Reporting Agencies and Credit Reports

Note: This material is being provided for general information purposes. This overview is intended to alert the reader to the importance of managing his/her credit. General guidelines, material, and other information are being provided as a courtesy. No representations or warranties are made as to the accuracy or processes covered herein. The Credit Tier Examples listed below are for informational purposes only, as lender guidelines vary.

Credit Scores are extremely important to a lender in evaluating the merits of a loan. Your credit or FICO scores have a direct impact on the rate, term and loan program for which you qualify.

Credit Score Guide:

A+ Borrower 750+

A Borrower 680+

A- Borrower 640+

B Borrower 600+

Time should be devoted to researching your own credit file/s before you apply for a loan. Consumers are entitled to one free credit report each year by going to www.annualcreditreport.com. Once a reference number is obtained from the repository, a dispute can be opened online. Be sure to print out your report/s while you are online!

Note: FICO scores provided to consumer credit requests are very often higher than the scores given a lender, so any scoring should only be viewed for general informational purposes only.

Disputing Your Credit Report If inaccurate information still appears on your credit report, you have the right under the Fair Credit Reporting Act (FCRA) to dispute the information by:

• Correctly identifying the inaccurate information on your credit report. Look closely at your personal data, account information, and payment Review the report/s to see when your negative records are scheduled to be removed. Be sure to note any item/s you feel are inaccurate.
• When you find an inaccuracy on your credit report, you should first investigate the details and find out what exactly is wrong. To begin the dispute process, you should contact the creditor or lender responsible for reporting the mistake directly. Your financial institutions will be able to correct most minor inaccuracies over the phone. Not sure of the contact information? You can find it at the bottom of your credit report/s under “Contact Information.”

Credit Tips:

Derogatory information reported to the credit bureaus significantly impacts on your overall FICO Scores. Rating agencies also factor high credit limit to loan balance in their scoring algorithms. It is therefore important to maintain a ratio of 50% or less if at all possible. A low loan to credit limit to balance is believed to improve scores more than actually paying off credit accounts.

It is also worth noting that excessive lender inquiries may have a negative impact on the FICO scoring process, so it is important to keep annual inquiries to a bare minimum.