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Want to know how to improve your credit score? You're in the right spot. In terms of how to fix your credit, do it yourself credit repair is the best choice. This 4 part presentation will show you how to rebuild credit, how to raise your credit score, and even build credit from scratch. Learn about credit ratings, credit history, credit repair, what is a good credit score, what is a bad credit score, and so much more! - From Fix My Credit University www.fixmycreditu.com
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Part 1 – Understand
CreditCopyright
Fix My Credit University ™
WWW.FIXMYCREDITU.COM
Why You Need Good CreditIdentifying the need…
Why Your Credit Score Matters
Top 10 (in no particular order)
• Buying a home• Renting an apartment• Buying a car• Interest rates• Employment• Starting a business• Utilities• Marriage• Credit cards• PIECE OF MIND
Understanding CreditTerminology
Credit Score DefinedA three digit numerical value based on an assessment of one’s credit health, typically by a credit bureau.
Credit Score
Credit Grade DefinedA value (A – F) given to an individual which reflects their debt repayment patterns.
Credit Grade
FICO DefinedFICO provides analytics and decision making services, including credit scores, to help companies make complex financial decisions. FICO
(Fair Isaac Corporati
on)
Credit Bureau’s Defined
Companies that collect data from multiple sources and provide consumer credit information to individual consumers.- Equifax- TransUnion- Experian
Credit Bureau’s
Credit Institutions Defined
Companies that provide loans and lines of credit. - Banks / Credit Unions- Visa, Mastercard, AMEX, Discover, etc.- Student Loans / Auto Loans
Credit Institutio
ns
Credit Reporting Agencies Defined
Companies that provide individual consumers and businesses with credit scores. - FreeCreditReport.com- ScoreSense- Credit Report Place
Credit Reportin
g Agencie
s
Understanding CreditBasics
Credit Regulation
Federal law (US Code Title 15, §1681c) is in control of the behavior of credit reporting agencies (CRAs). The specific law is entitled: the Fair Credit Reporting Act (FCRA).
Credit Bureau’s
Equifax
• Highlights opened and closed accounts
TransUnion
• Contains a thorough employment history.
Experian
• Shows when an account is set to fall off your credit report.
Credit Reporting Process
FICO compiles analytics meant for
other companies to
use in decision making.
Experian, TransUnion, and Equifax use these
analytics to determine your
credit score and grade.
Credit reporting
services use the data from
Experian, TransUnion,
and Equifax to provide you with your
credit score.
Credit Score Factors
Credit ScorePayment History - 35%Amounts Owed - 30%Length of Credit History - 15%Types of Credit Used - 10%New Credit - 10%
Credit Grade
A
Credit Report CardA - F
Understanding CreditA Closer Look at Credit Grade Factors
Open Credit Utilization
Available Credit Used
Credit Grade / Score
Percent Of On Time PaymentsCredit History
On TimeLate
Average Age of Open Credit Lines
Average Age of Open Credit Lines
Open / Closed
accounts
How long they’ve
been open
Number of cards
Total Accounts
New lines of credit
Average age of open credit lines
Hard Credit Inquiries
Hard Credit Inquiries
Credit Grade / Score
Derogatory Marks
Derogatory Marks
Late Payments
Foreclosure
CollectionsBankruptcy
Lien
Civil Judgment
Understanding CreditA Closer Look at Credit Score Factors
Payment HistoryNumber of “paid as agreed” accounts
Number of delinquent accounts
Severity of the delinquent payments
Recency of the delinquent
payments
Amounts Owed
Amount of
credit
being
used
Total
available
credit
Below 30%
Length of Credit History
Time
Credit Repayment
Higher Credit Score
Number of Inquiries on Your Credit
More Credit Inquiries
Worse Credit Score
Types of Credit Used
Variety = Better
Credit Score
Credit Cards
Store Credit CardsLoans
New CreditNew
Credit Cards
Lowers
Average Age of
Open Credi
t Lines
Lowers Credit Score / Grade
Understanding CreditCredit Score Categories
Credit Score Categories
Excellent = 751 - 850Good = 701 - 750Fair = 641 - 700Poor = 576 - 640Very Poor = 300 - 575
Understanding CreditDebt vs. Income
Debt to Income Ratio
Total Recurring Debt
Gross
Income
Debt to Income Ratio
Aim to be
below 36%
Part 2…Action plans for fixing a credit score in disrepair.
• If you want a guide to hold your hand through the process of fixing your credit score, check out Fix My Credit, Build My Credit.
• Save money on expensive credit repair services and do it yourself!
WWW.FIXMYCREDITU.COM
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