Understanding the Importance of Credit in Today’s EconomyPresented by ComPsych® Corporation

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Objectives

Understand what credit is and the various factors that affect your credit score

Learn what steps to take to improve your credit score

Recognize the costs associated with poor credit

Learn what information is included on a credit report and how to read your credit report

Steps To Help Prevent Identity Theft

Copyright © 2013 ComPsych Corporation. All rights reserved. This document is the confidential and proprietary information of ComPsych Corporation. 3

Credit is King, or Queen, in Today’s Economy

In today’s economy the importance of good credit is vital

People with good credit have many more options than people who don’t

It affects your rates and the total cost you pay for loans

Copyright © 2013 ComPsych Corporation. All rights reserved. This document is the confidential and proprietary information of ComPsych Corporation. 4

What is Credit?

Credit is your reputation as a borrower

Credit encompasses any form of deferred payment

Credit is specific to you

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What is Credit Scoring?

A system which estimates an individual's creditworthiness and ability to repay financial obligations

Score is based upon information that each credit bureau keeps on you

FICO scores range from 300 – 850

Good credit now considered a score above 730

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Factors That Affect Your Credit Score

Payment History = 35%

Amounts Owed = 30%

Length of Credit History = 15%

New Credit = 10%

Type of Credit = 10%

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Factors That Don’t Affect Your Credit Score

Race, color, religion, national origin, sex or marital status

Age

Occupation, salary, title, employment history or dates employed

Where you live

Promotional inquiries, account review inquiries, insurance inquiries, employment inquiries

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How To Establish Credit / Improve Your Credit Score

If You Are Establishing Credit – Open a bank account Apply for credit through bank or get a secured credit card Get a gasoline or store card

If You Are Trying to Improve Your Score – Check your credit report and resolve any outstanding negative entries on your

credit report Make sure you pay your bills on time Pay down outstanding debts

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The Importance of Regularly Requesting Your Credit Report

To help guard against identity theft

Identify and correct credit report errors

Minimize chances that credit can negatively affect chance of obtaining financing

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Understanding the Information on Your Credit Report

The Sections of a Credit Report – Personal / Identifying Information

Credit History

Public Records

Inquiries

Copyright © 2013 ComPsych Corporation. All rights reserved. This document is the confidential and proprietary information of ComPsych Corporation. 11

Disputing Information on Your Credit Report

Contact the credit bureau regarding the incorrect information

Write a letter to the credit bureau explaining why you are disputing the information

Also notify the creditor, in writing, that you are disputing information

Credit reporting company must investigate – usually within 30 days

Information proven incorrect must be removed by credit bureau

Include a Statement of Dispute in credit report if dispute is unresolved

Copyright © 2013 ComPsych Corporation. All rights reserved. This document is the confidential and proprietary information of ComPsych Corporation. 12

Steps To Help Prevent Identity Theft

Check your credit report at least once a year

Shred personal information

Be careful with who you share your Social Security number

Install proper security on your computer

Create secure passwords

Limit whose “eyes” can see your credit or debit card number

When to Seek Additional Help

ComPsych counselors are qualified to help you understand the importance of credit in today’s economy.

There are additional resources for credit management onwww.guidanceresources.com

Check it out!

Call ComPsych® GuidanceResources®

Available 24 hours a day, 7 days a week!