Credit Approval Process

1
Credit Approval Process

• You apply for credit.
• Credit Application
• Credit History
• The lender conducts a credit investigation.
• Credit Rating
• Credit Report
• Credit Bureau
• Credit Scoring (or Risk Scoring) System

2
Credit Approval Process

• The lender decides whether to accept the
  application.
• Credit Agreement
• Promissory Note
• Tiered Pricing

3
Unfair CreditDiscrimination is Unlawful

• Equal Credit Opportunity Act (ECOA)
• Unfair discrimination is illegal.

4
Making Sense of YourFICO Credit Scores
5
Your Credit Reputation

• Building a credit history
• Establish both a checking account and a savings
  account.
• Have your telephone and other utilities billed in
  your name.
• Request, acquire, and use an oil-company credit
  card.
• Pay off student loans.
• Ask a bank for a small short-term cash loan.

6
Your Credit Reputation

• Managing your credit bureau file for free
• Fair Credit Reporting Act (FCRA)

7
FCRA - Particulars

• If denied credit basked on your report, can get a
  copy of your credit report free within 60 days of
  your request.
• Inaccurate info must be corrected within 30 days.
• Only authorized persons have access to your
  report.
• Negative info can be reported for 7 years and
  bankruptcy for 10 years.