Credit 101: Journey to Financial Literacy Day 5

Good evening class,
Welcome to the fifth day on our journey to financial literacy. Today we will be transitioning into a new chapter of Credit. Today's class will demand copious note taking, as it will review our entire first chapter of credit reports. If you are serious about surviving this Great depression our economy has entered, than save this post in your documents as a record. No Farts and Giggles today class, we have a lot of review material to cover. Is your thinking cap on? Well here it goes

"Your credit report is an official record of money you have borrowed and repaid in the past, including information about late payments, criminal records and bankruptcy. You can see information about credit cards you have opened, loans you have taken out, and who has asked for your credit report.

Companies that loan money look at your credit report to determine your ability to pay back your debts on time. This is known as your credit rating.

It is important to know your history because:

Banks use that information to decide who gets loans
Landlords use it to decide who they will rent to
Employers can use it to decide whether or not to hire you


Key Terms:

Credit Bureau : a company that keeps track of people’s personal credit information. They build your credit report

Credit History: another word for your credit report

Credit Score : an actual number that banks and lending associations use to decide whether or not they want to lend you money. The score reflects your spending and repayment habits

Credit Report: your official record of borrowing and repaying, including information about late payments and bankruptcy
Identity Theft : pretending to be someone else by stealing their personal information. This is usually done to use someone else’s credit, or to blame them for a crime

you have the right to order a free copy of your own credit report every year from each of the three major credit bureaus below.

Experian
1-888-EXPERIAN (1-888-397-3742)
www.experian.com

Equifax
1-800-685-1111
www.equifax.com

Trans Union
1-800-888-4213
www.transunion.com

Order your copy online or call the Annual Credit Report Request Service (877) 322-8228.

LOOK OUT FOR SCAMS

Quick fixes: Beware of companies or services that promise to fix your credit quickly. They can be dishonest and expensive. No one can speed up the process. The only solution for credit problems is to get out of them by paying off your debt on time.
Debt restructuring: Never sign a contract or other "credit payment plan agreement" except with a reliable counseling service, such as a nonprofit. Be careful about agreeing to "debt restructuring plans." Their plans may lower your monthly payments but they will extend the length of time it will take to pay off all of your debts. Your total debt amount can grow from additional finance charges. Many people get deeper into debt after restructuring because they didn't understand the terms of the debt consolidation agreement.

Credit Fraud: Do not work with any agency that offers to change your Social Security number to get a new credit identity. Changing your Social Security number to avoid debt is fraud and a federal crime. A company that suggests for you to do that is performing an illegal activity. You could be arrested for following the company's advice. If a company offers to change your Social Security number, report it to the

What are the benefits of having a good credit rating?


A good credit rating:
Makes it easier to get loans with good terms
Makes it easier to get credit cards
Is important if you want to buy a home

A poor credit rating:
Makes it hard for you to get credit
Means you will probably pay higher interest rates on loans
Means you may be turned down for a job
Means you may not be able to rent an apartment

Getting your credit report is a good way to check for identity theft or errors. Check for the following:
Your personal information -- name, social security number, birthday, etc. -- is correct

Make sure all listed credit card reports are actually yours. This is where you can scan for identity theft if someone else has illegally opened an account with your name

Are there court orders against you?
Be sure you recognize past requests for your credit report. Make sure the requests come from companies with whom you usually do business.
If you find any mistakes, contact the credit bureau immediately. You could be saving yourself thousands of dollars or more just by requesting and reading your free report.


Fixing Credit Report Mistakes
If you see a mistake in your credit report, you should fix it right away. Here’s what you need to do.

1. Contact the credit bureau.
All 3 credit bureaus let you file a statement of dispute online or on the phone. The credit bureau will investigate the mistake.

Equifax: Call (800) 685-1111 or file online.
Experian: Call (888) 397-3742 or file online.
TransUnion: Call (800) 916-8800 or file online.

2. Contact the creditor that made the mistake.
If you think the credit company made a mistake in their reporting, you can contact them directly. They should have records for your entire account history. They can help you fix the problem.

3. Get your credit report from other credit bureaus to double check.
If one of the credit bureaus has mistakes, the other 2 probably have mistakes too. You can get free copies of your credit report to double check.

4. Make sure the mistake is fixed.
The credit bureau should respond within 1 month. If you haven’t heard from them, call. Make sure you get a free copy of the report with corrections. Double check the report when you get it!

5. Follow up with companies who saw the incorrect report.
Ask the credit bureau to send the updated version to creditors who saw your report during the last 6 months. If you tried to get insurance, call the company back and ask for another estimate. If the problem you fixed is important enough, you could get a better insurance score and lower insurance rates.

6. What to do when a mistake isn’t fixed:
If a credit bureau disagrees with your dispute and doesn’t make the correction, you can add a personal statement to your credit report. A personal statement is a short, written explanation of your side of the story. This statement is your chance to explain any credit problems on your report. It’s usually less than 100 words.
In some states, insurance companies are not allowed to use credit problems against you if you have a dispute and a personal statement on your credit report.

Helpful Hints
Have the credit report in front of you when you call. This will help you answer questions.
Get your records and statements together. If you know you’ve paid on time or in full, make copies of statements or canceled checks.
Make copies of everything you send to creditors or credit bureaus. Get proof from the post office through certified mail or priority mail. Keep copies of fax receipts.



DID YOU GET ALL THAT???????????

What a mouthful... Now be sure to copy and paste this infor into word for your future reference; you will need it for future homework assignments. Last class we discussed our Credit Report Restoration plan and the importance of step one and changing your thinking. Next post we will revisit this topic briefly before going into a broader look at Credit.


Class dismissed