Don’t be Haunted by Credit Mistakes

Ways to keep your credit from haunting you

Presenter: Barbara Stark

Does this look familiar?Kids lie awake at night because of monster movies…

Parents lie awake at night because of the budgetary boogeyman…

What is a Credit Score?

A credit score in the United States is a number representing the creditworthiness of a person or the likelihood that person will pay his or her debts.

FICO score breakdown:

35% Credit History

30% Amount Owed

15% Length of Credit History

10% New Credit

10% Type of Credit

Don’t be a Werewolf about bills:

• Just like a werewolf's full moon, bills come around every month

• If we prepare for them in advance then the thought of paying them doesn’t have to turn us into werewolves

• Largest part of your credit score is related to your payment history

• Make a calendar of when your bills are due and create a spending plan to pay each on time

Month: October 2010

Sunday Monday Tuesday Wednesday Thursday Friday Saturday

4 5$100 car insurance

6 7

$80 Light Bill8$50 cell phone

9

10 11 12

$25 gas13 13

$30 Cable Bill

14 15

16 17 18 19$150 carpayment

20 21$20 Visa

22

23 24 25 $25 gas

26 27 28$20 Sun Pass

29

$40 Mastercard

30 31

Beware of Zombie Credit Card Accounts

• 30% of your credit score is the total debt owed

• Be sure to pay down your debt

• Maxing out credit cards or moving debt from one account to another just feeds the debt with interest charges and keeps it alive long after you could have killed it off

Vampires and Credit Histories Live Forever!

• Length of credit history makes up 15% of your credit score

• Considering closing accounts that you don’t use anymore? Think twice

• How long you’ve had credit affects your score

• As long as you don’t use the credit cards that often, you don’t have to worry about them sucking your budget dry

Watch out for that wand!

• New credit accounts for 10% of your credit score• It’s not a good idea to open several new accounts at

once• With all the free credit card offers around, you don’t need

a witch or a wizard to make new accounts appear but beware of the spell- it may put your score under!

Who you gonna call?

•The final part of your credit score, 10%, is based on the type of credit you have such as revolving credit used by credit card companies and secured credit obtained for major purchases such as cars and home.

•It’s a good to have a mix to avoid getting slimed by a low credit score.

Don’t act like you live in a haunted house…

• Number one mistake you can make to destroy your credit is to ignore or hide from problems that may arise.

• Not answering your phone or opening your mail will NOT make the problem invisible or go away.

Invasion of the body snatchers…

• Identity theft can make a mess out of your life and your credit score.

• Guard your private information by shredding credit card offers and old financial records and never giving out personal information such as your social security number.

It’s ALIVE!

•While your credit history may not actually be alive, it does change as time goes by and can get easier to live with or, if your not careful, it can turn into a monster.

•Keep your eye on it by reviewing your bills and bank statements as they come in, monitoring your credit reports regularly and using credit responsibly.

Let’s Recap…

1. What is a credit score?

A. A credit card

B. Frankenstein's IQ level

C. Number representing the creditworthiness

D. A letter representing your character

2. What does the largest part of your credit score represent?

A. The number of times you have applied for a credit cardB. A vampires’ fangsC. Your GPA level D. Your payment history

3. 30 % of your credit score represents how much money you have paid to eliminate your debt.

a.True b.False

4. What information should you keep secure in order to avoid Identity theft?

a. Your secret identityb. Dracula’s layerc. Your goblin’s existenced. Your social security number

American Debt Counseling, Inc.American Debt Counseling, Inc.1 888 DEBT USA1 888 DEBT USA

www.americandebtcounseling.orgwww.americandebtcounseling.org

THANK YOU!