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Basics of Credit - CREDIT/DEBT MANAGEMENT

Credit is given by assigning points to your income, how long you've been in your current job, what your work is, whether you own or rent your home, how much credit you have, and more. It can be divided into the three C's:

1. Character - Creditors believe that people with character will pay their bills even during difficult times.

2. Capacity - Your ability to get credit is based in part on your ability to repay your debts.

3. Collateral - These assets reflect how you'll repay debts if your capacity fails. Unlike a mortgage or car loan, credit card debt is unsecured. Your signature is your promise to repay the debt.

Different lenders will score you differently. Therefore, it is smart to apply again if you've been turned down. But don't apply too many places at once. When you apply for credit, this is recorded on your credit report as an "inquiry." Your report lists all the inquiries made by creditors, and too many at once will hurt your credit score. Creditors may think that you could have too may open accounts and become overextended.

Credit Score
Your Credit Score is a number between 300-900. Credit scores above 600 generally give you access to more credit.

Your Credit Report
Lenders will review your credit report when you apply for a mortgage. The report supplies a history of how well you have managed your finances and repaid debt. It provides a detailed account of each time you have borrowed money and how promptly and consistently you have repaid the debts.

When you apply for our program, ACORN Housing collects a merged credit report from the three credit bureaus: Equifax, Experian, and Trans Union. These companies sell credit reports to lenders so they can review mortgage and credit applications.

Credit reports include a list of debts and a payment history for each one. It also includes bills that were referred to collection agencies, including utility and medical bills. It also reveals bankruptcies and tax liens which are part of the public record, even if these occurred several years ago. The credit bureaus also record each time you apply for credit and your credit is checked. Excessive credit checks may lower your overall score.

After seven years, most information is deleted from your credit report. A bankruptcy is deleted after ten years.

At your counseling appointment with an AHC Counselor, you will review your report and make sure that the information recorded by each bureau is correct. If there are errors, we will help you to correct the mistakes. Credit Bureau: These companies gather consumer credit information and sell it to lenders. The three credit bureaus are:

Equifax
PO Box 740241
Atlanta GA 30374
Phone: (800) 685-1111
www.equifax.com

Experian
National Consumer Assistance
PO Box 2002
Allen, TX 75013
Phone: (888) EXPERIAN
www.experian.com

Trans Union LLC
Consumer Disclosure Center
PO Box 1000
Chester, PA 19022
Phone: (800) 888-4213
www.transunion.com

Our Loan Counseling staff is here to help you to correct your Credit Report and assist you with Debt Management.

Correct Your Credit Report -