What is Credit?
Ms. Jualeah Shaw
Answer Home Loans dba Black Bird Realty
Realtor & Loan Officer 
Buy-Sell-Invest
CA DRE#: 01500103
NMLS#: 1573498

(510) 695-7353
BUILD YOUR CREDIT - BUILD YOUR WEALTH - BUILD YOUR FUTURE


Who checks credit?
  • Banks/credit card companies
  • Landlords
  • Home insurance companies
  • Utility companies
  • Employers


A higher score will lead to.....

  • Lower home and car insurance rates
  • Deposit waiver from utility companies
  • Better package service from a cell phone company
  • Ability to finance a car or a home with a better interest rate

Little known facts.....
  • Approximately 85-90% of consumers have some sort of inaccurate information reporting on their credit report
  • 82% of Americans have some sort of credit issues
  • 70% of the US population live check to check
  • 95% do not have a budget writing
  • Average American has 6 credit cards
  • Average interest rate on a credit card is 18.9%

 

Three major credit reporting agencies.....
  • Equifax
  • Transunion
  • Experian

Types of credit.....
  • Revolving (i.e. credit cards)
  • Installment (i.e. home loan)
  • Alternative/traditional (i.e. utilities)
  • Collections

What impacts your FICO Score.....
  • Payment history (35%)
  • Revolving balance (30%)
  • Length of credit history (15%)
  • Types of credit (10%)
  • New credit (10%)

Negative credit factors.....
  • Court judgment, tax lien, etc. carry an additional negative penalty, especially when recent
  • Payday loans, rent to own, cash advances
  • Having a P.O. Box listed as your address
  • Multiple addresses (considered unstable)
  • Occupation stated on credit report (possible risk)
  • Closing your credit card accounts
  • Accounts listed as "Closed by credit grantor" (closed by the lending institution)
  • Paying an old collection (over 2 years)
  • Applying for multiple accounts (having your credit pulled multiple times in a short time a.k.a inquiries)


How to improve your score quickly.....

  • Pay down revolving debt below 30% of the credit limit (i.e. $1000 credit card, pay below $300)
  • Utilize old credit cards but very lightly
  • Transfer balance of the cards to other cards to reduce them to the 30% limit (try to get the usage on all of them at 20-30% instead of a bunch at zero and one at 80%)
  • Request a lender to delete a late payment from your credit file
  • Dispute negative items from your report
  • Authorized user - become an authorized user on someone's card who has a long and strong credit history
  • Have a collection agency agree to delete a collection on the account if you pay.  Only do this if they agree to do so in writing

Common errors worth disputing.....
  • Late payments, charge offs, collections or other negative items that aren't yours
  • Credit limits reported as lower than they actually are
  • Accounts listed as "settled," "paid derogatory," "paid charge-off" or anything other than "current" or "paid as agreed" if you paid on time and in full
  • Accounts that are still listed as unpaid that were included in a bankruptcy
  • Negative items older than seven years (10 in the case of bankruptcy) that should have automatically fallen off your reports

New changes to credit reporting.....
  • Medical collections will no longer weigh as heavily as other collections
  • Paid medical collections will be removed from your credit report
  • Fair Credit Reporting Act of 2014

Where do you fall.....
  • Less than 580 = VERY POOR
  • 581-620 = POOR
  • 621-680 = FAIR
  • 681-720 = GOOD
  • 721 and higher = EXCELLENT

You have the right to a FREE credit report every year.....