1) What is a Credit Score? (referred as “FICO”)

a) Risk score ranging from low of 450 to high of 850, (see item #4 below for further explanation)

b) Scores are designed to approximate your future risk based SOLELY on your past credit report data

2) Why are Credit Scores used?

a) Loans approvals get done faster and speed up the entire process

b) Credit based interest rates are lower overall

c) Credit decisions are fairer based upon individuals past payment history

d) More credit available

3) Why your Credit Score is important:

a) Used for virtually all loan decisions — house, car, credit card, furniture, cell phone

b) Used by Insurance companies for your home & auto rates

c) Used by utility companies to determine your deposit

d) Used by potential employers to see into your past

4) Makeup of Credit Score: **key components**

35% - Past Payment History: late payments have negative impact on your score

30% - Account balances relative to high limits: need to be below 50% ratio to avoid negative impact

15% - Length of time of credit history: longer open and active accounts help impact positively

10% - Types of Credit lines: car loans, credit cards, mortgages, student loans, etc…

10% - New credit: recently opened accounts or INQUIRIES have negative impact

5) Ways to improve your Credit Score:

a) Pay bills on time

b) Settle any unpaid collections or past due accounts, talk to a loan consultant prior to doing this

c) Keep balances low on credit cards or any “revolving credit”

d) Don’t close unused credit cards

e) Don’t open unnecessary accounts

f) Shop for new loans within a 2 week period

g) Eliminate any errors on your report

6) Myths:

a) You only have 1 credit score

b) Checking your credit will lower your score

c) A poor score will stay with you forever

d) Age, income, sex, salary are factored into the score

e) Shopping for a loan hurts your score

f) Credit card offers hurt your score

7) Credit Score is only one part of any lending decision, other factors not included in your credit score:

a) Annual gross income, before any taxes taken out

b) Assets

c) Job status

d) Down payment amount

8) Check your Credit OFTEN but a minimum of 1 time yearly

a) www.annualcreditreport.com = 1 free report from each of the 3 credit bureaus per year (get 1 every 4th month)