Credit history and scores study guide

Which is better high or low credit score?

HIGH

Five factors taken into account when calculating credit score?

1. Payment history 2. Amounts owed 3. Length of credit history 4. New credit 5. Types of credit

Six steps to disputing a credit report error?

1. make sure it's legitimate a error 2. Send a letter to the bureau that reported an error 3. Remain patient 4. Determine whether the resolution is adequate 5. Repeat 6. Follow up

At work credit score do you think it's unlikely that things would offer you a loan or credit card?

579 or lower

What percent of Americans do you know their credit score?

63%

How long do you financial records remain on your credit report?

7 to 10 years

Two ways as a teen or young adult you can approve your credit score

Apply for a secured credit card/become an authorized user.

Why is your credit report being looked at

Background check Likelihood of paying bills To get insurance premium charges Pre-screening an application approval Checked when you apply for government assistance

What would not appear on your credit report?

Balance from your bank accounts

Remember

Credit reports influence what your credit score is.

Three major credit bureaus

Equifax, Experian, TransUnion

Record some of the information you can expect to find on a credit report?

History and track records of paying bills Open/closed accounts Late payments Credit inquiries

Three common report errors

Identity errors, incorrect account details, and fraudulent accounts.

How would you decide whether to dispute the error with a credit agency or a bank/lender?

If the bank appears to be sending the credit bureaus incorrect information, or if there is fraudulent account open in your name, it should be disputed.

Why is Having a thin file NOT an asset?

If you do not have a credit score, no one can access your credit worthiness, which then makes it hard to obtain loans/additional credit going forward.

What is the scale for minimum to maximum possible credit score?

Minimum is 300, maximum is 850

Two MOST important factors taken into account when calculating your credit score?

Payment history and amount of debt.

Information they use to create your report?

Personal information, credit history, public records, credit inquiries.

Remember

Say you got a score of 750 if you miss one credit card payment, it will impact your credit score more than if you would have a lower score because it will be viewed as a more serious blemish in your history.

Ways to prevent identity theft?

Shred documents before tossing them Don't give out your credit card information Be careful with emails Review your bank statements each month Report stolen credit cards instantly

Define social security identity theft?

Someone illegally using your Social Security number and assuming your identity can cause a lot of problems.

Medical identity theft

Someone steals your medical number or SSN and makes fraudulent claims to Medicare without your authorization.

Employment identity theft

Someone use your information to get a job or pass a background check

Tax identity theft

Someone uses your stolen personal information including your SSN to file a tax return claiming a fraudulent refund.

What is the connection between a credit report and a credit score?

The information from your credit report is what determines your credit score.

What's the catch with many services promoting a free credit score?

There is usually a monthly fee because they simultaneously sign you up for credit monitoring or some other service.

Summarize the restrictions on denying credit?

They are not allowed to deny you credit based on demographic details

Define "thin file"

Thin file means you do not have any credit history or you have very limited credit history, which makes it difficult to obtain credit going forward.

List two reasons explaining why it is important to request your three credit reports and review them regularly?

To see if there is someone else using your credit under your name (identity theft) To see if there's any errors

Criminal identity theft

When someone cited or arrested uses another persons name or information posing as them.

Child identity theft

When someone uses a child's SSN number to commit fraud.

How can you obtain a free copy of your credit report?

Www.annualcreditreport.com