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Credit Reporting

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4 out of 10 people have been 30 or more days late on a payment. ... Information is reported to credit bureaus (Equifax, Experian, Trans Union) ... – PowerPoint PPT presentation

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Title: Credit Reporting


1
Credit Reporting Credit Scores
  • Chris ConwayNorthwest Education Loan
    Association

2
  • Average consumer has 11 credit obligations on a
    credit report
  • 7 are likely to be credit cards
  • 4 are likely to be installment loans

3
  • 4 out of 10 people have been 30 or more days late
    on a payment.
  • 2 out of 10 people have been 60 or more days late
    on a payment
  • 85 of consumers have never had a loan 90 days
    delinquent

4
  • 25 of credit reports had errors serious enough
    to cause consumers to be turned down for credit
    or a job!

5
Credit Reports
  • How do they get created?
  • Whats included on a report?
  • How do you read one?!
  • Why is a report important?

6
Credit Reports
  • How do they get created?
  • Information is reported to credit bureaus
    (Equifax, Experian, Trans Union)
  • Creditors usually report on a monthly basis
    whenever a change occurs
  • Creditors may not report to all credit bureaus

7
Credit Reports
  • Whats included on a report?
  • Identifying Information
  • Trade Lines
  • Inquiries
  • Public Record and Collection Items

8
Credit Reports
  • How do you read one?

9
Credit Reports
  • How do you read one?

10
Credit Reports
  • Why is a credit report important?
  • Affects your ability to qualify for credit,
    receive lower interest rates, rent an apartment,
    qualify for insurance, or even get a job
  • Your credit report becomes your credit score

11
What is a credit score?
  • A number that helps lenders and others predict
    how likely you are to make your payments on time.
  • 300-850, most people are in 600-700 range

12
What is a credit score?
  • The number will change based on your credit
    report- at least monthly
  • The score may be different depending on which
    credit report is used
  • The number is created by companies such as Fair
    Isaac (FICO score) or individual credit bureaus

13
What is a credit score?
  • How is it calculated? Ex. FICO score
  • 35 your payment history
  • 30 how much you owe
  • 15 length of credit history
  • 10 new credit and requests
  • 10 other factors

14
Why does a score matter?
15
Why does a score matter?
16
Student Loan Reporting
17
Student Loan Reporting
  • Consolidation code 13 or 62
  • Rehabilitation guarantor trade line deleted
  • Paid in Full code 13 or 62
  • Settled in Full code 62

18
Student Loan Reporting
  • Other rules
  • School closure Delete
  • False certification Delete
  • Subrogation Delete, then ED reports
  • Death and Disability Metro 2 guidance was report
    62 (ECOA Code X for death)

19
Student Loan Reporting
  • Co-borrowers
  • More common with private loans
  • A co-borrower is considered a borrower in credit
    scoring models
  • If a borrower is delinquent, it will appear on
    the co-borrowers credit report too

20
Dispute Process
  • Fair Credit Reporting Act dictates a 30-day
    response period
  • Credit bureau notifies creditor within 5 business
    days
  • If no response within 30 days, trade line is
    deleted

21
Student Loan Disputes
  • Its not mine!
  • I only have one account with you, why is it
    listed 4 times?
  • Why is this same loan reporting 3 times?

22
Student Loan Disputes
  • I paid it off I dont owe that much.
  • The account was paid in full yesterday, why
    isnt it showing yet?
  • Im paying on time, why does it show 180 days
    delinquent in the history?

23
Student Loan Disputes
  • Im just the co-borrower, why is it on my
    report?
  • Im not in default (delinquent) because Im in a
    deferment.
  • I dont have to pay that back.

24
Minimize Disputes
  • Its all about education
  • Include information on your web site
  • Update all national credit bureaus

25
Upcoming
  • PLUS loans How to report a deceased dependent
    vs. deceased parent
  • TPD assignment

26
Upcoming
  • Credit counseling agreements as a result of
    bankruptcy legislation
  • More disputes as free reports are now nationwide!
  • Fraud alerts and Identity theft

27
FYI
  • www.annualcreditreport.com
  • 888.5OPT OUT

28
  • Questions?
  • Chris Conway
  • chrisc_at_nela.net
  • 206.461.5391

29
THANK YOU!Please be sure to complete your
conference evaluation forms after the conference!
  • Chris ConwayNELA
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