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
• www.privacytimes.com
• Phone: 301-229-7002
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