20 STEPS TO IMPROVE YOUR CREDIT SCORE APPROVED CREDIT SCORE SUPER FAST CREDIT RANKINGS

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1 20 STEPS TO IMPROVE YOUR CREDIT SCORE APPROVED CREDIT SCORE SUPER FAST CREDIT RANKINGS

2 2 Approved Credit Score APPROVED CREDIT SCORE CONGRATULATIONS! // YOU RE ONE STEP CLOSER TO ACHIEVING CREDIT WORTHINESS. Before you begin, you should know some basic facts and information regarding what a credit report is, the bureaus, and who reports to them, and why it is important to maintain a high credit score. Knowing what a credit score contains and what is found inside the credit report can make you a smarter and wiser consumer. It can also help you make better financial decisions. Why Your Credit Score Can Affect Your Whole Life Your credit score can determine where you live, where you work, your insurance premiums, loans, credit cards mortgages, and bank accounts. This three digit number literally can change your life depending on how high or low it is. DID YOU KNOW?? Some employers will check your credit report prior to hiring you. Much like a creditor, some employers will look at your credit to determine what kind of employee you will be. Unfortunately, they may assume a credit report with derogatory items on it means that you are irresponsible. Insurance companies will check a potential customer s credit for partially determining what insurance premiums they will be considered for. Depending on your score, this can considerably affect your monthly payment. You re probably asking yourself why is my credit considered when determining my accident risk? Well, the best comparison example to this common question is the same reason insurance companies offer student discounts for good grades; to them it reflects the driver s level of responsibility and how the driver makes decisions. No matter how inaccurate or unfair this may sound, it s true! Whether you are aware or not, your credit is also checked when renting an apartment. This unfortunately can cause some potential renters to pay very high security deposits in order to move in, or worse, make you ineligible to live there. For many people, these high security deposits are simply out of reach for them, and their once dream apartment is now all but a memory. Lastly, the most common use for your score, which most consumers are aware of, is for the credit based applications. Items such as credit cards, home mortgages, loans, and bank accounts are all based on your score. The value of your score will determine whether you are approved and what interest rate you will be considered for. The difference between a few percentage points of an interest rate can cost you thousands of dollars! For example, the difference between a 6% and 8% interest rate on a $25,000 car loan over 60 months can cost you and additional $1500 in interest alone!

3 3 Approved Credit Score INFORMATION ABOUT YOUR CREDIT SCORE // Your credit score predicts the likelihood of you going 90 days or more late on any one account on your credit report in the next 24 months. It is a statistical number based on the analysis of your credit file at that moment in time. Your credit score is very fluid and moves regularly with the information that the creditors provide. Your credit score is based on the information contained in your credit report, as documented by the credit bureaus. Creditors use this number to determine whether or not they want to give you a loan and the probability of you paying on a timely fashion. You re probably wondering how your credit score is calculated. This is the most common formula of how it broken down: 35% Payment History Timing of delinquencies - was it last month or 3 years ago. Level of delinquencies - (30, 60, 90, 120 days late). Last activity date. 30% Amount Owed Total Debt. How many accounts with balances. Overall installment and revolving utilization. Individual account utilization. 15% Length of Credit History How old is the oldest account? What is the average age of accounts. Mix of newer or older accounts. 10% Mix of Credit What kind of credit do you have in your file (mortgages, credit cards, loans, etc). The combination of credit (all the same type of credit does not look as favorably as a healthy combination of different types). It s hard to get someone to be the first to give you a car loan if all you have is one department store card that you ve had for 2 months. 10% Inquiries How much new credit are you acquiring. The time interval between each new credit acquired (acquiring many new credit cards or loans in a short time can affect your score negatively). How many new accounts are on file. Inquiries stay on your credit report for 24 months but only affect it for 12 months. + DID YOU KNOW? 79% of all credit reports contain numerous errors! (that s about 160 million reports from any one credit bureau!) Public Interest Research Group (PIRG)

4 4 Approved Credit Score WAYS TO IMPROVE YOUR CREDIT SCORE // ORDER YOUR CREDIT REPORTS Once a year you are able to order a free credit report from the three main credit bureaus. The 3 main bureaus are Equifax, Experian, and TransUnion. Look at the information reported to each of the bureaus. Keep in mind that some of the information may be different due to the fact that some creditors only report to certain bureaus. There are a number of credit report websites that you can retrieve this information from. The best credit report website for a totally free report is annualcreditreport.com. Try to review your credit report monthly in order to keep on top of your credit. You can do this by subscribing to a Credit Monitoring Service that provides a monthly update of account information. Also if you are denied credit, employment, or insurance due to your creditworthness, you have 60 days to request a Free Credit Report after receiving a denial notice. EXAMINE YOUR REPORTS CAREFULLY It is sad to say, but keeping a clean credit report is your job. Credit bureaus do not verify the information they receive from creditors. Any negative information on your credit report can cost you a lot especially if you are trying to get a mortgage, personal loan, car loan, or credit card. Once you receive your credit report look over every detail. Even the misspelling of your name or wrongly reported address is an error that can be corrected. Remember that late payments and charge-offs remain on your credit report for 7 years; Bankruptcies remain on your report for 10 years. Making consistent payments will improve your credit over time. DISSOLVE YOUR DEBT The next step you can take on the path to improve your credit is to dissolve your debt. Begin by drawing up a spending plan (budget) that fits your financial status and allows you to make payments on time and consistently. If you are having trouble making payments, call the creditor and negotiate a lower payment and/or due date. Keep in mind not to close your credit accounts after they are paid off. It will hurt your score to close the accounts then to keep them open. Also keep your balances low on revolving accounts. This will help with keeping your interest charges down and your score will benefit from it as well. ADD STABILITY TO YOUR CREDIT FILE Last but not least, start rebuilding your credit file today. You may have been denied credit even though you have credit but some creditors like gas companies or credit unions, may not report to the three bureaus. If they do not, think about choosing another creditor. The faster you begin to repair your credit, the faster your score will go up. Start now! Lenders are looking for reliable borrowers that will pay their bills on time, in full, and on a regular basis. They determine this by what is listed on your credit report, a record that is kept over a long period of time based on financial accounts in your name. The criteria for obtaining credit can differ from lender to lender, some are based on income and some are based solely on credit history alone. Certain lenders require a perfect credit record and high credit score, and some are based solely on credit history alone. Others are more lenient and will allow a few late payments here and there. The best way to be sure you will receive a loan or any other type of credit is the future, is to always pay bills on time.

5 5 Approved Credit Score WHAT IS ON YOUR CREDIT REPORT? There are two different types of trade lines on a credit report - positive and negative. A positive tradeline is any type of tradeline that will increase your credit score and allow you to receive credit in the future. A negative trade line is a negative item or derogatory item on your credit report and can lower your credit score. Ok, so you have your credit report... but what exactly does everything on the credit report mean? There are so many terms on a credit report that can be confusing or even intimidating - but they don t have to be! All you have to do is learn what those terms mean. Once you are educated on your credit report, it will be easier to find out if your credit report data is inaccurate. Remember, credit reporting bureaus make money whether the information is accurate or not, so get smart and find out the facts. REVOLVING ACCOUNT A revolving account is basically another name for a credit card account. It is called revolving because the full balance does not have to be paid each month - only a minimum balance set by the creditor. If there is a high outstanding balance, it is transferred over to the next month. However, if the minimum is not paid, a late charge is placed on the account which greatly damages your credit score. Also running a card to its limit looks bad on your credit report because it shows that you may have a problem paying your debt off. The best thing to do is to make a charge and pay it off in full as soon as you receive the bill from the creditor. Not only will this look good on your credit report, but it will save you from paying money in interest. CLOSED/INACTIVE ACCOUNTS Accounts that you have had in the past that that you no longer use do not count in your credit score and are considered inactive accounts. A closed account has either been closed the creditor or the consumer themselves. It used to be that when a creditor closed your account it was more damaging to your credit report than if you did it yourself as the consumer. With newer scoring models, it does not matter who closes the account, you or the creditor, it still affects the score. LATE PAYMENTS Late payments are one of the most common things to find on a credit report, but also the hardest thing to dispute. A thirty day late payment can significantly lower your score, and hinder your chances of getting credit cards in the future, because it shows that you have trouble making payments. It makes little difference whether you pay the minimum or the full balance, as long as you make the payment on time and you have not over utilized the account. However, the best thing to do is always pay your full balance to avoid any problems with debt in the future. CHARGE OFF/PROFIT AND LOSS ACCOUNT A Charge Off or Profit and Loss Account is an account that has been so overdue that they write it off as uncollectible. Usually these accounts come from credit card accounts, medical bills, utility bills, loans or any type of account that is not paid on time. Charge offs can remain on your credit report for up to 7 years from the 30-day delinquency that sent you into the charge off. This is not something potential lenders want to see because this shows that you never paid your debt, and you may do the same thing with the money you borrow from them. The smartest thing to do is to pay your past due amount before it becomes a late payment or a charged off account to ensure you will receive credit in the future. COLLECTION ACCOUNTS A collection account is an account sent from a creditor to an outside agency or its own collection agency in order to collect an unpaid debt. After an account is charged off, it usually will go into collections, because they still want to receive money for the debt. This account can now be on your credit report in two places, listed as a charge off with the original creditor and as a collection with the collection agency. It is always better to pay a charge off or collection account rather than to leave it as unpaid. On a credit report there are paid collections and unpaid collections. When disputing information on your credit report, if you have documentation that you have paid a collection or charge off account, it should state that on your credit report. Creditors will see this and note that even though you were late making the payment, at least it is paid. However, some creditors will reject a potential borrower just for having a collection account or charge off on their credit report, so always pay bills on time! + DID YOU KNOW? 68% of families have a Credit Card. 55% of these families pay off the balance each month. Federal Reserve Bulletin, June 2012 INQUIRIES At the end of every credit report, there is a list of creditor names who have requested your credit report recently. It is better to have fewer inquiries because it shows that you are applying for less credit, and more inquiries could indicate a potential bad situation to lenders. Each inquiry stays on your credit report for 2 years and could damage your credit. MORTGAGES/FORECLOSURE A mortgage is a loan a person takes out to purchase their home and is one of the most significant trade lines on a credit report. When a lender looks at how a person paid their mortgage, they look at how many late payments there were and if the home went into foreclosure. If a home goes into foreclosure, it shows that the person simply was not paying their mortgage or could not afford their mortgage. This is a major derogatory and one of the worst things to have on a credit report, and will remain on your credit for 7 years. However, there is a simple solution to having a foreclosure on your credit report. Either pay the mortgage on time, or dispute it with the credit reporting agencies. A lot of the time, they report the information inaccurately, and can damage someone s entire life.

6 6 Approved Credit Score W H A T I S CREDIT REPAIR? // In order to understand what credit repair is, you must first understand what a credit error is. The law defines a billing error as any charge: for something you didn t buy or for a purchase made by someone not authorized to use your account; for something that is not properly identified on your bill or for an amount different from the actual purchase price or was entered on a date different from the purchase date; for something that you did not accept on delivery or that was not delivered according to agreement. Billing errors also include: errors in arithmetic; failure to show a payment or other credit to your account; failure to mail the bill to your current address, if you told the creditor about an address change at least 20 days before the end of the billing period; questionable items, or any item for which you need more information. Once you have written about a possible error, a creditor must not give out information to other creditors or credit bureaus that would hurt your credit reputation until the matter is resolved. And, until your complaint is answered, the creditor may not take any action to collect the disputed amount. The law is on your side if information on your credit report is proven to be false but is not removed, according to the Fair Credit Reporting Act. Under the law, you are entitled to actual damages, plus punitive damages that the court may allow if the violation is proved to have been intentional. In any successful lawsuit, you will also be awarded court costs and attorney s fees. If you feel that a credit bureau has not responded promptly and fairly to your situation, contact the attorney general of your state or the Federal Trade Commission in Washington at 202-FTC-HELP. You may also sue any credit-reporting agency or creditor for breaking the rules about who may see your credit records or for not correcting errors in your file. A person who obtains a credit report without proper authorization -- or an employee of a credit reporting agency who gives a credit report to unauthorized persons -- may be fined up to $5,000 or imprisoned for one year, or both. A lot of people can see that report -- including everyone to whom you have applied for a loan or credit. So be careful when applying for credit. When the companies you apply for credit check your report, they can find out who else has been checking your report and determine what, when and how you have been applying for credit. That means if you have been getting turned down and are desperately applying for credit all over town, your potential creditors will know. Credit errors and inaccuracies can seriously reduce your credit score. There are laws that aid consumers in their pursuit of credit repair. Safe Credit Solutions can facilitate the process for you in what is an often frustrating and drawn-out process. A credit repair organization can help legally ID and dispute unverifiable or inaccurate information from your credit report. However, make sure to check with the BBB to make sure this is not a fraudulent credit repair organization before you sign up. Also, remember that some companies will advertise that they can help you remove items and get them deleted for sure but that is never the case. A lot of agencies use illegal methods of removing items from your credit report such as starting you a new credit identity.

7 7 Approved Credit Score THE THREE MAJOR BUREAUS // There are three major credit bureaus that collectively compile your credit report. A credit report is used to show your creditworthiness to lenders and other agencies that require a credit check. It determines your interest rate and your credit rating. Who are the three main bureaus? They are Equifax, Experian and Transunion. They do not compile one giant credit report; instead three separate credit reports from each bureau are generated. They don t all collect the same information from lenders and collection agencies; instead, the lenders and collection agencies get to pick and choose the companies they will report information to. You can get all three credit reports from annualcreditreport.com. You can also subscribe to a 3-in-1 Credit Monitoring Service (for a fee) and get all three reports immediately and monitor your progress month to month. Remember you can only ask for your reports once a year or when you have been denied credit from the credit bureaus at no charge. EQUIFAX Customer service: Headquarters: Atlanta, GA Revenue: billion USD (2016) Number of employees: 7,000 Founded: 1899, Atlanta, GA EXPERIAN Customer service: 1 (888) Headquarters: Dublin, Republic of Ireland Revenue: 4.55 billion USD (2016) Number of employees: 17,000 Founded: 1996 TRANSUNION Customer service: Headquarters: Chicago, IL Revenue: billion USD (2016) Number of employees: 4,700 (2016) Founded: February 8, 1968

8 8 Approved Credit Score WHO ELSE CHECKS YOUR CREDIT REPORT? // You need to build good credit in order to maintain a stable financial status. Depending on what your credit score is, your interest rates and loan opportunities could either be high (above 720) or be low (under 620); therefore, having good credit affects how much interest you will be charged. Some people believe that the only people to check your credit score are lenders. However, they re wrong; many other businesses and landlords will check your credit score to determine your financial maturity. HOUSING RENTAL In big cities where landlords can pick and choose their tenants, many run credit checks on their prospective tenants. Why? The answer: Because it s not worth the risk of having someone financially irresponsible living on their property. Having no credit score is just as bad as having bad credit. INSURERS Like lenders, insurers do routine credit checks to check credit history. The person s credit history is usually the base on their premium rates for that individual. From car insurance to health insurance, they believe that credit is the best predictor on if the person will file a claim in the future. Now, having a good credit score will make your rates lower than having a good driving record. About eighty percent of insurers use credit when determining to accept or deny someone s application. PROSPECTIVE EMPLOYERS In a report from the Society of Human Resource Management, a study showed that over 95 percent of employers do a background check on their prospective employees. Included in this report is your credit history and could make the difference on whether or not you get hired in the company. A human resource manager named Johnny Taylor of IAC/Interactive Corp states that bad credit often eliminates an applicant from hiring consideration. CELL PHONE AND UTILITY COMPANIES Some cell phone providers also use credit reports to determine to accept your business or not. Even the most basic services such as gas and electric as well as cell phone companies look at the reports to see if you have defaulted on any payments and will deny you if you do. If they accept it even with your low credit score, they might charge you a very high deposit, require a cosigner, or just pay higher rates.

9 9 Approved Credit Score 20 STEPS TO IMPROVING YOUR CREDIT SCORE // 01 Learn everything there is to know about credit and what is on a credit report. This knowledge will help you keep a good financial history and know more about keeping a high credit score. Also, when you pull your credit report you will not be frustrated because you will understand what everything means. 02 Pay bills on time before they are due. This looks great on a credit report. Not only does it keep the account current, but it raises your credit score. Future lenders will see this as positive aspect in your payment history. 03 Use Credit Cards. Having a credit record is much better than not having any record. If you do not have any records on your credit report, future creditors will not know what type of borrower you are. As long as you keep a current balance on revolving accounts, use credit cards! Many credit cards even have rewards for using them such as frequent flyer miles or rebates. 04 Have a large range of credit types. Lenders want to see that you are applying for different types of credit rather than only credit cards or only loans. It shows them that you can pay back all kinds of debt rather than just a small credit card bill or a student loan. If you have an auto loan, a mortgage, two credit cards, and a student loan and they are all current then you are a responsible debtor. 05 Keep balances low. Always running your credit cards up to the limit looks very irresponsible, especially if you are only paying off the minimum balance each month. The best way to handle revolving accounts or any other type of debt is to keep the balances low and pay as you go Do not apply for too much credit. Every time you apply for any type of credit, it shows up on your credit report for two years! This is called an inquiry, and affects you negatively. When lenders see that you are applying for credit all over town it looks dangerous to them. It could mean one of two things: you are being denied repeatedly or you are on a serious spending spree. Try to keep the inquiries down to a minimum, because lenders check that out on your report and definitely want to see only a few. Refinance! If for some reason you had a low credit score when you applied for a home, auto or any other type of loan, then you probably have an extremely high interest rate. The best thing to do if your credit score has increased is to refinance for a better rate or term. It may not seem like the best idea short term, but it can save you tons of money and increase your credit score in the long term. Learn how to deal with collection agencies. A lot of people think that collection agencies are allowed to harass them, but this is not so. Do not listen to what they say - the damage is already done to your credit score. They are only trying to scare you into paying the debt. However, an unpaid collection account looks worse on your credit report than a paid collection account. If you find yourself in a bad situation with a collector, then you should know your rights. There are laws to protect consumers against the harassment of collectors, and you can report them to the Better Business Bureau. Remember when you receive a medical bill with a deductible or a charge that you feel is the insurance companies responsibility, you need to pay the bill and then fight with the insurance over whose responsibility it was. If you don t, the medical provider will send you to collections, and then you will have a collection on your credit report which will cause your score to go down. Just remember it is always easier to fight with the insurance company than try to remove a collection from your credit report. 10 Always pay the balance off rather than the minimum payment each month. If you have a high balance and are paying the minimum every month, you will just be paying double the amount in interest! The best thing to do is to pay off large chunks of the balance or even the full amount each month. If you make small charges and pay them as you go it will look the best on your credit report.

10 10 Approved Credit Score 20 STEPS TO IMPROVING YOUR CREDIT SCORE // 11 Online Bill Pay. If you know that you have trouble staying organized, choose online bill payment. It is automatic and will make your life a lot easier, as well as keep your bill current. Also, if you are going out of town you should enroll in online bill pay to make sure that your bills are still being paid on time while you are gone. 12 Talk to lenders and creditors. Ask them waive the late fees and payments, some of them would be happy to do it and not have it show on your credit report. Explain the situation to them and let them know why the payment did not go through. Do not hesitate to communicate with them- what is the worst that could happen? Start building credit early. When you are a student, you can apply for great student cards, or even have your parents start building credit in your name. Just make sure that the balance is paid off in full and has no late payments. Some young people go on spending sprees because they do not understand credit - do not become one of those people! Another good way to build credit is student loans. Many people do not pay their student loans and they become negative accounts, so it is important to pay them off. Watch out for identity theft. In today s day and age, there are many bad people out there just waiting to steal someone s identity so it is important to keep all your personal documents secure. Always know where your wallet or purse is, and never give your social security or credit card information to anyone that you do not trust. There are also companies out there to protect people from identity theft, which is a great asset to consumers. Don t make excuses or put it your financial situation on hold. There is no excuse or reason to put off a poor credit score. If you think that it is not important, you may want to think again. A good financial background is one of the most important things when trying to buy a home, an automobile, student loans, regular loans, credit cards, or any other type of funds! Not only does a good credit score affect you financially, but it can affect you when trying to find employment, insurance, or even a place to rent. Check your credit reports regularly. Once a year, you are entitled to a free credit report from annualcreditreport.com, but you can check it more than once a year if you d like. It is very important to keep track of your credit report to make sure that no one has stolen your identity, and your information is being reported accurately. Also, it shows responsibility to check your credit report on a regular basis and always know that you will be able to receive credit in the future. Dispute inaccurate information on your credit report. If you see that on your credit report that there is inaccurate, misleading, or unverifiable information, then you should take it up with the credit reporting companies. This inaccurate information will impact your credit score more than you would believe! 18 Learn to budget and live within your means. This is the most important thing that anyone can do, without a budget it is easy to overspend. The most important thing is rent, utilities, auto, and food, anything else is just extra. Try to cut out the things in your life that you cannot afford to avoid future debt, such as eating out or lavish shopping. 19 Don t move around a lot or change jobs frequently. All of this information shows on your credit report, and shows instability. Creditors want to see that someone is responsible and going to be in the same place for a long time financially. Moving and changing jobs shows that you are unstable, and reflects on your status as a borrower. 20 Always be aware of your general financial status as a borrower. Not only is this your responsibility, but it is your job! If you do not keep track of your credit score, then you may not be able to receive credit in the future due to identity theft or inaccurate information on your credit report. Start today!

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