Understanding Debt and How to Improve Your Credit

Transcript:Understanding Debt and How to Improve Your Credit:
Understanding Debt and How to Improve Your Credit Score What’s a Credit union? Credit Unions are not-for-profit organizations that exist to serve their members How are they like banks? Credit Unions accept deposits, make loans and provide other financial services Credit Unions have ATMs as well as PC and Mobile Banking Deposits are federally insured How are they not like banks? Instead of stockholders they are owned by their members Profits go back to members in better rates and lower fees Who is excite credit union We’re your local, neighborhood-friendly credit union and we’ve been here over 60 years Over 40,000 members and approximately $600m in assets Regular Accounts with no monthly fees Our goal is to give everyone the chance to build a financially stronger future Unique Youth Savings Programs Three major credit bureaus - Equifax, Experian & TransUnion Bureaus compile and report information - Payment history, public records, personal information, inquiries Information is used for credit and other business decisions Your Credit Report What’s on your credit report Personal Information Name Former Names Current Address Previous Addresses Social Security Number Date of Birth Employer Credit Inquiries Soft Inquiries Hard Inquiries Public Records Bankruptcies Collections Repossessions Foreclosures Credit Accounts The date the account was opened The type of credit (revolving, installment, mortgage) Your credit limit Your current balance Who you have the account with Your payment history Numerical measure of credit worthiness Based on information in credit report Credit report tracks credit activity - Compiled by three bureaus: Equifax, Experian, TransUnion Many creditors just look at score, not report What is a Credit Score? Most widely used scoring model 300–850 - The higher, the better Score from each bureau - Creditor may check all three or only one FICO Score Cost of credit - Car loans - Mortgages - Credit cards - Personal loans Insurance costs Employment opportunities Housing options Why Does Good Credit Matter? 8 How Much can it cost you? On a home loan With a 740 credit score your fee can be $6,295 With a 680 credit score your fee can be $13,795 $7,500 difference Even 1 point (739 v 740) could cost you $1,500 Credit cards could go from 9.99% up to 24.9% Auto, personal and other loans will be affected as well A good score can save you money How FICO Score Is Calculated Always pay on time Pay down existing debt Diversify your