Class 4 - used in last 3 months Universal Default-If you...

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Credit Bureaus - Equifax - Transunion - Experian Credit Bureau Data →Fair Isaac and Company (FICO Credit Score) FICO Score - 35% payment history o Pay your bills on time o Types of credit Credit cards Retail cards Installment loans Mortgages o Late or missed payments How late? How much? How recent? How many? - 31% Amount owed o How much is too much? o Amount owed on all accounts o Balance on accounts- # and % of credit limit – utilization ratios o Close accounts? - 15% Length of credit history o How long have the accounts been established? Keep the oldest. o How long since you used them? o Stagnant, paid off cards not used in score - 10% Taking on more debt o Greater risk – opening too many in a short period of time o Requests. Same types, 2 weeks, counted as one. Yours is never counted. o Good history after bad. - 10% Types of credit used o Healthy mix? o Experience with credit cards and installment loans? o How many of each? Issue Pro Con Joint Owner Helps Liability Authorized Signature Helps Not Liable Inactive Cards Shows less than 50% usage Only used in computation if
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Unformatted text preview: used in last 3 months Universal Default-If you are late on a payment on ANY loan other lenders can raise their interest rate. Card Act of 2009 No more universal default!! o Interest rates: No increase in rates on past purchase unless over 60 days late Get old rate back after 6 months of on time payments No rate increase in first year Must give 45 day notice before an increase Payments got the highest rate first o Fees: No over-the-limit fees unless you give pre-approval. Opt-in?? Opt out?? 21 days (not 15) to make payment before considered late. o No one under the age of 21 can get a card without a co-signer or proof that they are able to repay the credit. Therefore:-Pay on time-Two (or 3) cards-Guard against extremes o Late payments o Collection agencies o Charge offs o Judgments, liens, garnishments o Large amounts of available credit Credit Report Analysis www.annualcreditreport.com...
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This note was uploaded on 12/01/2011 for the course HDFS 238 taught by Professor Boyce during the Fall '10 term at Michigan State University.

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Class 4 - used in last 3 months Universal Default-If you...

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