Financial Planning for Financial Planning for Women Women

Christine Ballard, Jessica OkeyChristine Ballard, Jessica Okey Family Life Center Housing and Financial Family Life Center Housing and Financial

Counseling CenterCounseling Center

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Housing & Financial Counseling Center

493 N. 700 E. LoganAt the bottom of Old Main Hill

435-797-7224

Family Life CenterFamily Life Center

Power PayPower Pay

www.powerpay.org Stop borrowing or charging until debts are Stop borrowing or charging until debts are

paid offpaid off Make power payments. As one debt is paid Make power payments. As one debt is paid

off, move that payment to another debt off, move that payment to another debt rather than spending it on something else. rather than spending it on something else.

Saves money in interest and pays debts Saves money in interest and pays debts faster. faster.

CREDIT HISTORIESCREDIT HISTORIES

What are the three major credit bureaus?What are the three major credit bureaus? TransUnion, Equifax, ExperianTransUnion, Equifax, Experian

Where can you get your free credit report Where can you get your free credit report each year?each year? www.annualcreditreport.com

Who can look at your credit report?Who can look at your credit report? Employers, creditors, insurance companies, Employers, creditors, insurance companies,

government agencies, landlords, YOU.government agencies, landlords, YOU.

What is a credit history?What is a credit history?

Definition:Definition:

A continuing record A continuing record of a borrower’s debt of a borrower’s debt commitments and commitments and how well they have how well they have been honored.been honored.

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How do you build a credit How do you build a credit history?history?

Time and good behaviorTime and good behavior Start with a low limit credit cardStart with a low limit credit card Small loanSmall loan Pay on timePay on time Use less than 30% of your credit limit. (10% Use less than 30% of your credit limit. (10%

recommended)recommended) Pay off student loansPay off student loans ““You don’t have to carry over a balance, but You don’t have to carry over a balance, but

you do need to use it.” you do need to use it.” –Rod Griffin, Experian–Rod Griffin, Experian

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Other ways if you can’t Other ways if you can’t get creditget credit

Try a co-signerTry a co-signer Try a secured credit card – make sure Try a secured credit card – make sure

they report to a credit bureauthey report to a credit bureau Document proof of paying rent, utilities, Document proof of paying rent, utilities,

insurance, etc. as an alternative form of insurance, etc. as an alternative form of creditcredit

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Fair and Accurate Credit Fair and Accurate Credit Transactions Act 2003Transactions Act 2003

Gives every consumer the right to their Gives every consumer the right to their credit report free of charge every year.credit report free of charge every year.

Creates a national system of fraud Creates a national system of fraud detection.detection.

Annual Credit ReportAnnual Credit Report

The central site to request a The central site to request a freefree credit credit report once per year per credit bureau report once per year per credit bureau including Experian, TransUnion, and including Experian, TransUnion, and Equifax:Equifax:

www.annualcreditreport.com

Three Major Credit Three Major Credit BureausBureaus

EXPERIANEXPERIAN

www.experian.com

888-EXPERIAN (397-3742)888-EXPERIAN (397-3742)

EQUIFAXEQUIFAX

www.equifax.com

800-685-1111800-685-1111

TRANS UNIONTRANS UNION

www.transunion.com

800-888-4213800-888-4213

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Who Can Look at Your Credit Who Can Look at Your Credit Report?Report?

1.1. Creditors – new and currentCreditors – new and current

2.2. Employers & prospective employersEmployers & prospective employers

3.3. Insurance CompaniesInsurance Companies

4.4. Government AgenciesGovernment Agencies

5.5. Anyone else with a legitimate business Anyone else with a legitimate business reason (ie. landlords)reason (ie. landlords)

6.6. YouYou

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What is in a Credit What is in a Credit Report?Report?

1.1. Identifying informationIdentifying information

2.2. Credit informationCredit information

3.3. Public record informationPublic record information

4.4. InquiriesInquiries

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What you need to look atWhat you need to look at

Potentially negative items: zero is goodPotentially negative items: zero is good Open accounts: close any you aren’t Open accounts: close any you aren’t

usingusing Status of accounts: open/never late is Status of accounts: open/never late is

good. May show closed, past due, maxed good. May show closed, past due, maxed out limit etc. out limit etc.

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Likelihood of ErrorsLikelihood of Errors

79% of all individual credit files contain 79% of all individual credit files contain mistakes (typos, incorrect dates, data mistakes (typos, incorrect dates, data entry errors)entry errors)

25% contain serious mistakes that may 25% contain serious mistakes that may cause credit denial cause credit denial

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Find wrong information?Find wrong information?

Contact credit bureauContact credit bureau It will come off if it’s not yoursIt will come off if it’s not yours

Is it your mistake? Is it your mistake? Spouse could have taken on debtSpouse could have taken on debt Company name is different than you Company name is different than you

recognizerecognize

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Find Wrong Information? Find Wrong Information?

Can write 100 word explanation that goes Can write 100 word explanation that goes out with credit report. out with credit report.

Example: Business went Example: Business went bankruptbankrupt

Information falls off after 7 years, 10 Information falls off after 7 years, 10 years for bankruptcyyears for bankruptcy

Top Reasons for Bad Top Reasons for Bad CreditCredit

Job lossJob loss

Separation or divorceSeparation or divorce Previous bankruptcyPrevious bankruptcy Maxed out cardsMaxed out cards IllnessIllness

Tax liensTax liens Bounced checksBounced checks Victim of crime or Victim of crime or

fraudfraud OtherOther

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Top Reasons for Credit Top Reasons for Credit File ProblemsFile Problems

Late or missed Late or missed paymentspayments

Delinquent items Delinquent items now paid not now paid not removedremoved

BankruptcyBankruptcy CollectionsCollections Family members with Family members with

similar namessimilar names

All cards or leases All cards or leases are not listedare not listed

Incorrect information Incorrect information on fileon file

Too many credit Too many credit inquiriesinquiries

Victim of FraudVictim of Fraud

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Credit ScoreCredit Score

G.P.A is for report card…G.P.A is for report card… FICO=Fair Isaac CompanyFICO=Fair Isaac Company

Scores range from 300-900Scores range from 300-900 Average is 678Average is 678 Most scores are in the 600s-700sMost scores are in the 600s-700s

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FICO ScoreFICO Score

Score is based on:Score is based on: Payment history (35%)Payment history (35%) Outstanding loan balances (30%)Outstanding loan balances (30%) Length of credit history (15%)Length of credit history (15%) Inquiries (10%)Inquiries (10%) Types of credit (10%)Types of credit (10%)

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Warning Signs of identity Warning Signs of identity TheftTheft

Not receiving credit card or bank Not receiving credit card or bank statementsstatements

Denied credit for no apparent reasonDenied credit for no apparent reason Getting bills from companies you don’t Getting bills from companies you don’t

recognizerecognize Credit collection agencies collecting on Credit collection agencies collecting on

debts that don’t belong to you debts that don’t belong to you

What to do if you are a What to do if you are a victimvictim

Place a fraud alert on your credit reportPlace a fraud alert on your credit report Close accounts that you know or believe Close accounts that you know or believe

someone has tampered with or opened someone has tampered with or opened fraudulentlyfraudulently

File a report with local policeFile a report with local police File a complaint with FTCFile a complaint with FTC

Be Aware of ScamsBe Aware of Scams

Debt reliefDebt relief Relief may come from filing for bankruptcyRelief may come from filing for bankruptcy This is considered a last resort, stays on This is considered a last resort, stays on

credit report for 10 years!credit report for 10 years!

Credit repair scamsCredit repair scams Claims to repair your credit are just not true. Claims to repair your credit are just not true. Only time, effort and a plan to repay your Only time, effort and a plan to repay your

debt will improve your credit report. debt will improve your credit report.

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Have you learned Have you learned anything?anything?

Q: How do you dispute wrong information on your Q: How do you dispute wrong information on your credit report?credit report?

A: Contact Credit Bureau. They will research this A: Contact Credit Bureau. They will research this and if it’s not yours, they have to take it off. and if it’s not yours, they have to take it off.

Q: What is the estimated percentage of credit Q: What is the estimated percentage of credit reports that have wrong information on them?reports that have wrong information on them?

A: 79%. 29% of these errors can result in a denial A: 79%. 29% of these errors can result in a denial in credit. in credit.

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Have You Learned Have You Learned Anything?Anything?

Q: What is one thing you can do yourself to Q: What is one thing you can do yourself to increase your credit score?increase your credit score?

A: Pay bills on time, correct errors, give it time. A: Pay bills on time, correct errors, give it time. Lenders want to see at least 2 years of good Lenders want to see at least 2 years of good history.history.

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Upcoming FPW programsUpcoming FPW programs

August 13 Property InsuranceAugust 13 Property Insurance Local insurance agent Jane Larsen will Local insurance agent Jane Larsen will

discuss home and auto insurancediscuss home and auto insurance

September 10September 10 Late Savers Retirement Guidebook Late Savers Retirement Guidebook

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