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Credit Education |
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| Table of Contents:
Page 1:
- Why is credit important?
- What is a credit file?
- What are credit reporting agencies?
- What is credit scoring?
- Why is credit scoring used?
- How is a credit scoring model developed?
- What can I do to improve my score?
- How reliable is the credit scoring system?
- What happens if you are denied credit or don't get the terms you want?
- How long does information remain on a credit file?
- What is an inquiry?
Page 2:
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Abbreviations used in a credit profile
The following abbreviations may be used on your credit profile:
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- = Not reported that month
0 = Too new to rate
1 or * = Current
2 = 30 days late
3 = 60 days late
4 = 90 days late
5 = 120 days late |
6 = 150 days late
7 = Wage earner plan or bankruptcy
8 = Repossession or foreclosure
9 = Collection or charge off
X = No activity that month
U = Unrated
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Account Status: |
Shows the current status of your account and may indicate delinquencies that were reported in the past seven years |
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Balance Amount: |
Amount due to the creditor at the time account information was last reported to the credit reporting agencies |
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Balance Date: |
The last date the file was updated with account information by the credit reporting agency |
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Agency Name: |
One of the three main credit reporting agencies – Equifax (EFX), Experian (XPN), or TransUnion (TU) – that collect and store information about consumers’ credit histories. |
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Current Ratings: |
Shows total of all account types that are currently delinquent 30, 60, or 90 days |
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Date on File: |
Date your credit file was opened at one of the three credit reporting agencies – Equifax, Experian, or TransUnion |
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Date Open: |
Date that account was opened |
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Date Paid: |
Date that the collection account was satisfied |
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Date of Status: |
Date that the account status was last updated |
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Filing Date: |
Date that item was filed with the courts |
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High/Limit: |
The highest balance since the account was opened, or the limit on the account |
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History Ratings: |
Shows the total of all account types that were delinquent 30, 60, or 90 days in the past seven years |
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Loan Type: |
Type of loan for which an inquiry was made |
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Inquiry Date: |
Date when your credit file was requested |
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Mthly Pymt.: |
Average monthly payment reported to the credit reporting agencies – may be estimated by the agency if not reported by the creditor (this may be indicated by an asterisk “*”) |
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Original Creditor: |
Shows the original creditor that turned the account over to the collection agency |
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Ownership: |
I(Individual) – individual responsible for payment of account
J (Joint) – contractual responsibility with another individual
A (Authorized User) – individual is authorized user; another individual has contractual responsibility
C (Co-signer) – individual assumes responsibility should signer default
T (Terminated) – account has been terminated by consumer or credit grantor
D (Deceased) – individual reported as deceased
B (On behalf of) – individual has secured credit for another individual
S (Signer) – individual responsible for account guaranteed by a co-signer
W (Business/Commercial) – business or commercial loan
M (Maker) – individual has the primary responsibility of the account
U (Undesignated) – no contractual responsibility reported
N (Non-applicant) – individual is not the applicant; another individual has contractual responsibility |
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Past Due Amt.: |
Amount currently past due as of the balance date |
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Prior Delinq.: |
Date account was last reported delinquent as listed in the Account Status column |
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Tradeline Name: |
Account name |
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Trades Opened: |
New accounts opened |
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Type of Account: |
Payment terms associated with an account:
Revolving – An account where a balance can be carried over from month to month
Installment – An account with a fixed payment for the term of the loan
Real Estate – A fixed payment account involving ownership of property (mortgage payments)
Net 30 – An account where the balance must be paid in full at the end of 30 days | |
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Thinking of using a Credit R epair Agency? You may want to think again.Generally, “Quick Fix” credit counselors won’t be able to help clear up problems with your credit file. The only solution for genuine credit problems is to pay off your debt on schedule and to wait for negative information to be removed over time. There’s nothing that they can do that you can’t do for yourself, and no one can speed up the process.
Beware of companies or services that promise they can fix credit files quickly. They may be fraudulent and expensive. Never, ever, sign a contract or other credit payment plan agreement except with a reliable counseling service. Be very careful about agreeing to debt restructuring plans. They may lower your monthly payments by extending the length of time it will take to pay off all your debts. But these plans can increase the total amount of your debt because the finance charges will add up rapidly. Many people find themselves in much deeper debt after they have restructured debt because they did not understand the terms of their debt consolidation agreements. |
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Credit Education SpecialistsAs part of your membership, you may contact our specially trained Credit Education Specialists during our extended business hours.
A Credit Education Specialist can help you to understand the information contained in your comprehensive credit profile and Quarterly Credit Updates, answer questions that you may have, and explain the steps to take to dispute information on your profile, if necessary. |
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Credit tips for homeownersFor many people, buying a new home is the biggest investment they’ll ever make. There’s nothing like owning your own home – it brings you a sense of security and belonging that cannot be found anywhere else. For many people, home ownership represents personal and financial success.
Home ownership is also one of the most important goals for many people because of the financial advantages and tax benefits. Interest paid on a home loan and the real estate taxes you pay on your home are among the few major federal tax deductions. It’s also why it is essential to have a good credit rating to qualify for a home mortgage.
Home Equity Loans
A home equity loan can be the most cost-effective form of credit available to you. Home equity loans are backed by the equity you have in your home. The main advantages to a home equity loan are:
- Access to a larger amount of money
- Interest is usually tax deductible
- You can use your home equity loan for home improvement or other expenses.
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Credit tip s for college studentsThese days, a college education is more expensive than ever before – and costs are rising every year. That’s why many students and families look for financial aid and educational student loans. A good credit history is essential for qualifying for one of these loans, which can offer very favorable terms.
Once again, it is essential to review your credit history before you apply – to make sure the information is accurate and up-to-date.
Most universities have financial aid resources that should be thoroughly investigated by students and their families. Even if you do not qualify for financial aid because of high income or assets, there may be other resources of which you can take advantage.
Consider an Educational IRA. Implemented in 1998, Educational IRAs offer substantial tax advantages for families, both immediately and when the child goes to college. If you qualify, you can make tax-free contributions of up to $500 per year. There are some restrictions, so please consult your bank or tax advisor for more information.
Note: Some states have special savings plans if you commit to sending your child to college within the state. Ask your bank or State Representative’s office about them. |
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Credit tips for jo b applicantsYou expect a bank or department store to look at your credit file when you apply for a loan or credit card. But what if you apply for a new job? Does your potential employer have a right to review your credit file?
The answer is, “Yes.” Federal law enables potential employers to review a modified version of your credit file, also called an employment report.
However, they must first receive your permission in writing to do so.
Who uses employment reports?
Traditionally, the biggest users of credit files for employment purposes are companies in the defense, chemical, pharmaceutical and financial services industries because of the sensitive positions many of these employees hold.
Increasingly, however, other industries are using credit files as a general indicator of an applicant’s financial honesty and personal integrity.
What does an employment report include?
It includes much, but not all, of the information about your loans and credit cards that is listed in your credit file.
To protect your financial security, employment reports omit your account numbers. Some states specifically prohibit the display of account numbers on employment reports.
What other types of information are on an employment report?
The employment report can help verify information on a job application and provide a clearer picture of an applicant. It also contains data that is relevant to a potential employer. For example, the report lists an applicant’s current employer, his or her financial obligations, public record information (bankruptcies, liens and judgments) and past-due accounts.
An applicant’s payment pattern can demonstrate integrity. If the report indicates that personal finances are handled responsibly, the company may assume the individual will handle its financial affairs responsibly, too. |
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The Fair Credit Reporting Act (FCRA)The Fair Credit Reporting Act explains the conditions and timing that creditors must follow when granting and denying credit. It also provides specific rights for consumers, including:
The right to view and obtain copies of your credit file from any credit reporting agency for a reasonable charge.
No one may legally review your credit file unless it is for a permissible reason. Anyone who knowingly and willfully obtains a credit file under false pretenses may be fined and imprisoned.
When credit is denied based on information in a credit file, the credit grantor must tell you the name and address of the credit reporting agency that supplied the file and, upon your written request, the reason for the denial.
If you dispute the accuracy of information in your credit file, the credit reporting agency must investigate within 30 days.
Your file must reveal who has received a copy within the past two years for employment purposes or within the past year for any other purpose.
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