Credit Report

How long will negative information stay on your credit report? And what if you declare bankruptcy?

7 years for general negative information and 10 years for bankruptcy. Unless you are applying for credit loan of more than $75,000 or buying life insurance worth more than $150,000.

Assets

A useful or valuable thing regarded as having value and available to meet debts, commitments or legacies.

What should someone do to minimize the impact of losing a job?

To minimize the impact of losing a job people should try setting up an emergency savings account so they can draw money from it if they ever need to.

Balance Transfer

Transferring debt from one credit card to another. Allows for one payment. Might get you a lower interest rate. Balance transfers have a separate interest rate than purchases.

Cash Advance

Using your credit card at ATM to receive cash. Do NOT use your credit card at an ATM. Cash advances have a separate interest rate than purchases.

How often can an individual obtain a credit report?

You can obtain a credit report by getting 3 free reports each year - one from each agency. Check each report once a year. If you are denied credit you can get a free credit report with in 60 days to verify information.

Where does an individual obtain a credit report?

You can obtain a credit report by going to Annualcreditreport.com.

Credit Report

A detailed description of how well the individual uses credit cards and other loans to build a credit history.

Closed End Credit

A one time loan that is paid back over a period of time to the bank in equal amounts. Interest is added to the amount you pay to the bank. Set amounts of money.

Lender

Gives money to a borrower and expects money back for the borrowers.

What are some positive things you can do that will positively help your credit score?

Have a good credit report to start with. Pay all payments on the due date. Stay away from your credit limit. Have loans/cards for longer periods of time. Don't get too many credit card accounts too quickly. Have a variety of different credits you use.

What are some negative things you can do that will negatively hurt your credit score?

Having a bad credit report to start with. Having late or missing payments. Getting too close to your credit limit. Having loans/cards for only a small amount of time. Having too many credit card accounts at the same time. And having only the some type of credits over and over again.

Does having medical insurance protect an individual from going bankrupt?

Having medical insurance does not protect an individual from going bankrupt because 78% of people that file for bankruptcy from medical expenses had some form of health insurance.

Debt

How much money you still owe to bank/card companies you borrow money from.

Cosigner

If you are under 21 to get a credit card you have to obtain a co-signer. A co-signer is equally responsible for the debt.

How is your credit score calculated?

Information in the calculation comes from your credit report. 35% payment history: All accounts including missing, late and on time payments. 30% outstanding debt: How close you are to your credit limit: Too close = Bad score. 15% Length of Credit History: How long have you had loans/cards: Longer = Better score. 10% Pursuit of New Credit: How many new accounts have you opened: Too many, too recently=Bad. 10% Types of Credit in use: What types of credit do you use: Variety = Better score.

Hard Credit Check

Affects your credit score. When you give permission to someone to check your credit history (because you are applying for more credit).

APR

Annual Percentage Rate. Interest will be charged on your credit card balance IF you don't pay the full balance. (14-34%)

Unsecured Debt

Any type of debt that is not protected by a guarantor by a lien on specific assets of the borrower in the case of a bankruptcy or failure to meet the terms for repayment. Also known as open end credit.

Debt-Consolidation Loan

Is a form of debt refinancing that entails taking out a new loan to pay off a number of liabilities and consumer debts. Is one large piece of debt instead of multiple small ones and it usually has lower interest rates. Is also known as a balance transfer.

Wage Garnishments

Is when a court issues an order requiring your employer to withhold a certain amount of your paycheck and send it directly to the institution to whom you owe money too until your debit is payed off.

Open End Credit

Borrower receives the loan before knowing what will be purchased. Payment amount varies and can be equal or unequal payments. YOU decide how much you pay; will you pay it all at once or pay it off slowly? Amount borrowed may be increased.

Chapter 13

Borrower/debtor proves he/she has income. Proposes a plan to repay, most but not all of the debt using income. Approved by court. Keeps most assets. 3-5 year process. Chapter 13 is preferred because the bank still gets money back and you don't have to sell all of your things and you get to keep most of your things.

Credit

Loan that is either open or closed end credit.

What are the different ways there could be a mistake on your credit history/score?

Mistaken Identity: Putting someone else's info on your report. Fraud: Stolen Identity.

What should you do if you find a mistake on your credit history/score?

Contact the reporting agency to file a dispute. Agency will contact the lender and if you are correct, the info must be removed.

Chapter 7

Most debt is forgiven. Still needs to pay: student loans, child support, and taxes. Many of assets are sold off (home is frequently safe). 3-5 month process.

Soft Credit Check

Does not affect your credit score. When you check your credit history. When credit card company's pre-approve you for a card.

What are the 3 credit reporting agencies?

Equifax Experian Transunion

FICO

Fair Isaac CO. Most common system for credit score calculation. 850 is the best score. Math calculation to help lenders evaluate the risk of lending a customer money. Based on info from credit reports.

What information is on a credit report?

Personal Information: Name, all known addresses, SSN, DOB, and employment history. Accounts Summary: What loans had/do you have (credit cards, home/auto loans, etc). Includes credit limits or amount of loans your payment history (missed/late). Public Records on your Accounts: Was your account turned over to a collection agency. Collection Agency: A business that collects unpaid loans for a fee. Credit Inquires: A request to view your credit report. AKA credit checks.

What are some things that do not affect your credit score?

Race, religion, gender, marital status, age, salary, job, employer, where you live, how much money you have and savings accounts.

Variable APR

Rate that changes the amount of money you have to pay monthly or yearly.

Fixed APR

Rate that stay's the same amount of money the whole time.

Creditworthiness

Should you receive credit? It is based off of history and report.

Borrower

The person receiving the money.

Credit Score

The report is used to make a number that summarizes your credit report history. To evaluate if they should lend the customer's money or not.

What is a way that your credit score can affect you?

Your credit score can affect you by making you go bankrupt. If you have lot of debt and taxes that you have to pay off, and you have a bad credit score then you won't be able to make those payments. Making you go bankrupt.