Establish and Fix Credit presentation

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HOW TO CREATE, ESTABLISH AND REPAIR MY CREDIT

COPYRIGHT@ by o p   Library of Congress Number   ISBN:       All Rights reserved. No part of this book may be reproduced, copied or transmitted in any form or by any means, electronic or mechanical, including photocopying and recording or by any information storage or retrieval system without the proper authorization and written permission of the owner of the author’s rights. : 

COPYRIGHT@ by o p Library of Congress Number ISBN: All Rights reserved. No part of this book may be reproduced, copied or transmitted in any form or by any means, electronic or mechanical, including photocopying and recording or by any information storage or retrieval system without the proper authorization and written permission of the owner of the author’s rights.

QUESTIONS: 

QUESTIONS What is a credit report? How can I obtain my credit report? Why is important to have a good credit report? If my credit is not perfect or good, can I fixed? How can I own a lot of money and still have a good credit? Can I negotiate my debts? How can I read my credit report? What is a FICO? Who are Equifax, TransUnion and Experian? What are my rights? I always pay cash, I think I have an excellent credit. What are my credit limits? How much do I own?

CREDIT REPORT: 

CREDIT REPORT Credit Report is like our personal financial resume Is not transferable, we can not create our own report The Bureaus of credit does for us. There are points that we can control and some we simple can not, we have to work with the factor that are in our hands. First of all, we have to know what is included in our credit report and what is not I have to know the law and know my rights

News update: 

News update 2009 – The Coming Credit Meltdown U.S. Consumer Credit Card Debt may crash The Economy ~ News Credit Card hike fright: Banks raising rates, even if you’ve paid on time Some Credit Card Companies Profiling Customers~ News Consumers Credit Card limits slashed as companies try to Reduce Risk ~ The Washington Post

What we can do?: 

What we can do? By the media it’s easy for some people to be influenced to believe that there is NO hope and NO way to get back on track. After working with 100’s of consumers on personal credit issues, the most commonly asked questions is “Is it possible to FIX my Credit” and “Does it really work”

Legal or not: 

Legal or not Is Personal Credit Repair Legal ? Are all credit repair companies legal?

The Fair Credit Reporting Act: 

The Fair Credit Reporting Act The Fair Credit Reporting Act: In 1971, Congress passed the Fair Credit Reporting Act (FCRA). The FCRA was passed with the intention to regulate the credit-reporting agencies (CRA). The Act spelled out all the rules and regulations that the credit-reporting agencies have to follow before they put anything on someone’s credit report. For the past three decades, those agencies have ignored most of the law. Information about “you” has to be accurate and verified before it is entered on your credit reports. If “reasonable procedures” have not been correctly followed, then any verified inaccuracies must be removed from your credit reports as defined in the FCRA. The three credit reporting agencies are Experian (formerly TRW), Equifax and Trans Union . There are other reporting agencies also that purchase their information from the Big-3, so if you can repair your credit with the Big-3, you basically repair it with everyone.

Personal Credit Restoration: 

Personal Credit Restoration The Federal Trade Commission which is a Federal Agency was created to investigate and eliminate unfair and deceptive trade practices in business, and initiated a specific body of legislation which was put in place to regulate the credit reporting agencies and protect YOU the consumer from unfair credit reporting. This legislation is called the Fair Credit Reporting Act. Look at section 611 of the FCRA which outlines the procedures in case of disputed accuracy on your credit reports. The FCRA empowers YOU the consumer the right to dispute and verify the accuracy of questionable items on your personal credit reports. So, this means you can in fact repair your own credit in accordance with the Fair Credit Reporting Act.

But this is the point.: 

But this is the point. The underlying problem for the consumer is that this is a self policing law. It’s completely up to YOU the consumer to police your own personal credit reports. It’s up to YOU to find any errors and it’s up to YOU to monitor any and all activity on your personal credit files with all three main reporting agencies. In the justice system you are innocent until proven guilty but in the credit reporting system YOU are guilty until you prove yourself innocent.

If you haven’t seen your personal credit reports recently keep in mind that you are entitled to: One FREE Credit Report annually Now don’t worry this won’t count as an inquiry when you order your FREE Annual Reports. : 

If you haven’t seen your personal credit reports recently keep in mind that you are entitled to: One FREE Credit Report annually Now don’t worry this won’t count as an inquiry when you order your FREE Annual Reports.

Credit Restoration Companies: 

Credit Restoration Companies Despite the massive efforts of the credit reporting agencies (which are privately held companies) to convince you otherwise, there are many credit restoration companies that are no different than most other services. Like all industries, less-than-honest companies do exist and are damaging to their clients and to the credit restoration industry as a whole.

Continuation: 

Continuation Because the credit restoration industry was completely unregulated in the mid to late 1970’s, hundreds of credit restoration companies sprung up all over the place. Most of them were dishonest and were interested only in stealing money from gullible consumers. As a consequence, thousands of consumers were milked out of millions of dollars while receiving little, if any of what was promised to them.

Fair Trade Commission: 

Fair Trade Commission As a result the FTC initiated another legislation called the Credit Repair Organization Act (CROA) that outlines how these companies may legally operate. This Federal regulation is proof that the industry as a whole is legal and not a scam. I think the reason why there has been this general negativity about credit restoration companies is because of the few bad companies that have given the industry as a whole a bad name. The FTC regulates credit agencies and credit repair organizations.

FTC cont…: 

FTC cont… Take a look at the definition of a Credit Repair Organization (look at Sec. 403 Definitions) (3) Credit repair organization (A) means any person who uses any instrumentality of interstate commerce or the mails to sell, provide, or perform any service, in return for the payment of money or other valuable consideration, for the express or implied purpose of ( i ) improving any consumer’s credit record, credit history, or credit rating; or (ii) providing advice or assistance to any consumer with regard to any activity or service described in clause ( i )

FTC cont..: 

FTC cont.. Section 404 Prohibited Practices (b) payment in advance—NO credit repair organization may charge or receive any money or other valuable consideration for the performance of any service which the credit repair organization has agreed to perform for any consumer before such service is fully performed. Basically, a credit restora tion company cannot charge you for credit restoration upfront!

FTC cont…: 

FTC cont… UNLESS the Credit Repair Company is exempt from CROA which are: non profit 501(c) 3 or CUSO (Credit Union Service Organization) or CUSO affiliates This means that there are a very select few credit restoration companies out there.

FTC cont…: 

FTC cont… Section 403 definitions (B) does not include: These organizations and institutions include any nonprofit organization which is exempt from taxation under section 501(c) of the internal revenue code and any depository institution (as that term is defined in section 3 of the Federal Deposit Insurance Act) or any Federal or State credit union (as those terms are defined in section 101 of the Federal Credit Union Act), or any affiliate or subsidiary of such a depository institution or credit union.

CREDIT CONTROLS OUR LIVES IN USA : 

CREDIT CONTROLS OUR LIVES IN USA Limits or expands our financial stability. Increases or decreases our quality of life. Opens or closes doors to employment opportunities and promotions. Affects our income by way of interest rates. Limits or expands our purchasing power. Increase or reduce the interest that we are paying. Controls our cash on hands. You may even have a hard time getting a job or a competitive insurance rate.

CREDIT FACTS: 

CREDIT FACTS Credit Cards-Debt is a 2 Trillion Dollar Industry Americans are the biggest spenders Approx 83% of Divorces are due to Financial Problems What about the other 17% ….. mmmmm Bankruptcy Relief is now more difficult to file due to the new “Means Test” (as of October 2005) January 2006 - Min. Monthly Payments for credit cards increased from 2% to 4% causing already strapped consumers financial hardship All of your Creditors can increase your interest rates whenever they choose too

FICO: 

FICO Fair Isaac Company Provides risk assessment software to the 2 Credit Reporting Agencies (CRAs) Trans Union & Equifax Experian (formerly TRW), no longer works with FICO Vantage Score Scoring Model developed by the Big 3 To compete against FICO - Range from 501 -900

FICO Score Basics: 

FICO Score Basics Scores are damaged by the most recently reported derogatory information Derogatory information reported prior to 2 years does not highly impact score FICO has 88 Negative Rating Factors and only 6 Positive Rating Factors FICO measures whether a person is moving towards or away from Bankruptcy There are only 5 basic scoring factors that you can control

FICO scoring factors you can control: 

FICO scoring factors you can control 35% Payment History 30% Amounts Owed 15% Length of Credit History 10% New Credit 10% Types and Numbers of Credit Cards in Use

What can WE do: 

What can WE do 01 Amount owned on accounts is too high 03 Too few bank revolving accounts 04 To many bank or national revolving accounts 05 To many accounts with balances 08 To many inquires last 12 months 09 To many accounts recently opened 11 Amount owned on revolving accounts is too high 12 Lack of recent bank revolving information 33 Proportion to loan balances to loan amount is too high

PowerPoint Presentation: 

BALANCE SHEET Name of financial institution or Bank Total Credit Actual Balance Percentaje credit/debt Interest Rate Projections

How Many Points Do You Lose ?: 

How Many Points Do You Lose ? a. Trade Lines Payments (8-20 pts) b. Late payments on Mortgages (15-45 pts) c. Paid/Unpaid Collections (15-30 pts) d. Judgments (20-30 pts) e. Federal & State Tax Liens (20-30 pts) f. Foreclosures (100-300 pts) g. Short Sales (100-200 pts) h. Bankruptcy (70 – 300 pts)

inaccurate, erroneous, or obsolete : 

inaccurate, erroneous, or obsolete Inaccurate information is any information that cannot be verified by the CRA and/or the creditor. Erroneous information is any information that has been entered onto a consumer’s credit reports due to human error (data entry error), Social Security Number mismatch error, mixed file error, similar names error, “reasonable procedures” were not followed when the information was entered on the credit report, or any such related error. This happens more often than you think! Obsolete information is any information that is beyond the industry standard of seven years; or ten years for bankruptcy.

FICO Advantages: 

FICO Advantages Consumers obtain loans faster Credit decisions are fairer Older credit problems count for less - Great for Bankruptcies More available credit Credit rates are lower over all With an understanding of the system, a person can improve his or her credit rating from D to A credit

How do “Inquiries” count?: 

How do “Inquiries” count? HARD INQUIRIES Only “permissible use” credit inquiries count against you, including credit card offers you’ve applied for. SOFT INQUIRIES Credit reports you pull yourself or from a consumer site do not count. Marketing inquiries also fall in this category. For Mortgage or auto loans, FICO counts multiple inquiries during a 30-day period as just one inquiry. In the old Scoring Model, multiple inquiries were counted as one inquiry within a 14-day period.

Length of time the following items stay on Credit Reports?: 

Length of time the following items stay on Credit Reports? Bankruptcies 7, 11 and 13 10 Years Collections 7 Years Public Record 10 Years Inquiries 2 Years Chex Systems (for banks) 5 Years Telecheck (for merchants) 5 Years SCAN (for merchants) 5 Years Regulated by FTC through Fair Credit Reporting Act

Collections, Judgments & Liens: 

Collections, Judgments & Liens Do not be too quick to pay an old collection account; depending if you’re getting a loan or just repairing credit. Judgments will reflect as “Satisfied” when paid. Collections will reflect as “Paid” when paid. Liens will reflect as “Released” when paid.

WEB SITES to Check out: 

WEB SITES to Check out www.transunion.com www.equifax.com www.experian.com

Privacy Marketing & Junk Mail : 

Privacy Marketing & Junk Mail Stop telemarketer phone calls: www.donotcall.gov 888-382-1222

What solutions exist in our current situation and what do you want to do?: 

What solutions exist in our current situation and what do you want to do? Establish credit Improve credit Get out of debt Reduce interests rate Consolidate debt Get more Credit Pay or negotiate Collections Put a red alert on Bureaus Buy a property Refinance a property and use the investment to buy another property Debt consolidation Pay off Negotiate specific accounts BK Debt Management

CONTINUATION: 

CONTINUATION First step is to run the Credit Report and do specific analysis. Then, do what you want to do.

PowerPoint Presentation: 

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