CREDIT HISTORY & SCORES
CREDIT REPORTS
 aka: credit history
 3 Credit Bureaus receive and maintain
information on consumers: Experian,
TransUnion, and Equifax
 This information helps lenders and others to make
decisions about consumers.
 You are entitled to one free report each year from
each credit Bureau (www.annualcreditreport.com)
 Credit scores are derived from your credit history
Reports contain 4 categories
of information
 Identification and
Employment
 Payment History
 Inquiries
 Public Records
Identification and Employment
 Name, address, and telephone numbers
 Social security number
 Spouse’s name
 Aliases
 Employment history, income
 Prior addresses
 Home ownership
Payment History
 The Tradelines
 Accounts (installment, revolving,
secured)
 Individual or joint
 Credit limits
 Current status
 How you have repaid
 Overdue information (30, 60, 90)
Inquiries
 Credit reporting agencies record an inquire
whenever your credit report is shown to
another party, such as a lender, service
provider, landlord, or insurer. Inquiries remain
on your credit report for up to two years.
 Solicited vs. unsolicited
 How they impact your credit score
Public Information
 Most public record information stays on your
credit report for 7 years.
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Bankruptcies
Liens and judgments
Foreclosures
Garnishments
Late Child Support Payments
What is not in your credit report?
 A credit report does not include information
about:
 checking or savings accounts
 bankruptcies that are more than 10 years old
 charged-off or debts placed for collection that
are more than seven years old
 gender, ethnicity, religion, political affiliation,
medical history, or criminal records.
 Your credit score is generated by information
on your credit report, but is not part of the
report itself.
Who can look at your credit report?
Anyone with what is considered a permissible purpose
can look at your report. Including:
 Potential and current lenders, landlords, & insurance
companies
 Employers and potential employers (with your written consent)
 Companies you allow to monitor your account for signs of
identity theft
 A state or local child support enforcement agency
 Any government agency
 Someone who uses your credit report to provide a product or
service you have requested
 Someone that has your written authorization to obtain your
credit report
Fixing Errors on Your Report
1. Contact the Credit Reporting Agency
2. Contact the Creditor
3. Contact the other Credit Reporting
Companies
4. Ensure the error is fixed within 30-45 days
5. If you cannot resolve the disputed
information, add a brief statement to your
file explaining the circumstances
Additional Information about
Credit Reports
 Negative Information stays on your report for 7
years, bankruptcies will show up for 10 years
 You are entitled to one free credit report each
year; go to: www.annualcreditreport.com. You
can also obtain a free copy if you are denied credit
 The Fair Credit Reporting Act (1971; amended in
1997 & 2003) is the federal law enables consumers
to learn what information consumer reporting
agencies have on file about them, and to dispute
errors
CREDIT SCORES
A credit score is a rating used by a lender to
help determine whether you qualify for a
particular credit card, loan, or service.
Based on information in your credit file, the
credit reporting company analyzes your
information using a complex mathematical
model to yield your credit score.
Why your score matters
• Credit scores are used by lenders to estimate
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if you'll pay off your loans and whether you'll
pay on time.
Because it's one of the most influential
factors in deciding whether to grant you
credit, knowing your score is important when
you apply for a loan. It is used to determine
the rates and terms of your loans.
Why is credit scoring used?
• It is fast
• Scores are based on data and statistics
• They are unbiased and nonjudgmental
• It is a reliable tool to indicate risk
Who calculates the score?
Credit bureau scores are often called
“FICO scores” because most credit
bureau scores used in the U.S. are
produced from software developed by
Fair Isaac and Company. FICO scores
are provided to lenders by the major
credit reporting agencies.
Names for FICO Scores
Credit Reporting
Agency
FICO® Score
Equifax
BEACON®
Experian
Experian/Fair Isaac
Risk Model
TransUnion
EMPIRICA®
Your score ranges from 300 to 850, but the majority of scores
fall within the 600s and 700s. Higher scores indicate a lower
credit risk. For a score to be calculated, your credit report
must contain at least one account that has been open for six
months or more, and at least one account that has been
updated in the past six months.
What Factors Impact Your Score
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Payment History
Public Records
Amount owed
Length of credit history
New accounts
Inquiries
Accounts in use
How to improve your score
• Keep account balances
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low
Pay bills on time
Don’t open credit
cards/accounts you
don’t need
Have credit cards, but
manage them
responsibly
Closing an account
doesn’t make it go away
What is not in your score?
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Gender
Marital status
Religion
Ethnicity
Nationality
Bank Records