Credit Report Project

WHAT DOES MY CREDIT REPORT SAY ABOUT ME?

Checking and understanding your credit report is a vital part of your personal financial strategy. In this
assignment, you will:
 Identify the three credit reporting agencies
 Request a copy of your free Experian credit report at www.annualcreditreport.com
 Evaluate your credit report and identify any questions or concerns

A credit report is a record of your credit history that includes information about your identity, existing
credit, public records, and credit inquiries. Credit bureaus get information from your creditors, such as
banks, credit card issuers, or auto finance companies. They also get information about you from public
records, such as property or court records. Each credit bureau gets its information from different
sources, so the information in one report many not be the same as the information in another.
Your credit report is important because lenders, insurers, employers, and others may obtain your credit
report from credit bureaus to assess how you manage financial responsibilities. There are three major
credit-reporting bureaus: Equifax, Experian, and TransUnion.

REQUESTING YOUR CREDIT REPORT

Go online to www.annualcreditreport.com and request a copy of your Experian credit report. To ensure
that you go to the legitimate site, type this URL directly into the address bar in your browser window.
Do not search and click on any links in search results.

NOTES
 While the annualcreditreport.com website is secure, you should avoid accessing it on a public
computer or over an unsecured wireless (wifi) Internet connection, because of the sensitive,
personally identifiable information (such as your social security number) that the site will ask you to
provide.
 Requesting your free annual credit report will NOT affect your credit rating.
 During the request process, you’ll be asked to answer a number of identity verification questions.
This can be a little tricky; so, it may help to have access to your financial records.
 To receive credit for the assignment, you’ll need to submit just the first page of the report on
Blackboard and black out any sensitive information like your social security number. The first page,
typically doesn’t include any sensitive personal identification or financial information.
 If you have never applied for credit, you may get a message that requires you to submit written
documentation before Experian will release your credit report. This is to protect from identity theft.
You will need to print the message and bring it to class with you. Submitting
a picture of
the error message on Blackboard will keep you from getting a zero for
the assignment. No picture no credit.
 Getting a copy of your credit report or of any messages due to lack of credit will give you 30
points for this assignment.
 Next answer the questions on the following pages.
1) Insert picture of credit report (or sample) with any sensitive information blocked.

2) What kind of information do you find in each of the following sections of your credit report? Do not
report specific details. Describe the general type of information. If you could not get a copy of
your credit report due to lack of credit history. Use the Credit Report Sample on blackboard to
answer the questions.
 Potentially Negative Items

 Public Records

 Credit Items

 Requests Viewed by Others

 Requests Viewed Only by You

 Personal Information

3) Ryan has two credit cards which are listed below.

Macys Chase Visa

$500 $3,000
15% 19%

a. First determine which one Ryan should pay off first and explain why.
Ryan should first pay off Chase Visa’s debt first-highest debt with the highest interest rate.
This is because the debt costs Ryan the most every month. If he can pay off the debt, he will
save on interest in the long-term and he will free up some extra money to channel it to other
financial obligations, such as paying off Macys’ debt. Nonetheless, comparing the two debts, it
is the highest, with the highest interest rate. Therefore, he will end up spending more than 12
months to clear it. Ryan may feel like he is not making any significant progress towards
becoming debt free. It can thus be challenging to concentrate and stick to the repayment plan
since he will be feeling that he is not getting any close to his goal.

b. Next look up a credit card payoff calculator (like

https://www.creditkarma.com/calculators/debtrepayment) and calculate how much the
monthly payment would be to payoff the cards in one year.
Macys- $45
Chase Visa- $276

c. How much will you pay in interest for each card?

Macys- $42
Chase Visa- $318
4) Read the statistics about personal credit card debt at http://www.creditcards.com/credit-card-

news/credit-card-industry-facts-personal-debt-statistics-1276.php#debt.
a. What is the average balance on credit cards in New York?

According to Experian, the average balance on credit cards in New York is $6,506 as at
2018.

b. What started happening to credit card delinquency rates in 2017?

In 2017, the credit card delinquencies started to increase after dropping for several
years. The delinquencies increased during the start of the Great Recession that began at

the end of 2017, then started to taper off.

5) After watching the video “How to Improve Your Credit Score” in your learning module,
explain why it is important to have a good credit score.

A credit score is an essential part of an individual’s financial health. A good credit score
unlocks many benefits and savings, including access to credit and loans with terms that are

favorable. For instance, a good credit score guarantees access to the best credit cards such
as those which offer low interest rates and rewards like travel points, cash back offers,

among others. Good credit scores allow one to qualify for low insurance premiums when
insuring a car. Some rental companies and landlords take into account the credit score of a

tenant to determine their financial trustworthiness. A high credit score increases the
likelihood of being approved for an apartment or home rental. Further, good credit score

excludes one from paying security deposit prior to the initiation of utility services. Finally, a
good credit score allows one to save on interest rates when making big purchases like

taking a mortgage or buying a car.

6) After watching the video on “How to Pay Down Credit Card Debt” in your learning module,
answer the following question. Some debt consolidation firms will negotiate with creditors

to lower the amounts you owe. Paying less back sounds like a good idea but is it?
7) Read the Nerdwallet article “What Happens to Your Debts After You Die and answer the questions
below.
a. What things are protected from creditors?
Creditors cannot go after assets such as retirement benefit accounts, life insurance benefits or
living trust to settle debts. Such assets go to the designated beneficiaries and as such, they are
not part of the probate process which settles the individual’s estate.

b. What happens to each of the items below?

 Mortgage
If the mortgage is passed on to an heir as an inheritance, the home can be subjected to debt if it
is directly passed to them. In such a scenario, the inheritor can sell the property and repay the
debt or assume ownership and make the payments. Alternative, the executor of the deceased’s
estate can sell off the assets of the deceased and pay off the mortgage thus relieving the heirs
the debt. Notably, if the property has been passed to a new owner, the lenders can ascertain the
ability of the new owner to pay the debt in some case, demand the immediate repayment.

 Student loans
In case of a private student loan, the lender loses the money lent in case the estate is insufficient
to settle the amount since the loan is unsecured. However, for co-signers of private student
loans may been responsible for the balance. This is only the case for loans that were taken out
before November 2018. The spouse in community property states is responsible for the loan if it
was taken out in the course of their marriage. Some lenders like Wells Fargo and Sallie Mae
forgive such debts when the loanee dies.

 Car loans
Car loans are often paid from the deceased’s estate. Since the car loan has been secured by the
car itself, if payments are made, the car can be repossessed by the lender. In case the borrower’s
estate is unable to pay off the loan and the heir is interested in keeping the car, the potential
inheritor can proceed with making the stipulated payments.

 Credit Cards
When a credit card debt is not settled, the credit company stands to lose since the debt is unsecured.
Nonetheless, joint account holders are responsible for settling the claims since they are also responsible
for the loan. Further, spouses who live in community property states may be deemed responsible since
the debts are shared.

c. When are others responsible for the debts?

There are various scenarios when one can be responsible for another’s debt. For example, one
can be responsible for another’s debts when they acted as a guarantor. When one does not
qualify for a credit card on their own. This means that the guarantor has agreed to assume all the
risks that come when the person defaults to pay. The second scenario is when the parties have
opened a joint account and hold a credit account. In a joint account, both parties are equally
responsible for the default of the other members. If one partner fails to settle a card debt, the
others should pay it off.