Personal Finance Study Guide 3

What is the LEAST important to maintaining a healthy credit score?

Knowing your exact credit score

What makes an account "in good standing" according to the Experian credit report?

Lists accounts that have a positive status & may be viewed favorably by creditors

Should you provide your Social Security number for Credit Card Purchases?

No

Should you provide your Social Security number for applying for your schools' ID card?

No

Should you provide your Social Security number for signing up for a frequent shopper card at a store?

No

Should you provide your Social Security number for filling our the FAFSA form when applying for federal student aid?

Yes

Should you provide your Social Security number for signing up for a cell phone contract?

Yes

Should you provide your Social Security number for signing up for public benefits like medical benefits or school lunch program?

Yes

Should you provide your Social Security number for tax returns?

Yes

Name five things that credit scoring can do to help you.

setup payment reminders, reduce the amount of debt you owe, pay your bills in full & on time, keep balances low on credit cards & other revolving credit

Name three things you can do to protect your personal information.

shred all sensitive documents before throwing them away, protect all your accounts with strong secure passwords & change them often, don't click on suspicious links/download software from unfamiliar sources

What does SSN stand for?

social security number

What is consumer fraud?

when a product/service is illegally used to deceive you into sending money /signing up for a phony service

What is identity theft?

when someone illegally obtains your personal information and then impersonates you

You may have been a victim of identity theft if .........

you look at your credit report and notice accounts you didn't open, You notice charges on your bank account that you don't recognize, your favorite store emails you to let you know their data was stolen

Why is the potentially negative item from ABCD banks listed?

It's a late fee.

How long should you keep pay stubs, medical records, credit card statements, and banking statements? ________________ Tax Records? _______________________

1 Year; 3 Years

Give the correct steps in resolving identity theft.

1. Contact the company that there is reported suspicious changes 2. Call a credit bureau & place an initial fraud alert 3. Order your credit report 4. Report the identity theft to the Federal Trade Commission 5. Continue to monitor your accounts and credit report

Name 5 steps to create a strong password.

1. Create a sentence 2. Use an acronym 3. Capitalize letters N through Z 4. Add numbers 5. Add Symbols & Punctuation

How many FICO scores do you have?

3

What situation should you expect to provide your SSN?

Applying for federal student aid

Which accounts are in good standing?

Automobile Auto Finance

What describes an effective strategy for protecting yourself against identity theft?

Avoid using unsecured wireless networks

Who is this report for and what is there social security number?

John Q. Consumer 999999999

Your aunt began receiving threatening phone calls from her mortgage company, saying that her check was bad and that your aunt could lose her house if she does not make her mortgage payment in the next 7 days. Which law or agency could help or provide you with more information?

Consumer Financial Protection Bureau

Brainstorm any laws or practices that you would want a bank, credit card company, or government to act in order to protect you day to day financial transactions..

Don't purchase things online. Don't give out personal information. Leave your SSN at home. Memorize you SSN. If you use credit cards, use them wisely. Identity Theft Protection, Passwords to Bank Accounts

You're meeting with a lender to apply for a mortgage. The lender pays you if you have ever been divorced, and you're not comfortable answering the question. Which law or agency could help or provide you with more information?

Equal Credit Opportunity Act

What are the three major credit bureaus that issue a Fico Score?

Equifax, Transunion, Experian

What does FICO stand for and what is it?

Fair Isaac Corporation

What does FTC stand for?

Federal Trade Commission

Who has made requests to view your credit history?

Homesale Reality Co., M&T Bank, Western Funding Inc.

Write your own fictional scenario and select the appropriate consumer protection law or agency that would help. CONSUMER FINANCIAL PROTECTION BUREAU.

I was receiving threatening phone calls from my credit company. They did not receive my last payment & if I don't pay in the next 10 days they will cancel my credit card.

When you're spending money, when do you think you could be at risk for identity theft or consumer fraud?

If I buy something online on amazon, amazon makes you put in your credit card/debit card information & when you do that people can break into your amazon account and steal your money.

Your friend's uncle says he is a broker and offers to invest $1,000 of your savings for you. You aren't sure if he really is a registered broker or what that means, and you'd like to do some research first before making your first investment. Which law or agency could help or provide you with more information?

Secretary of State

Your friend's dad owns over 50% of stocks in a publicly traded company. He has been telling your dad that he should buy stocks now - there's a "big announcement" on Friday that will make a lot of people rich and happy.

Securities and Exchange Commission

You recently bought a used car. After driving it for several days, you notice that the brakes are faulty, something that the seller did not tell you about upon purchasing this vehicle. Which law or agency could help or provide you with more information?

State "Lemon" Law

You notice on your credit report that there are two new credit cards listed under your name that you do not remember opening. You're concerned that someone has stolen your identity and is using your social security number and name to open up extra lines of credit. Which law or agency could help or provide you with more information?

State Credit Freeze Law

Consumer Financial Protection Bureau (CFPB)

The CFPB makes sure that the financial products & services are services that Americans depend on every day. It makes sure people understand the fine print that explains the risks involved in these services, & ensuring the banks, credit unions, & other financial companies that provide them play by the rules. It's duties fall into three parts: educate, enforce, and research.

Equal Credit Opportunity Act

The ECOA protects consumers from discrimination on the basis of race, sex, religion, national origin, and martial status. It protects you from disparate treatment. It's protection is way beyond loan application.

The Fair Credit Billing Act

The FCBA protects consumers against inaccurate or unwarranted charges. Cardholders have protection against liability for fraudulent charges under FCBA if their credit card details have been compromised in a data breach or if they discover a thief has gained access to their credit details. It also protects your consumer rights.

You open up your credit care statement and you realize that you have been charged for an item that you returned to the store a month earlier. Which law or agency could help or provide you with more information?

The Fair Credit Billing Act

State Credit Freeze Law

The SCFL prevents consumers from gaining access to new loans (credit cards & mortgages). It keeps fraudsters from opening new accounts in that person's name. It places a lock on access to a borrower's credit report.

Securities and Exchange Commission (SEC)

The SEC protects investors, maintain fair, orderly, efficient markets, & facilitate capital formation. It oversees the key participants in the securities world, including securities exchanges, securities brokers and dealers, investment advisors, & mutual funds. It consists of five presidentially-appointed Commissioners, with staggered five-year terms.

State "Lemon" Law

The SLL attempts to protect consumers in event that they purchase a defective vehicle/other consumer products/services referred to as lemons. They apply to defects that affect the use, safety or value of value/product. They often cover new vehicle purchases, but can be applied towards other purchases/leases.

Secretary of State

The SOS serves as the President's principal advisor on U.S. foreign policy. It conducts negotiations relating to U.S. foreign affairs. It grants & exequaturs to foreign consuls in the US.

What is a "phishing scam"?

When someone tries to deceive you into providing personal information by impersonating someone like a bank representative.

Should you provide your Social Security number for employment records?

Yes

What does a higher credit card score indicate?

You pay your bills & loans on time and in full.

To have a FICO score calculated what must you have?

bank account open for six months or longer, one bank account that has been reported to the credit bureau within last six months

What do your credit scores range from (lowest to highest)? Is it better to have a low score or a high score?

high score 300-850 700-850 Excellent Credit 680-700 Good Credit 620-679 Okay Credit 580-619 Fair 500-579 Poor Below 500 Very Poor

Give one thing that the Fair Debt Practices Act regulates.

hours that collectors may call a consumer & prohibits collectors from publishing a consumer's name/address on a bad debt list

Name 7 ways identity theft can happen.

internet, phone, mail, searching through your trash, credit card, bank account, consumer fraud

What's three important things to do to improve your score?

pay in full & on time, pay off loans, use a small % of credit limit, checking your credit report

Name five things found in your credit score.

payment history - 35% Amounts Owed - 30% Length of History - 15% New Credit - 10% Credit Mix - 10%

What are "potentially negative items" on an Experian credit report sheet? Give a definition.

public records, credit items items that creditors may view less favorably

Name five things not found in your credit score.

race/color/religion/national origin/sex/martial status, age, salary/job/title/employer/date employed/employment history, house location, items reported as child/family support obligations