June 5, 2007

Credit Reports and Scores

Joe Beagle of CBC Co. in Toledo Ohio presented the club with  information regarding personal credit reports and scores.  CBC is a provider of credit information to various lending agencies.  Joe resides in Bowling Green Ohio with his wife and three children.

There are three principal sources for credit reporting and scores that are used by various agencies and institutions to assess credit history of prospective customers.  They are: Experion, Equifax and TransUnion.  Each uses a unique model utilizing similar information for determining a person's credit score but they are typically within a few points of one another in a range from 30 to 850.  About 80% of credit information is processed by Fair Isaac systems.

Credit scores are influenced in various ways as follows: 35% is based on payment history, 30% is based on current debt, 15% is based on length of credit history, 10% is based on new credit and 10% on types of credit already established.  These scores are fluid and may virtually change 'by the minute' since new information is available on a daily basis.  He encouraged everyone to access a free credit report from each agency at least once per year.  By staggering requests on a 4 month cycle, a person can keep up to date on their personal credit history and reporting and be appraised of any problems or attempts at credit fraud using their personal information.

Joe shared that there has been a dramatic increase in identity fraud cases over the past 5 yearw.  Whereas 5 years ago the rate was about 0.06%, today it is around 16%.

For more information about understanding credit scores, follow this link.

Hosting Rotarian: John Wierwille