Credit Scores and Credit Reports –Credit Scores and Credit Reports –How the System Really Works, How the System Really Works,

What You Can DoWhat You Can Do

Sue Woodard – Mortgage Market Guidewith

Credit Expert Evan Hendricks

Evan Hendricks

• Author of Credit Scores and Credit Reports – How the System Really Works, What You Can Do

• Regular Presenter at Federal Trade Commission Trade Workshops

• Qualified at Federal and State Levels as Expert on Identity Theft Court Cases

Credit Score Model

• Scores are Somewhat Counter Intuitive

• 30% Based on Balance to Limits– Individually and Cumulatively– Balances Normally Reported Month End

• Closing Accounts Could Hurt Scores

• Recent Negative Information Damaging– Paying Off Five Year Old Charge Off Becomes

Recent and Could Damage Credit Rating

What Can Consumers Do?

• Difficult To Get Permanent Removal of Info

• Keep Balances Low to Limits

• Some Credit Issuers Don’t Issue Limits– Dispute All Bureaus to Get Issuer to Report

• Monthly Accounts Like American Express Will Demonstrate High Balance Over Time

• Review Personal Credit Reports Regularly

Annual Credit Reports

• New Federal Law Provides for Annual Credit Reports– www.annualcreditreports.com– Available Annually, Quarterly

• Unlike Fee Based “Free” Credit Report Services

• Mortgage Professional Can Supply Credit Reports for Review

Rapid Re-Score• Independent Credit Re-Sellers Can Provide

Updated Scores Based on Corrected Information

• Most Re-Sellers Part of NCRA or National Credit Reporting Associationwww.ncra.org

• Potential Increases of 20-100 Points

• Cost Ranges From $75 to Several Hundred Dollars Based on Trade Lines Involved

Credit Repair Companies

• Veracity Credit – Denver

• Credit Resource Corp. – L.A.

• Companies Specialize in Removal

• Fees Vary – Set Up Fees plus Monthly Maintenance Fees

Credit Repair Tactics

• Disputes Must Be Answered Within 30 Days – “Bombardment” Method Sometimes Yields Results

• If Accounts Shown as Disputed – Removed From Score Models Till Resolved

• Credit Grantors Can Provide Quicker Response Than Credit Reporting Agencies

• Always Get Name, Extension, Expected Date of Reported Change, Request Faxed & Signed Acknowledgement

Identity Theft

• Fastest Growing White Color Crime

• Can Drive Score From 700+ to 580

• Time Consuming To Resolve

• Costs Incurred Can Be Extensive

What’s a Consumer To Do

• Check Report Regularly

• Be Aware of Inquires From Out of Area

• Credit History Shows Incorrect Accounts, Collections, Charge-Offs

• Dispute With Grantor Immediately– Resolve Your New Part-time Job– File Fraud Alert, Police Report or Fraud Affidavit– Put Account Name and Account Number On It

It May Not Be Over Yet

• Consumer May Have To File Suit

• www.naca.net National Association of Consumer Advocates

• Use for Recovery of Attorney’s Fees if Needed To Right Report

What About Inquiries?

• You Can Shop for 45 Days With a Hard Inquiry, Mortgage Auto, etc.

• Inquiries Pulled From Consumer Do Not Count Against Them

Who Else Wants to Know Your Score?

• Employers View Credit Reports as Inexpensive Background Checks

• Insurance Industry – If Under Financial Stress You May Be More Prone to Cause Loss For Insurance Company – Increase Rates

• Mortgage Insurance Premiums Can Be Impacted by Scores, Positively or Negatively

Invest In Your Clients

• Direct Clients to Free Site for Annual Review

• www.annualcreditreport.com

• Everyone Entitled to Free Report By September 1, 2005

• Site Contains Valuable Information for Client Mailings

Credit Scores and Credit Reports –How the System Really Works,

What You Can Do

• Second Edition Benefits – Includes Information on Companies Not Reporting Total Information

• One Credit Bureau Doesn’t Always Report Total Information

• Updated Identity Theft and Credit Repair Chapter Information

• Includes Information on Good Credit Repair Companies

How To Get Book• Discounted Price For Case Purchase –

Save $250.60 per Case of 28 Books

• Evan@privacytimes.com

• www.privacytimes.com

• Phone: 301-229-7002