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Building a Better Financial Future

CreditSmart® Training for New Instructors

SESSION #2 – Building, Maintaining and Restoring Your Credit

June 14, 2016

Freddie Mac®

Get to Know Your ProducerAsha WatsonCommunity Outreach Professional, Freddie Mac

• Watson started her Freddie Mac Career as the Multifamily Administrative Coordinator in Freddie Mac’s Chicago office in 2006, then relocated to headquarters in Virginia in 2011 to work for Community Outreach within the Freddie Mac Foundation. She recently celebrated 10 years of service and is currently a part of the Human Resources, Talent Management & Organizational Effectiveness Division where she helps to implement the Freddie Mac Community Crew’ corporate volunteer program (#FreddieMacCrew).

• Her primary responsibilities include; organizing corporate donation drives; managing the volunteer experience in the five regional offices; planning community outreach strategy for nine Employee Resource Groups; supporting the semi-annual SERVE: Call-to-Action campaigns and our CreditSmart® Volunteer Program (CSVP); as well as managing the J.C. Nalle Community School (SE Washington, DC) business/school partnership.

• Asha is also the President / Executive Director of a nonprofit organization that empowers young women in Manassas, VA. An entrepreneur, writer, public speaker & poet. She earned the Freddie Mac Employee Excellence certificate in 2013, the Community Engagement Professional Certification from NeighborWorks America Institute in 2014

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Get to Know Your PresenterCora R. Fulmore• Manager/Owner of the Mortgage & Credit Center

and The Counselor’s Corner, Inc.

• More than 35 years of experience in mortgage &

credit counseling

• Organizer of the first Florida Housing Counselors

Network

• National Consultant for NeighborWorks since 1994;

provide training in the area of:

• Certification for ED’s and Program Managers

• Housing Counseling Certification

• Foreclosure Prevention

• Credit Counseling

• Certified CreditSmart® trainer since 2001Freddie Mac® 3

Call In Information

CreditSmart® New Instructor Training

Toll Number: 1 (914) 614-3221

Access Code: 159-590-717

Webinar ID: 127-803-707

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GoToWebinar Platform

To avoid feedback noise:

If you are using a

landline or cell phone,

please make sure that

your phone is on mute.

If you are using the

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computer, click that

option here.Freddie Mac® 5

520-771-779

How to Participate

• Use the question box to ask

questions

• Always, select “ALL

PARTICIPANTS”

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520-771-779

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How to Participate

• Handouts

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4-Part Series + Bonus Class

• SESSION #1 – CS Introduction and Money Management Basics

Tue, June 7, 2016 2:00 PM - 3:30 PM EDT

• SESSION #2 – Building, Maintaining and Restoring Your Credit

Tue, June 14, 2016 2:00 PM - 3:30 PM EDT

• SESSION #3 – Thinking like a lender and Avoiding credit traps

Tue, June 21, 2016 2:00 PM - 3:30 PM EDT

• SESSION #4 – Preparing for Homeownership and Avoiding Foreclosure

Tue, June 28, 2016 2:00 PM - 3:30 PM EDT

• BONUS CLASS - Super Charging your Credit Counseling Program

Tue, July 5, 2016 2:00 PM – 3:30 PM EDT

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CERTIFICATE ISSUED ONCE YOU HAVE TAKEN AND PASSED

10 QUESTION EXAM AFTER THE FINAL SESSION

*YOU MUST ATTEND ALL 4 SESSION*Freddie Mac®

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Homework Assignment Review

1. Go to to

check out CreditSmart Online Consumer Program, share with your

colleagues

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http://www.freddiemac.com/creditsmart/consumer_training.html

Freddie Mac®

Homework Assignment Review

1. Go to to

check out CreditSmart Online Consumer Program, share with your

colleagues.

2. Go to to review the Financial

Capability Study.

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http://www.freddiemac.com/creditsmart/consumer_training.html

http://www.usfinancialcapability.org

FINRA Investor Education Foundation

Council for Economic Education

http://www.usfinancialcapability.org/downloads/NFCS_2012_Report_Natl_Findings.pdf

http://www.councilforeconed.org/policy-and-advocacy/survey-of-the-states/#video

http://www.surveyofthestates.com/#state-of-financial-and-economic-programs-across-

the-nation

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http://bankingjournal.aba.com/2016/01/study-millennials-have-high-debt-burden-low-financial-capability/

Homework Assignment Review

1. Go to to

check out CreditSmart Online Consumer Program, share with your

colleagues

2. Go to to review the Financial

Capability Study.

3. What is the Personal Savings Rate for your state?

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http://www.freddiemac.com/creditsmart/consumer_training.html

http://www.usfinancialcapability.org

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Homework Assignment Review

1. Go to to

check out CreditSmart Online Consumer Program, share with your

colleagues

2. Go to to review the Financial

Capability Study.

3. What is the Personal Savings Rate for your state?

4. Create an activity that could be used for one of the modules

presented today. The activity should engage the audience. The

activity can be as simple as a 2 minute presentation.

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http://www.freddiemac.com/creditsmart/consumer_training.html

http://www.usfinancialcapability.org

Freddie Mac®

Learning ObjectivesAs Trainers:

• Evaluate multiple teaching techniques

• How to teach the value of good credit

• What are the factors of the FICO scoring model

• How to use various teaching method to introduce content

• “Bright Ideas” and best practices

As Learners:

• Industry updates

• The basic components of a credit report

• How information is captured by the repositories

• Credit scoring models

• Identify ways to improve ones credit score

• What laws protect consumers

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Learner Trainer

Two Hats

60% 40%

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Module 1: Your Credit & Why It Is Important

Module 2: Managing Your Money

Module 3: Goal Setting

Module 4: Banking Services, An Important Step

Module 5: Establishing & Maintaining Credit

Module 6: Understanding Credit Scoring

Module 7: Thinking Like a Lender

Module 8: Avoiding Credit Traps

Module 9: Restoring Your Credit

Module 10: Planning for Your Future

Module 11: Becoming a Homeowner

Module 12: Preserving Homeownership: Protecting Your Home

Investment

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Invisible Credit Files• CFPB reports 26 million consumers

have credit invisible files

• 19 million consumers have unscored

credit records

• Consumers in low-income

neighborhoods are more likely to be

credit invisible or to have an

unscored record

• Black and Hispanic consumers are

more likely to have limited credit

records

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There are many credit myths – so let’s take the

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Credit Quiz

Discussion Question – 1

1. Which Act gives all Americans the right to request a free copy

of his or her credit report annually?

a) Fair Credit Billing Act (FCBA)

b) Fair Credit Reporting Act (FCRA)

c) Fair and Accurate Credit Transactions Act (FACT Act)

d) Fair Debt Collection Practices Act

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Discussion Question – 1

1. Which Act gives all Americans the right to request a free copy

of his or her credit report annually?

a) Fair Credit Billing Act (FCBA)

b) Fair Credit Reporting Act (FCRA)

c) Fair and Accurate Credit Transactions Act (FACT Act)

d) Fair Debt Collection Practices Act

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Why?

• The Fair and Accurate Credit Transaction (FACT) Act of 2003

gives all Americans the right to request a free copy of his or her

credit report annually from each of the three main credit-reporting

bureaus via Web, phone, fax or mail. Those bureaus are

TransUnion, Experian, and Equifax.

• Because creditors may report information to only one of the three

main bureaus, each report may include different information. Be

sure to check all three reports for outdated data or inaccuracies.

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Discussion Question – 2

2. My credit score takes a hit every time it’s checked?

a. True

b. False

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Discussion Question – 2

2. My credit score takes a hit every time it’s checked?

a. True

b. False

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Why?

• Credit Report pulls are classified as either “hard” or “soft.”

• Hard pulls have a negative impact on the score. These are pulls

generated through an inquiry for a retail credit card or a lender

application for loan approval.

• Soft pulls have no impact on the credit score. Soft pulls are from

inquires that are initiated by the consumer.

• Checking your own credit score, has no impact on your credit

score.

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Discussion Question – 3

3. You can include a 100-word statement on your credit report.

a) True

b) False

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Discussion Question – 3

3. You can include a 100-word statement on your credit report.

a) True

b) False

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Why?

• Consumers have the right to include a brief statement on their

credit report that will be viewable to anyone who accesses it.

They can use the statement to indicate if they have been a

victim of fraud or if they are in the process of correcting

inaccurate data on their report. The statement usually remains

on the report for two years unless the consumer request to

have it removed sooner.

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So What’s

Contained In a Credit Report

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Not all formats are the same

But all formats

provides the same

basic information.

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Check for Inaccuracies

• Credit reports are divided into 4 sections:

Identification

Credit history/trade-lines

Public records

Inquiries

• Have your client thoroughly review each section of the report for inaccuracies.

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Payment/Credit History

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24 months.

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Type of Account

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Section 605(a)(4)

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https://www.ftc.gov/policy/advisory-opinions/advisory-opinion-amason-02-15-00

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Obsolescence Period

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https://www.ftc.gov/policy/advisory-opinions/advisory-opinion-amason-02-15-00

Calculating the 7-year period

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https://www.ftc.gov/policy/advisory-opinions/advisory-opinion-amason-02-15-00

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Reason Codes

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Highest

Lowest

Interactive credit score map:

Median FICO Score 8 by stateAPRIL 9, 2015

In the name of Financial Literacy Month, we had a little fun with some FICO Score data! While where you live is not considered in the calculation of your FICO® Scores, it's still interesting to compare FICO Score trends across the 50 states. The median FICO® Score 8 for the entire U.S. is 713

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• Credit Scores are

fluid.

• As information

changes the score

changes

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Discussion Question – 4

4. What has the highest impact on your credit score.

a. The type of credit in use

b. The number of credit cards in my file

c. My payment history

d. The number of calls I receive from a credit grantor

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Discussion Question – 4

4. What has the highest impact on your credit score.

a. The type of credit in use

b. The number of credit cards in my file

c. My payment history

d. The number of calls I receive from a credit grantor

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Discussion Question – 4

4. What has the highest impact on your credit score.

a. The type of credit in use

b. The number of credit cards in my file

c. My payment history - represents 35% of the score

d. The number of calls I receive from a credit grantor

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Discussion Question – 5

5. Will paying off my credit cards and closing out the account

improve my credit score?

a. Yes

b. No

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Discussion Question – 5

5. Will paying off my credit cards and closing out the account

improve my credit score?

a. Yes

b. No

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Why?

• When you close a credit card with a balance, your total available

credit and credit limit are reported as $0.

If you still have a balance on that account with no credit limit, it looks

like you’ve maxed out.

A maxed out credit card, or one that appears to be maxed out, can

have a very negative impact on your credit score since your level of

credit card debt, including your credit to credit ratio, is 30% of your

credit score.

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6. How often can my credit score change in a month?

a. At the end of the month on the 30th

b. On the 15th of the month

c. As often as information changes in the file

d. None of the above

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Discussion Question – 6

6. How often can my credit score change in a month?

a. At the end of the month on the 30th

b. On the 15th of the month

c. As often as information changes in the file

d. None of the above

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Discussion Question – 6

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The Credit Score Competition Act

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http://www.trulia.com/blog/new-credit-score-rating-system/?ecampaign=con_cnews_digest&eurl=www.trulia.com%2Fblog%2Fnew-credit-score-rating-system%2F

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Trended & Alternative Data

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http://blog.transunion.com/category/trendeddata/

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Source: myfico.comCost: $59.00 for three reports

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Module 1: Your Credit & Why It Is Important

Module 2: Managing Your Money

Module 3: Goal Setting

Module 4: Banking Services, An Important Step

Module 5: Establishing & Maintaining Credit

Module 6: Understanding Credit Scoring

Module 7: Thinking Like a Lender

Module 8: Avoiding Credit Traps

Module 9: Restoring Your Credit

Module 10: Planning for Your Future

Module 11: Becoming a Homeowner

Module 12: Preserving Homeownership:

Protecting Your Home InvestmentFreddie Mac® 84

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What’s wrong with this picture?

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§ 605. Relating to information contained in consumer

reports [15 U.S.C. § 1681c]

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Public Records

• There are three types of public records that can appear in your credit report:bankruptcy Chapter 7 or

Chapter 13 civil judgments tax liens

RESOURCE: http://www.nclc.org Freddie Mac® 90

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Sample Dispute Letter

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Sample Dispute Letter, Cont’d.

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Sample Dispute Letter, Cont’d.

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Education Techniques

• Maintain an informal atmosphere

• Act as a facilitator - not the expert

• Relate the material to real life situations

• Post the AGENDA and refer to it

• Incorporate a variety of training materials and

techniques

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• Build on earlier statements

• Encourage sharing & discovery

• Give participants time to evaluate their learning

• Maintain a setting of trust

• Be yourself and have FUN

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Education Techniques

Bright Ideas

• Use “show-and-tell” items or props to make examples

more real and relatable

What “show-and-tell” props did I use?

• Provide tools to assist in applying new knowledge

What tools did I use to reinforce points made?

• Test progress and check for understanding

What did I use to test your understanding?

• Share a story of hope or inspiration

What story did I share to give hope and/or inspiration?

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Homework Assignment

• Pull a copy of your credit report for review.

• Save all pre-approved offers between now and the final

class.

• What is the median credit score in your state.

• How many Federal Consumer Protection laws are

there?

• Review CreditSmart® Modules 4,7, and 8

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Final Business

• Thank you for your contributions to today’s presentation

• Direct all questions to robin.stout.migala@gmail.com

• See you on Tuesday, June 21st for Session 3

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