GUASFCU Credit Forum

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GUASFCU Credit Forum

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GUASFCU Credit Forum Ashley Mancuso- Chief Lending Officer 10-11 Rachael Piltch-Loeb- Chief Lending Officer 11-12 Angela Christian- Vice Chair of Credit 10-11 – PowerPoint PPT presentation

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Title: GUASFCU Credit Forum

1
GUASFCU Credit Forum

Ashley Mancuso- Chief Lending Officer 10-11
Rachael Piltch-Loeb- Chief Lending Officer 11-12
Angela Christian- Vice Chair of Credit 10-11

A Georgetown Tradition
2
Why does Credit Matter?
3
More Important than Income

Higher credit scores mean lower rates
Who looks at your credit score?
Landlords
Insurance companies
Potential employers
Creditors
Car dealerships
Credit scores vs. income
A credit score indicates a persons likelihood of
paying back money you borrow
Income represents an individuals cash flow

4
What is a Credit Score?

A number that represents your calculated measure
of credit risk
A complex mathematical formula that takes into
account numerous factors in your credit history
Scores range from 300-850
Average Credit Score in U.S. 692

5
State by State Average Scores
6
The FICO score

First developed by FairIsaac in 1958
Calculated by the 3 major credit bureaus
Equifax
TransUnion
Experian
Each bureau calculates it differently

7
What Factors Determine Your Credit Score?
8
How to Start Building Your Credit

Diversify your lines of credit
Unsecured Loan/Secured Loan
Education Loan
Credit Card
Personal Line of Credit
Mortgage
Stay away from your limits
Be aware of your total outstanding debt
Build history with a creditor rather than moving
money around

9
Credit Score Distribution

Based on the general population's FICO scores,
the ranges and percentages of scores are
20 are above 780
20 are in the range of 745 - 780
20 are in the range of 690 - 745
20 are in the range of 620 - 690
20 are below 619

10
Why Does a Credit Score Matter?

Lower credit scores mean higher rates or credit
denial

11
The 100 point difference620-720

330,000 House
Mortgage of 300,000 for 30Y
Credit Scores
720 (4.804) versus 620 (6.171)
Monthly Payment 1,575 vs. 1,832
Difference of 257 every month

12
The 100 Point Difference

92,520

13
What Shows Up in a Credit Report?

Personal information
Credit history
Inquiries
Public records
Collection items

14
FICO Score Simulator

http//www.bankrate.com/calculators/credit-score-f
ico-calculator.aspx

15
What Does a Credit ReportLook Like?
16
Page 1
17
Page 2
18
Page 3
19
Items on Report
Current Balance
Creditor
Scheduled Payment
High Credit
Actual Payment
Credit Limit
20
What can YOU do?

Know your credit report
Financial Discipline is Key
Open a credit card
Use sparingly at first
Never outspend your bank account
Sign up for automatic reminders
Choose a card that fits your needs

21
What to Look for in a Credit Card

Think about your lifestyle
Interest Rates
Grace Period
Fees
Client Perks (airline miles, reward points)
Size of credit line

22
Bottom Line

Shop around!
Lots of competition in the credit card market
Do not sign up for a credit card impulsively
Read the fine print of credit card disclosures
www.CreditCards.com
Financial Discipline

23
How to See Your Credit Report

www.annualcreditreport.com
Its free to see the items included in your
credit report (inquiries, payment histories,
etc.)
However, it costs 7.95 to get your actual FICO
score

24
Our Interest Rate Schedule