Credit Basics
What is credit?
Borrowing money with a promise to repay later
What are some ways you can establish credit history?
Become an authorized user, take out a secured credit card
How can I avoid late payments?
Set up automatic payments or set a reminder
What is a collection account?
The active effort to recover unpaid debt, either by the original creditor or a collection agency
How can I qualify for a credit card?
A steady income, good credit history, and a low debt-to-income ratio
FICO
How can you use credit cards responsibly?
Make on time payments and only use up to 30% of your credit limit
What is the standard credit utilization ratio?
30% of your credit limit
How can you repair a collection account on your credit report?
A debt settlement
What is APR?
Annual Percentage Interest Rate
What are the types of credit?
Revolving and installment
What is another type of credit that can you help you build your credit history?
Report it to the credit bureaus.
How can you validate a debt is yours?
Call for details or send in a debt validation letter.
What is a credit score used for?
Housing, loans, insurance, and even employments
What is the biggest factor in my FICO score?
On time payments
How can I avoid damaging my credit score?
Make on time payments, keep credit utilization low, and don't open too many accounts in a short period of time
What is a hard inquiry?
When a bank and/or lender pulls your credit report
What is an example of a credit rebuilding scam?
The Erase Promise, upfront fees, CPL or New Identity scams, and the Social Media Trap
What are the three credit bureaus?
Experian, Equifax, and Transunion
What is the range for credit scores?
300-850
What are some common mistakes people when building credit?
Maxing out their card, closing old accounts too soon, and not paying attention to their credit reports
How can I protect myself from fraud?
Be careful about sharing personal information online and shred credit card documents
What is a 1099-C form?
When you have $600+ in debt cancelled, it becomes taxable income that must be reported
What is the FICO score range for getting the best deal on an auto loan?
680-700