Credit Money Matters workshop sponsored by the Kansas City Public Library What you will learn What is a FICO Score How to review a credit report How to improve your credit Choosing a credit card Latoya Woods Womens Employment Network p8165951302 email lwoodskcwenorg ID: 769693
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Credit Money Matters workshop sponsored by the Kansas City Public Library
What you will learn What is a FICO Score How to review a credit report How to improve your creditChoosing a credit card Latoya Woods Women's Employment Network p:816-595-1302 email: lwoods@kcwen.org
Myths About Credit Bad credit is beyond repair Credit can be repaired quickly Credit cards are the fastest way to bad creditI have no need for credit Latoya Woods Women's Employment Network p:816-595-1302 email: lwoods@kcwen.org
What Is Credit? The ability to borrow money Revolving Credit Installment Credit Latoya Woods Women's Employment Network p:816-595-1302 email: lwoods@kcwen.org
Four Cs of Credit Capacity- How long have you held the same employment; income stability Capital- Manage your money; what assets do you have Character- Past credit behavior Collateral- Secure your loan Latoya Woods Women's Employment Network p:816-595-1302 email: lwoods@kcwen.org
Choosing a Credit Card Credit Card Agreement Annual percentage rates (APR) for: PurchasesBalance transfers Cash advancesPenalty APR, and when it appliesFees, such as annual feesGrace period, if there is oneComputing your balance Latoya Woods Women's Employment Network p:816-595-1302 email: lwoods@kcwen.org
Credit Score Is a number that summarizes your credit risk, based on a snapshot of your credit report at a particular point in time Mathematical formula Impact of credit scoresRent/Shelter Deposit (cell phone and utilities)EmploymentPay for credit Latoya Woods Women's Employment Network p:816-595-1302 email: lwoods@kcwen.org
Scoring Models FICO Fair Isaac Corporation Model that is used by most lenders Easier to get loansFair Scoring range 300- 850 Vantage Fairly new (2006) Model created by the 3 credit bureaus Single score for all three bureaus Scoring range: 300-850 Latoya Woods Women's Employment Network p:816-595-1302 email: lwoods@kcwen.org
Scoring Models Payment History (35%) Whether a credit account has been paid on time. Amounts Owed (30%) How much debt is owed and if you are overextended. Length of credit history (15%) Long term positive credit relationships show good credit management. New Credit (10%) Asking for multiple credit accounts in a short period is a sign of financial strain. Type of credit (10%) Having both credit cards and loans being paid on-time shows your money management skills. Latoya Woods Women's Employment Network p:816-595-1302 email: lwoods@kcwen.org
FICO Scores 800 or Higher 20% of U.S. consumers Demonstrate to lenders that the consumer is an exceptional borrower 700 to 799 Demonstrate to lenders that the consumer is a very dependable 670 to 739 FICO scores are near average Considered by lenders to be good scores 580 to 669 The lowest 40% Lenders will approve credit applications within this score range Lower than 580 The lowest 20% Lenders consider the consumer to be risky Latoya Woods Women's Employment Network p:816-595-1302 email: lwoods@kcwen.org
Credit Report A credit report is a record of your credit activities 3 Credit Bureaus TransunionExperianEquifax Free Credit Reportwww.annualcreditreport.com Latoya Woods Women's Employment Network p:816-595-1302 email: lwoods@kcwen.org
Credit Report Additional Credit Reports Unemployed and plan to look for employment in the next 60 days Receiving public assistanceHave been the victim of fraud, including identity theft Have had adverse action taken because of information in your credit reportLatoya Woods Women's Employment Network p:816-595-1302 email: lwoods@kcwen.org
Credit Report Review 5 sections of a credit report Header/Personal information Public RecordCollection agency account informationCredit account informationInquiries made to your account Latoya Woods Women's Employment Network p:816-595-1302 email: lwoods@kcwen.org
Header This includes your name and current address, as well as other identifying information, like your SSN, Date of Birth, and places lived. Name Jennifer Doe Date of Birth xx/xx/ xxxx Social Security Number 000/00/0000 Current Address 920 Main Street Kansas City Mo 64105 Latoya Woods Women's Employment Network p:816-595-1302 email: lwoods@kcwen.org
Public Records Public record of a financial record including bankruptcies, judgements, and liens Type Judgement Date Filed 12/01/2015 Case Number/ Docket 123456 Court Address Jackson County Court Downtown KC Plaintiff Time Warner Defendant Jennifer Doe Amount 300 Date Reported 01/01/2016 Date Satisfied 03/01/2016 Latoya Woods Women's Employment Network p:816-595-1302 email: lwoods@kcwen.org
Credit Account Current and previous accounts Company names Account numbersDate openedLast activity Type of accountStatusDate closed if the account is no longer openCredit limitItems as of date (currently owed, current or late payments) balancesPast due amountsDate reported to credit agenciesLatoya Woods Women's Employment Network p:816-595-1302 email: lwoods@kcwen.org
Credit Account (cont.) Account Number 123456789 High Credit Balance 20,000 Account Owner I Credit Limit Terms of Frequency Monthly/60 months Type Account Installment Status Pays as Agreed Amount Past Due Late Payment 30 60 90 Actual Payment Amount 365.00 Date Closed Date of Last Activity 06/01/2016Date of Delinquency Dated Verified06/2016Car Company63rd streetKansas City Mo Phone Number: 816-000-0000 Latoya Woods Women's Employment Network p:816-595-1302 email: lwoods@kcwen.org
Collections All accounts that are with collection agencies and status of those accounts Account Number 123456789 Credit Limit 1500 Balance 1800 Account Owner I High Credit 1600 Terms of Frequency Type Account Revolving Status Past Due Amount Past Due 1800 Late Payment 30 60 90 90 days Actual Payment AmountDate ClosedDate of Last Activity Date of Delinquency Dated Verified03/2016Visa123 ABC RDKansas City MO 64130816-111-2222Latoya Woods Women's Employment Network p:816-595-1302 email: lwoods@kcwen.org
Inquiries Companies that have looked at your credit report Basis for promotional rates Date Company Name 01/04/2016 Visa 09/01/2015 Fingerhut Latoya Woods Women's Employment Network p:816-595-1302 email: lwoods@kcwen.org
Disputing Inaccurate Information Consumers have a right to challenge inaccurate information on their credit report Credit agencies have 30 days to investigate Cannot dispute accurate information Latoya Woods Women's Employment Network p:816-595-1302 email: lwoods@kcwen.org
Improve Your Credit Pay your bills on time Keep balances or credit limits low (30%) Apply for and open new lines of credit when you need themMonitor your credit report Length of time that you have had a relationship with a creditor countsHave a mix of types of credit – revolving and installment Latoya Woods Women's Employment Network p:816-595-1302 email: lwoods@kcwen.org
Establish Credit Consider a secured credit card Apply for a credit card with a co-signer Apply for retail and gas credit cardsObtain a loan from a credit unionBecome an authorized user on another account Latoya Woods Women's Employment Network p:816-595-1302 email: lwoods@kcwen.org
Scams Be careful of ads offering debt relief Advance-Fee loan scams Credit repair scamsGuard your credit Latoya Woods Women's Employment Network p:816-595-1302 email: lwoods@kcwen.org
Debt What is debt? Secured debt Unsecured debt Latoya Woods Women's Employment Network p:816-595-1302 email: lwoods@kcwen.org
Tackle Your Debt Take responsibility for your debt Develop a budget Save to pay large debtsTake advantage of extra money opportunitiesEarned Income Tax Credit SettlementsContact your creditors and negotiate Set up a payment plan Latoya Woods Women's Employment Network p:816-595-1302 email: lwoods@kcwen.org
References and Resources Federal Trade Commission www.consumer.ftc.gov Tools: Money and credit, loans and dealing with debt, identity protection Consumer Finance Protection Bureauwww.consumerfinance.gov Submit complaints and financial toolsCredit Card: http://www.creditcards.com/glossary/term-balance-transfer.php#ixzz3kbxgYu00Latoya Woods Women's Employment Network p:816-595-1302 email: lwoods@kcwen.org
References and Resources Experian MythBusters http://blog.equifax.com/credit/mythbusters-how-credit-impacts-your-daily-life/# My Ficowww.myfico.com/crediteducationFDICwww.fdic.gov/consumers/consumer/moneysmart/Financial curriculum based on building financial skillsLatoya Woods Women's Employment Network p:816-595-1302 email: lwoods@kcwen.org
H&R Block Business & Career Center At the Kansas City Public Library 3rd floor of Central Library, 14 W. 10th St. 816-701-3717www.kclibrary.org/business-career Books on personal finance, job hunting, small business developmentPersonal finance: Budgeting, credit, investing, real estate, identity theftPersonal finance website (Sign up for more workshops on this website) Computers with software for resume and business plan writing Resources for nonprofit development Latoya Woods Women's Employment Network p:816-595-1302 email: lwoods@kcwen.org
Financial Opportunity Centers Women’s Employment Network 920 Main St, Suite 100 Kansas City, MO 64105 P: 816-595-1302 Guadalupe Centers Inc. 2600 Belleview Kansas City, MO 64108 P: 816- 472-4120Prosperity Center 5151 Troost Avenue, Suite 100 Kansas City, MO 64110 P: 816-501-4239 Community Services League 404 N Noland Rd Independence, MO 64050 P: 816-254-4100 Ask Me How I Can Help One-on-one counseling Financial Coaching Budgeting Setting future financial plans Tools for rebuilding credit Accountability