Managing Your Credit and Credit Reporting Program Recap

Thank you to the Credit Union of New Jersey and Pete Manferdo from Experian for presenting Managing Your Credit and Credit Reporting.  Credit plays an important role in our finances, from car loans, to mortgages, to credit cards.  As such, it is important to understand exactly how credit and credit reporting works and what you can do keep on top of your credit.  The following topics were covered:

Credit Report

  • What is on a report?
    • Identifying information such as name, address, and social security number
    • Account information, such as credit cards, car loans, mortgages, etc.
    • Bankruptcy Public Records
    • Credit Inquiries
    • Dispute instructions
      • You can dispute anything on your credit report
      • usually takes 30-45 to process the dispute, including investigation
  • Used by lenders to gauge the likelihood of paying back a loan
  • FICO score is used by lenders to predict your risk of defaulting on loan within 24 months (higher the score, the less risk there is)
  • Credit Reports do not include your Credit Score

Credit Report Retention

  • How long information stays on your Credit Report
    • Accounts open that are in good standing – indefinitely
    • Accounts closed that are in good standing – 10 years
    • Late or missed payments – 7 years
    • Collection accounts – 7 years
    • Chapter 7 bankruptcy – 10 years
    • Chapter 13 bankruptcy – 7 years
    • Credit inquiries (hard hits) – 2 years

Common Myths about Credit

  • Once bad debt is paid off, it goes away – all debt will remain on your credit report according the to the retention information above
  • The credit reporting company denied me credit – the reporting company only houses your information; the lending company makes the decision on the loan
  • I am not responsible for charges on my account – if someone else is linked to your account or you have a joint account, you are responsible for all debt associated with your accounts
  • Divorce decree separates joint accounts – marital debt is considered joint debt even after a divorce decree
  • I must give permission for a report to be issued – Lenders can request information on your credit history (soft inquiries) for purposes such as pre-qualified offers for credit cards or loans.
  • Requesting your own credit report and pre-approval offers harm history – You can obtain your own credit report once a year for free without any impact on your credit score
  • There is one score based on your report – different companies have different calculations for evaluating your credit so scores will be different based on different criteria

Breakdown of the Vantage Score (Similar to FICO Score)

  • Payment History – 40%
  • Depth of Credit – 21% (how long you have had credit)
  • Utilization – 20% (how much you owe vs. your available credit limit)
  • Account Balances – 11%
  • Recent Credit – 5%
  • Available Credit – 3%

For more information on credit reports and credit scores, contact your financial institution or visit the Federal Government’s Credit Reports and Scores page at https://www.usa.gov/credit-reports.

About Andrew Dauphinee

Education and learning are passions of mine. Lifelong learning is a core part of who I am and I strive to pass that desire for information on to everyone I meet. As the Instruction and Outreach Librarian, it is my goal to provide quality, informative, and relevant programming to meet the diverse needs of our patrons. Please contact me regarding programming at adauphinee@njstatelib.org.