal.
●Look out for substantial fees, possi-ble lawsuits & damage to your credit score.
Debt settlement companies typically charge a large up-front fee and monthly fees for their services. If you can't pay the up-front fee in full, they will set-up an installment plan. They might tell you to stop making debt payments and stop communi-cating with your creditors. However, their negotiations with your creditors may not begin until the up-front fee
is paid in full. In the meantime, your creditors may sue you to collect the debt. If they win, they have the right to garnish your wages or put a lien on your home. These actions nega-tively impact your credit score.
●Be aware - forgiven debts are taxa-ble income
The difference between the amount you originally borrowed, and the settlement amount is added to your income for taxation by the Internal
Revenue Service. You should con-sider this tax liability when you are weighing the costs and benefits of a debt settlement contract.
●Do it yourself
Debt forgiveness is not a new con-cept. There's no need to hire a com-pany to handle the transaction. With a little negotiation skill, you can set-tle your debts by yourself. Simply contact your creditor and make a proposal.
Some debt settlement companies provide legitimate services, but you should be very careful in choosing a debt settlement company.
Consumer Credit Counseling Service
of Rochester provides debt manage-
ment services. Debt management is
very different from debt settlement.
See the chart below for comparisons.
Debt Settlement vs CCCS Debt Management
DEBT SETTLEMENT
Little or no regulation
Debtor pays < 100% of their debt
Large fee paid up front
Recommend clients withhold payments from creditors
Client's credit score adversely affected
Income tax obligation for amount forgiven in settle-ment
Little client support
No Guarantees of success
For Profit companies
CCCS of ROCHESTER
Licensed by the NYS Dept. of Financial Services, EOUST and HUD
Debtor Pays 100% of amount owed
Small fee paid monthly
Monthly payments to creditors start immediately
No direct effect on credit score - timely payments im-prove score over time
No income tax obligation
Strong client support
49 years of successful debt management counseling
Not for profit agency
Non-Profit Org
US Postage
PAID
Rochester, NY
Permit NO. 986
Toll Free Phone: 1-888-724-2227
Email: [email protected]
Headquarters: 1000 University Ave., Suite 900 Rochester, NY 14607 Phone: (585) 546-3440 Fax: (585) 546-5693 Toll Free- (888) 724-2227
This newsletter is a publication of CCCS of Rochester/ RethinkingDebt, a Not-for-Profit agency. It is a source of information for clients, sponsors, representatives of the credit industry, and the service networks supportive of our mission and vision.
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