Credit Topics

INDEX Topics: Page(s) Credit Repair-Setting Expectations 1 How Often Does Your Credit Report Change? 2 The Difference Between Hard and Soft Credit Inquiries 3, 4 Why would credit scores differ between credit agencies? 5, 6 The FICO Score of Zero 7 Debt to Income Ratio 8 FDCPA Violations / Creditor Harassment 9, 10, 11, 12 Working with affiliates 13 Credit Glossary 14 to 26

Credit Repair - Setting Expectations When people approach a credit repair agency, they expect all their financial problems to disappear, and to then meet their financial goals. There are no guarantees when it comes to repairing credit and increasing credit score. Ultimately, it is up to the credit bureaus and your creditors to decide whether or not the negative listings will be removed from your credit reports. You don’t want to deal with a client who doesn’t understand how you are setting their expectations and their true expectation. You need to set up the client at the beginning and say “this is what you should expect. No, we can’t guarantee anything, and if you truly need your credit repair in three days, then I am probably not the right guy for you. If the client’s goal is to buy a house and do it as fast as he can, you may be looking at the report differently than if their goal is to have a perfect credit report. You must give the client what he wants by advising them and educating them along the way. You don’t want a client who can’t afford the program. You don’t want just force-feed people into the program, because they have whatever they set up. You don’t want to just take their money and move on; you want to sure that you add more value. Easy Solutions should put forth a good effort in working to repair clients’ credit, but sometimes there is only so much that can be done. Even though our professional credit repair program offers multiple benefits, it is important to have realistic expectations about what we can and cannot do. In general, it is important to realize that we cannot offer credit report help that is outside the law. That is, we cannot get accurate, timely, and verifiable information removed from clients’ credit report. If the information is accurate and it is not past the federal reporting limit, and if the creditor has records that can prove the accuracy of the information, then the item is going to remain in the clients’ credit file until the time limit on reporting it runs out. Our Professional credit repair process can, however, ensure that clients get an appropriate response from creditors, collection agencies and the credit bureaus. Our Formal dispute letters can go a long way to getting results. Getting inaccurate information removed from credit reports will likely be easier when help comes from Easy Solutions credit repair agency. For most people credit repair is not a priority unless if they want to buy a house, or refinance their mortgage or buy a car or apply for a job where they check credit history. Setting unrealistic goals will only make clients disappointed. This could be avoided if Easy Solutions and clients were aligned in their goals, expectations and Commitments. Set realistic expectations regarding the whole process and educate clients that it will take months before they will stand at a good credit rating. Some people can be helped in 30-45 days, but others have to wait and work on all aspects of their credit for 6-12 months, or more. Educate clients on giving us updated POR’s on time, and forwarding the letters which were sent from the bureaus or creditors. Easy Solutions University (Article 1.4) Source: http://aaacreditguide.net/

How Often Does Your Credit Report Change? “How long will it take my credit report to be updated after I pay off a credit card/settle a collection account/get the IRS to remove a tax lien etc.?” Like so many things in life, your credit report can change in the blink of an eye. “Let’s say a lender requested your credit report right now. If you apply for credit (again) in an hour your credit report could be different,” because of the inquiry that would have been generated when the first lender accessed your credit information. So, “Credit Reports can change as often as every day if there is new information provided to the credit bureaus.” Your credit report represents a snapshot of your credit history at any given point in time. That means that the information in the credit reporting agencies’ (CRAs) databases at the time a credit report is requested is the information that will be reported. But it’s not like checking your online bank account and seeing the debit card purchase you made a few minutes ago in your running balance. “It’s not real time.” While lenders often supply information to the CRAs on a daily basis, that doesn’t mean your account information is updated that frequently. Lenders may have millions of customers and they don’t update all of their information at the same time, many lenders report account information around the close of the customer’s billing cycle. But it’s not just information that is added to credit reports that cause them to change. Information also is removed or suppressed in the CRAs’ databases. For example, under federal or state law, Chapter 13 bankruptcy will automatically be removed seven years from the filing date. And just as credit reports can change at any time, so can credit scores. There’s a common perception that a credit score is calculated, stored on a shelf somewhere, and changed periodically. Instead, it is calculated when it is requested, based on the information from a CRA that is available at that time. To stay on top of your credit information so you can challenge mistakes if necessary, we recommend: Check your credit reports, at least once a year. Give yourself time, check your reports 3-6 months before applying for a major loan like a mortgage or auto loan. Be patient. It may take 30-45 days or so for updated information to appear on credit reports requested by you or a lender, due to the reporting process. If you’ve recently paid off a credit card with a high balance, for example, it may take a little time to see the lower balance reported. Easy Solutions University (Article 1.1) source 1: https://www.mint.com/blog/ source 2: http://www.savvyoncredit.com/ source 3: http://www.experian.com/

The Difference Between Hard and Soft Credit Inquiries Do you know which credit report inquiries lower your credit score? Like most things in life, credit scores can be frustrating if you don’t understand how they work. Did you know there could be errors on your credit report that are damaging your score? Or that not using your credit cards could backfire against you? And did you know that when some retailers and financial institutions access your credit report, the credit inquiries that occur could hurt your score … while other inquiries won’t? Not knowing these facts could seriously damage your credit worthiness in the eyes of potential lenders, so it’s important to stay on top of your credit education. But let’s go back to the topic of credit inquiries. What exactly are they? Why are there different types, and most importantly, which kind could affect your credit? These are just some of the questions we’ll cover: What is a hard inquiry? A hard inquiry is an inquiry that occurs when a prospective lender checks your credit report to make a lending decision. Hard inquiries can slightly lower your credit score and will typically stay on your report for two years. What is a soft inquiry? A soft inquiry is an inquiry that occurs when a person or company checks your credit report as a background check, like when you check your credit score or a mortgage lender preapproves you for a loan. Soft inquiries can occur without your permission, but don’t worry – they won’t affect your credit in any way. When do hard and soft inquiries occur? “Hard inquiries” commonly take place when consumers apply for a credit card, auto loan, mortgage or other loan. On the other hand, “soft inquiries” typically occur when employers access your report to look for signs of risk or you check your own credit report or score from sites like Credit Karma, Credit Sesame, MyFICO, credit reporting agency, or for another company that provides this information. Lenders may also use soft inquiries to preapprove you for a credit card or loan. Since they’re not making a lending decision or guaranteeing approval – they're only saying you’re likely be approved for that credit card or loan – these inquiries are typically considered “promotional” and won’t affect your score. Unfortunately, there are some gray areas where either a hard or soft inquiry could occur, including when a bank needs to verify your identity or you apply to rent an apartment or a car. If you’re worried about the growing number of hard inquiries on your report, ask the financial institution or company

what kind of inquiry it will make before deciding whether you’d like to proceed or not. This way, you can avoid potentially unpleasant credit surprises. Do inquiries affect my credit score? While soft inquiries won’t lower your score, hard inquiries could slightly lower your score. The good news: Hard inquiries typically don't affect your credit score by much – factors such as your payment history and credit utilization rate are usually weighted more heavily. However, the impact of an inquiry can vary according to your credit history. If you have few accounts, a short credit history or a ton of inquiries, an additional hard inquiry could have a greater impact on your score. Keep in mind, when creditors see a lot of hard inquiries on a report, they become more wary about extending credit because numerous hard inquiries look like a consumer is desperate for credit or was previously unable to get the credit he or she needed from other creditors. In other words, a lot of inquiries may make you appear like a higher-risk borrower, so it’s best to minimize them. Can I avoid hard inquiries? “ If you want to apply for a new credit card or loan, there’s no avoiding the subsequent hard inquiry.” However, there is good news for those looking to shop around. If you're looking for a mortgage, student loan, or an auto loan, you may want to check with several lenders to find the best rate. This can cause multiple lenders to request your credit report even though you're only looking one loan. To compensate for this, “FICO' Scores distinguish between a search for a single loan and a search for many new credit lines, in part by the length of time over which inquiries occur. When you need an auto, student, or home loan, you can avoid lowering your FICO' Score by doing your rate shopping within a short period of time, such as 14 days. Credit bureaus usually pick up on the fact that you’re comparison shopping by noticing the types of credit lines you’re applying for and the size of your requested loan. In general, it’s best to check your credit score and only apply for credit cards and loans for which you’re most likely to qualify. So, while you can’t avoid credit inquiries, you can minimize the number of them. If there are hard inquiries on our clients’ credit report that they didn’t authorize, Easy Solutions may request Credit Bureaus to remove it on their behalf. Easy Solutions University (Article 1.7) source 1: http://www.usnews.com/ source 2: http://www.myfico.com/

Why would credit scores differ between credit agencies? The History of Credit Scores Prior to the creation of standardized credit scores, lenders and loan officers would often develop their own 'score card' to assess the risk of lending to a particular borrower. This score card could vary drastically from one lender to the next. The major issue with this original method was that it was based on a loan officer's ability to judge risk, rather than a common set of rules and specific calculations. So, in the 1980's, the Fair Isaac Corporation set up the first general purpose credit scoring system based on credit bureau information in order to help remove the inherent inconsistencies that arose from having each lender perform their own credit diagnostics. It has since become known as the FICO score and the algorithm has been widely adopted by America's largest credit reporting agencies. The three major credit bureaus, Equifax, Experian and TransUnion, compete to capture, update and store credit histories on most U.S. consumers. While most of the information collected on consumers by the three credit bureaus is similar, there are differences. For example, one credit bureau may have unique information captured on a consumer that is not being captured by the other two, or the same data element may be stored or displayed differently by the credit bureaus. Credit bureaus use many different scoring models, even within the same credit bureau. Each bureau can use dozens of different credit score models based on the requirements of different lenders. As an example, a mortgage company will get a different score than a company providing auto loans, since they are looking for different types of credit history and credit factors. Each credit score model has a slightly different formula that takes into account some of the over 200 different factors of your credit report; like a thumbprint, no credit score model is exactly the same. In addition, credit scores can change anytime so you have to make sure you are comparing credit scores from the same day. Equifax might have not exactly the same information on you as Experian and vice versa. One credit bureau may be missing an account that either helps or hinders your score and will therefore report a different credit score than another credit bureau. If the system was perfect, this wouldn't happen. Other credit scores While FICO® Scores are used by 90% of top lenders, there are other credit scores made available to consumers. Other credit scores may evaluate your credit report differently than FICO® Scores. When purchasing a credit score for yourself, most experts recommend getting a FICO® Score, as FICO® Scores are used in 90% of lending decisions. While FICO is the most famous, there are several other versions and providers of credit scores, such as VantageScore, NextGen, BEACON and EMPIRICA. Some scores are directly developed by credit bureaus, while others are developed by outside companies.

The kind of free scores provided by online services like “Credit Karma” (who offers the TransRisk New Account Score, VantageScore, and Auto Insurance Score, supplied by TransUnion), “Credit Sesame “ (Experian Score) and “Quizzle” (Uses V3 of VantageScore, based on data provided by Equifax) are just educational and often referred to as 'FAKO' scores. Others like Capital One’s Free Credit Tracker Tool (in the past, was powered by Credit Karma) for all Capital One consumer credit cards, does not provide a FICO score. Instead, it uses a credit score developed through a proprietary model by TransUnion. Although the TransUnion credit score (called the TransUnion Educational Score) may not be the standard credit-gauging metric used by lenders, credit card customers can still use it to monitor the changes to their credit profiles. Easy Solutions University (Article 1.2) Source1: http://www.myfico.com/SEO_Home.aspx Source 2: http://www.mybanktracker.com/ ES Credit Report Analysis & Results Our professional credit report analysis & results is based in Credit reports from the main three Credit Bureaus, Experian, Equifax and Transunion, based on Corelogic Credco (Identity IQ) and Creditxpert (Wells Fargo). The credit report scores presented by Easy Solutions are for educational purposes only.

The FICO Score of Zero Normally, credit scores run from 300 to 850, but there is an exception to the rule: a score of zero. It’s not as frightening as it sounds. A “zero” doesn’t mean you’re a reckless spender, it simply means that creditors don’t know what to do with you. It is possible that you can have a credit score of zero, which means that there is not enough information (less than 6 months) in your credit file to generate a credit score. Some people wrongly assume that no credit history is a good thing because there can be no negative marks on your credit report. However, if you have little or no credit history, getting financing approval can be difficult. Because your FICO credit score is based primarily on how you have used credit in the past, having no credit history leaves you with no credit score. Without a credit score, lenders do not have an easy formula to determine if you are a credit risk. Many lenders do not want to take a chance on an unproven applicant. To have a score at all, you need to play by the rules, which include carrying and paying off debt. To have a good score, you need to have debt. Yes, it sounds counterintuitive, but, to creditors, you haven’t proven your borrowing abilities if you’ve paid off loans as quickly as possible and then ceased any further interaction with debt. To them, you’re guilty until proven innocent, and therefore they assign you a score of zero. That score is no matter if you expect that you’ll never rent an apartment—instead you’ll buy one outright—or take out an auto loan—rather, you’ll pay in full and up front. Chances are, though, you’re not that lucky. But don’t fret. There’s plenty you can do. If you know or expect that you’ll need to take out a loan in the near future, you should open a credit account immediately. The best credit cards, with top-notch rewards and benefits, however, won’t yet be within your reach. Many of those rewards cards require excellent credit, so don’t bother filling out the application for an American Express Platinum. You can get your hands on a “secured credit card”. While they’re marketed to bad-credit consumers, they can accommodate you, too, as they don’t require a credit history to apply. Easy Solutions University (Article 1.0) source: http://www.nerdwallet.com

Debt to Income Ratio What is a debt-to-income ratio? A debt-to-income ratio is one way lenders measure your ability to manage the payments you make every month to repay the money you have borrowed. Your debt-to-income ratio actually has nothing to do with credit scores. Income information is not part of your credit report. Instead, you provide it as part of your credit application. The debt-to-income ratio is calculated by your lender when you apply for credit and gives them a sense of your capacity to repay additional new debt. To calculate your debt-to-income ratio, you add up all your monthly debt payments and divide them by your gross monthly income. Your gross monthly income is generally the amount of money you have earned before your taxes and other deductions are taken out. For example, if you pay $1500 a month for your mortgage and another $100 a month for an auto loan and $400 a month for the rest of your debts, your monthly debt payments are $2000. ($1500 + $100 + $400 = $2,000.) If your gross monthly income is $6000, then your debt-to-income ratio is 33 percent. ($2000 is 33% of $6000.) Why is the 43% debt-to-income ratio important? Evidence from studies of mortgage loans suggests that borrowers with a higher debt-to-income ratio are more likely to run into trouble making monthly payments. The 43 percent debt-to-income ratio is important because, in most cases, that is the highest ratio a borrower can have and still get a Qualified Mortgage. There are some exceptions. For instance, a small creditor must consider your debt-to-income ratio, but is allowed to offer a Qualified Mortgage with a debt-to-income ratio higher than 43 percent. In most cases your lender is a small creditor if it had under $2 billion in assets in the last year and it made no more than 500 mortgages in the previous year. Larger lenders may still make a mortgage loan if your debt-to-income ratio is more than 43 percent, even if this prevents it from being a Qualified Mortgage. But they will have to make a reasonable, good-faith effort, following the CFPB’s rules, to determine that you have the ability to repay the loan. Your debt-to-income ratio can be a valuable number -- some say as important as your credit score. It's exactly what it sounds: the amount of debt you have as compared to your overall income. Lenders look at this ratio when they are trying to decide whether to lend you money or extend credit. A low DTI ratio shows you have a good balance between debt and income. As you might guess, lenders like this number to be low -- generally you'll want to keep it below 36 percent, but the lower it is, the greater the chance you will be able to get the loans or credit you seek. Keeping your debt-to-income ratio low will help ensure that you can afford your debt repayments and give you the peace of mind that comes from properly handling your financial responsibilities. It can also help you be more likely to qualify for credit for the things you really want in the future. Easy Solutions University (Article 1.5) source: www.consumerfinance.gov/

FDCPA Violations / Creditor Harassment If you’re behind in paying your bills, or a creditor’s records mistakenly make it appear that you are, a debt collector may be contacting you. Under the FDCPA, a debt collector is someone who regularly collects debts owed to others. This includes collection agencies, lawyers who collect debts on a regular basis, and companies that buy delinquent debts and then try to collect them. The Federal Trade Commission (FTC), the nation’s consumer protection agency, enforces the Fair Debt Collection Practices Act (FDCPA), which prohibits debt collectors from using abusive, unfair, or deceptive practices to collect from you. The Act covers personal, family, and household debts, including money you owe on a personal credit card account, an auto loan, a medical bill, and your mortgage. The FDCPA doesn’t cover debts you incurred to run a business. A debt collector may not contact you at inconvenient times or places, such as before 8 in the morning or after 9 at night, unless you agree to it. And collectors may not contact you at work if they’re told (orally or in writing) that you’re not allowed to get calls there. If a collector contacts you about a debt, you may want to talk to them at least once to see if you can resolve the matter. If you decide after contacting the debt collector that you don’t want the collector to contact you again, tell the collector – in writing – to stop contacting you. Once the collector receives your letter, a collector can contact you to tell you there will be no further contact or to let you know that they or the creditor intend to take a specific action if you owe money, like filing a lawsuit to collect the debt. If an attorney is representing you about the debt, the debt collector must contact the attorney, rather than you. If you don’t have an attorney, a collector may contact other people – but only to find out your address, your home phone number, and where you work; is not permitted to discuss your debt with anyone other than you, your spouse, or your attorney. Practices that are off limits for debt collectors: Harassment. Debt collectors may not harass, oppress, or abuse you or any third parties they contact. For example, they may not: •use threats of violence or harm; •publish a list of names of people who refuse to pay their debts (but they can give this information to the credit reporting companies); •use obscene or profane language; or

•repeatedly use the phone to annoy someone. False statements. Debt collectors may not lie when they are trying to collect a debt. For example, they may not: •falsely claim that they are attorneys or government representatives; •falsely claim that you have committed a crime; •falsely represent that they operate or work for a credit reporting company; •misrepresent the amount you owe; •indicate that papers they send you are legal forms if they aren’t; or •indicate that papers they send to you aren’t legal forms if they are. Debt collectors also are prohibited from saying that: •you will be arrested if you don’t pay your debt; •they’ll seize, garnish, attach, or sell your property or wages unless they are permitted by law to take the action and intend to do so; or •legal action will be taken against you, if doing so would be illegal or if they don’t intend to take the action. Debt collectors may not: •give false credit information about you to anyone, including a credit reporting company; •send you anything that looks like an official document from a court or government agency if it isn’t; or •use a false company name. Unfair practices. Debt collectors may not engage in unfair practices when they try to collect a debt. For example, they may not: •try to collect any interest, fee, or other charge on top of the amount you owe unless the contract that created your debt – or your state law – allows the charge; •deposit a post-dated check early; •take or threaten to take your property unless it can be done legally; or •contact you by postcard.

If a collector sue you to collect and they win, the court will enter a judgment against you which states the amount of money you owe, and allows the creditor or collector to get a garnishment order against you, directing a third party, like your bank, to turn over funds from your account to pay the debt. Wage garnishment happens when your employer withholds part of your compensation to pay your debts. Your wages usually can be garnished only as the result of a court order. Don’t ignore a lawsuit summons. If you do, you lose the opportunity to fight a wage garnishment. Many federal benefits are exempt from garnishment, including: •Social Security Benefits •Supplemental Security Income (SSI) Benefits •Veterans’ Benefits •Civil Service and Federal Retirement and Disability Benefits •Military Annuities and Survivors’ Benefits •Federal Emergency Management Agency •Federal Disaster Assistance Federal benefits may be garnished under certain circumstances, including to pay delinquent taxes, alimony, child support, or student loans. If you sue a collector in a state or federal court and you win, the judge can require the collector to pay you for any damages you can prove you suffered, like lost wages and medical bills. The judge can require the debt collector to pay you up to $1,000, even if you can’t prove that you suffered actual damages, and to be reimbursed for your attorney’s fees and court costs. You have to take in consideration that even if a debt collector violates the FDCPA in trying to collect a debt, the debt does not go away if you owe it. If a debt collector files a lawsuit against you to collect a debt, respond to the lawsuit, either personally or through your lawyer, by the date specified in the court papers to preserve your rights. Easy Solutions University (Article 1.3) Source: http://www.consumer.ftc.gov/ Once we identity the need for FDCPA Violation Service, we refer our client to Consumer Rights Law Firm: Option 1: Provide our client with our Point of Contact information, Scott Bonarrigo (operations manager). Or you can email Scott as well without clients’ information.

Direct: 1-978-212-3301 Fax: 978-409-1846 Email: [email protected] Option 2: Or you can simply call and conference Scott (preferably). This way Scott can speak with client directly. This can be done during sign up or when providing results. What Happens Next?  Scott will email client a power of attorney, authorizing Consumer Rights Law Firm to represent them.  They will immediately send the collection agency a Cease and Desist letter, so the collection agency can stop contacting / harassing client.  Then Scott and his team start investigating. This typically takes 60 to 90 days. Scott will be updating us and our client accordingly.

Working with affiliates There are many ways to promote our services, but one of the most effective is working with affiliates. And like customers, an affiliate starts making decisions about our business if we create powerful first impression. So, what kind of impression we want to make? We have the ability to control the impression we leave, do we want to convey an image of good service, authority, professionalism, trust, confidence, or competence?; what message is most important for our business? Dressing properly demonstrates a level of respect and helps avoid detracting from the business at hand. A professional dress code creates a polished-looking environment; clothing consistency is one of the easiest ways to convey professionalism. Be mindful of your non-verbal communication cues; maintaining eye contact standing tall, pulling back your shoulders, and straightening your head are all visual signals of confidence and competence. Keep in mind that your tone of voice accounts for 70% of how you’re perceived. So it’s not just the words you use, but how you say them that matter; personalize your communication and express gratitude. Consider including a call/message/email that thanks affiliate for sending clients. If affiliates feel valued, they’re more likely to refer more clients again. Your affiliate-prospect is making numerous computations in the first few seconds of encountering your business. Do you have status and authority? Are you trustworthy, competent, and confident? Will you waste their time? By putting effort into creating a lasting and positive first impression, we can influence the evaluations people make about us and our business. “How To Successfully Approach Affiliates” • We're not soliciting them about our services, we're learning about their services and products. And how we're always seeking the best options for our clients. • We're not asking them to send us clients; we're informing them that we would like to refer our clients to them. • We educate them that we have a large cliental base that is seeking financial guidance, products to meet their financial goals...and as an Easy Solutions Personal Advisor, we have an obligation to assist them with the whole process including referring them to the right people. Easy Solutions Credit Repair Affiliate Program lets our affiliates to build a relationship while we help rebuild their prospects credit. Our Affiliates don't have to turn their prospects away due to credit; they could help them to use our services to rebuild their credit scores! It's a simple process for Affiliates and their Clients, and IT WORKS! Easy Solutions University (Article 1.6) source: https://wellsfargoworks.com/

Credit Glossary -A- Account Condition Indicates the present state of the account, but does not indicate the payment history of the account that led to the current state. (i.e. open, paid , charge off, repossession, settled, foreclosed, etc) . Account Number The unique number assigned by a creditor to identify your account with them. Experian removes several digits of each account number on the credit report as a fraud prevention measure. Accounts in Good Standing Credit items that have a positive status and should reflect favorably on your creditworthiness. Adjustment Percentage of the debt that is to be repaid to the credit grantors in a Chapter 13 bankruptcy. AKA Also Known As Annual Fee Credit card issuers often (but not always) require you to pay a special charge once a year for the use of their service, usually between $15 and $55. Annual Percentage Rate (APR) A measure of how much interest credit will cost you, expressed as an annual percentage. Authorized User Person permitted by a credit cardholder to charge goods and services on the cardholder's account but who is not responsible for repayment of the debt. The account displays on the credit reports of the cardholder as well as the authorized user. If you wish to have your name permanently removed as an authorized user on an account, you will need to notify the credit grantor. -B - Balloon Payments A loan with a balloon payment requires that a single, lump-sum payment be made at the end of the loan. Bankruptcy Bankruptcy is a federal law that allows individuals, married couples, and businesses to eliminate or restructure their debts when they have financial difficulties. There are many different forms and types. The most common are Chapter 7, Chapter 11 and Chapter 13. A bankruptcy settlement will generally show up on credit reports for a period of 7 to 10 years.

Bankruptcy Code Federal laws governing the conditions and procedures under which persons claiming inability to repay their debts can seek relief. -C- Capacity Factor in determining creditworthiness. Capacity is assessed by weighing a borrower's earning ability and the likelihood of continuing income against the amount of debt the borrower carries at the time the application for credit is made. While capacity may be considered in a credit decision, the credit report does not contain information about earning ability or the likelihood of continuing income. Chapter 7 Bankruptcy Chapter of the Bankruptcy Code that provides for court administered liquidation of the assets of a financially troubled individual or business. Chapter 11 Bankruptcy Chapter of the Bankruptcy Code that is usually used for the reorganization of a financially troubled business. Used as an alternative to liquidation under Chapter 7. The U.S. Supreme Court has held that an individual may also use Chapter 11. Chapter 12 Bankruptcy Chapter of the Bankruptcy Code adopted to address the financial crisis of the nation's farming community. Cases under this chapter are administered like Chapter 11 cases, but with special protections to meet the special conditions of family farm operations. Chapter 13 Bankruptcy Chapter of the Bankruptcy Code in which debtors repay debts according to a plan accepted by the debtor, the creditors and the court. Plan payments usually come from the debtor's future income and are paid to creditors through the court system and the bankruptcy trustee. Charge-Off Action of transferring accounts deemed uncollectible to a category such as bad debt or loss. Collectors will usually continue to solicit payments, but the accounts are no longer considered part of a company's receivable or profit picture. Civil Action Any court action against a consumer to regain money for someone else. Usually, it will be a wage assignment, child support judgment, small claims judgment or a civil judgment. Claim amount The amount awarded in a court action. Closed Date The date an account was closed. Co-Maker A creditworthy co-maker is sometimes required in situations where an applicant's qualifications are marginal. A co-maker is legally responsible to repay the charges in the joint account agreement.

Consumer Credit Counseling Service A non-profit organization that assists consumers in dealing with their credit problems. Consumer Credit Counseling Service has offices throughout the United States that can be located by calling 1-800-388-cccs (2227). Co-Signer Person who pledges in writing as part of a credit contract to repay the debt if the borrower fails to do so. The account displays on both the borrower's and the co-signer's credit reports. Collection A collection account shows a past due or delinquent account. Typically it occurs when the account has been transferred from a routine debt to an internal Collection Department or to a separate professional debt collecting firm. Collections generally remain on a credit report for a period of 7 years. Credit Limit /Line of Credit In open-end credit, the maximum amount a borrower can draw upon or the maximum that an account can show as outstanding. Credit items Information reported by current or past creditors. Credit Report Confidential report on a consumer's payment habits as reported by their creditors to a consumer credit reporting agency. The agency provides the information to credit grantors who have a permissible purpose under the law to review the report. Credit Score A credit scoring system that identifies creditworthy customers and predicts the likelihood of serious delinquency within 24 months.  Payment History - 35%  Length of Credit History - 15%  New Credit - 10%  Types of Credit Used - 10%  Debt - 30% Companies and individuals rate credit scores differently. Generally…  740 – 850 is considered excellent  680 – 740 is considered good  620 – 680 is considered okay  580 – 620 is where the trouble starts  500 – 580 is considered bad  Below 500 is quite bad

Credit Scoring Tool used by credit grantors to provide an objective means of determining risks in granting credit. Credit scoring increases efficiency and timely response in the credit granting process. Credit scoring criteria is set by the credit grantor. Creditworthiness The ability of a consumer to receive favorable consideration and approval for the use of credit from an establishment to which they applied. -D- Date Filed The date that a public record was awarded. Date of Status on the credit report, date the creditor last reported information about the account. Date Opened On the credit report, indicates the date an account was opened. Date Resolved The completion date or satisfaction date of a public record item. Delinquent Accounts classified into categories according to the time past due. Common classifications are 30, 60, 90 and 120 days past due. Special classifications also include charge-off, repossession, transferred, etc. Discharged Granted by the court to release a debt or from most of his debts that were included in a bankruptcy. Any debts not included in the bankruptcy alimony, child support, liability for willful and malicious conduct and certain student loans - cannot be discharged. Disclosure Providing the consumer with his or her credit history as required by the FCRA. Dismissed When a consumer files a bankruptcy, the judge may decide to not allow the consumer to continue with the bankruptcy. If the judge rules against the petition, the bankruptcy is known as dismissed. Dispute If a consumer believes an item of information on their credit report is inaccurate or incomplete, they may challenge, or dispute the item. The Credit Bureaus will investigate and correct or remove any inaccurate information or information that cannot be verified. Credit Bureaus give consumers the option of disputing online or they may call the telephone number on their credit report for assistance.

-E- ECOA Standard abbreviation for Equal Credit Opportunity Act. End-User The business that receives the report for decision making purposes that meet the permissible purpose requirements of the FCRA. Equal Credit Opportunity Act (ECOA) Federal law, which prohibits creditors from discriminating against credit applicants on the basis of sex, marital status, race, color, religion, age, and/ or receipt of public assistance. Equifax One of the three national credit reporting agencies, headquartered in Atlanta, Ga. The other two are Experian and Transunion. Experian One of the three national credit reporting agencies, with U.S. headquarters in Costa Mesa, CA. The other two are Equifax and TransUnion. -F- Fair Credit and Charge Card Disclosure Act Amendments to the Truth In Lending Act that require the disclosure of the costs involved in credit card plans that are offered by mail, telephone or applications distributed to the general public. Fair Credit Billing Act Federal legislation that provides a specific error resolution procedure to protect credit card customers from making payments on inaccurate billings. Fair Credit Reporting Act (FCRA) Federal legislation governing the actions of credit reporting agencies. Fair Debt Collection Practices Act (FDCPA) Federal legislation prohibiting abusive and unfair debt collection practices. Finance Charge Amount of interest. Finance charges are usually included in the monthly payment total. Fixed Rate An annual percentage rate that does not change.

-G- Generation Identifier Generation identifiers are Jr. , Sr., II, III, IV, etc. Geographical Code This information is received from the Census Bureau and represents the state, Metropolitan Statistical Area, county, tract and block group of the reported address. This code is similar to a ZIP CodeTM. Grace period The time period you have to pay a bill in full and avoid interest charges. Guarantor Person responsible for paying a bill. -H- High balance The highest amount that you have owed on an account to date. -I- Installment Credit Credit accounts in which the debt is divided into amounts to be paid successively at specified intervals. Investigation The process a consumer credit reporting agency goes through in order to verify credit report information disputed by a consumer. The credit grantor who supplied the information is contacted and asked to review the information and report back; they will tell the credit reporting agency that the information is accurate as it appears, or they will give us corrected information to update the report. Investigative Consumer Reports These are consumer reports that are usually done for background checks, security clearances and other sensitive jobs. An investigative consumer report might contain information obtained from a credit report, but it is more comprehensive than a credit report. It contains subjective material on an individual's character, habits and mode of living, which is obtained through interviews of associates. Involuntary Bankruptcy A petition filed by certain credit grantors to have a debtor judged bankrupt. If the bankruptcy is granted, it is known as an involuntary bankruptcy.

Item-Specific Statement offers an explanation about a particular trade or public record item on your report, and it displays with that item on the credit report. -J- Judgment Granted The determination of a court upon matters submitted to it. A final determination of the rights of the parties involved in the lawsuit.. Judgment in the Credit Section A judgment generally remain on the credit report for 7 years Judgment in the Civil Section We list only judgments that are relevant to the screening being performed, for example we report rental cases for tenant screening. Judgments generally remain on civil records for as long as that particular court decides to archive them, typically at least five years. -L- Last Reported On the credit report, the date the creditor last reported information about the account. Lender Someone who makes funds available to another with the expectation that the funds will be repaid, plus any interest and/or fees. A lender can be an individual, or a public or private group. Lenders may provide funds for a variety of reasons, such as a mortgage, automobile loan or small business loan. Liability Amount Amount for which you are legally obligated to a creditor. Lien Legal document used to create a security interest in another's property. Alien is often given as a security for the payment of a debt. A lien can be placed against a consumer for failure to pay the city, county, state or federal government money that is owed. It means that the consumer's property is being used as collateral during repayment of the money that is owed. Line of Credit In open-end credit, the maximum amount a borrower can draw upon or the maximum that an account can show as outstanding. Location Number The book and page number on which the item is filed in the court records.

-M- Mortgage Identification Number (MIN) Indicates that a loan is registered with Mortgage Electronic Registration Systems Inc., which tracks the ownership of mortgage rights. This number will follow the homeowner throughout the mortgage. Most Recent Date The date of the recent account condition or payment status. This date is also the balance date. -N- Negative Trade An account with a payment history of one of the below - Pays 61 – 90 Days; Not more than 3 payments Past Due - Pays 91 – 120 Days; Not more than 4 payments Past Due - Pays over 120 Days; 5 or more payments are Past Due - Collection / Charge off - Repossession / Foreclosure - Public Records Negative trades generally remain on the credit report for 7 years (public records 7 to 10 years) Notice of Results If your investigation results in information being updated or deleted, you may request that we send the corrected information in your credit history to eligible credit grantors and employers who reviewed your information within a specific period of time. If your investigation does not result in a change to your credit history, results will not be sent to other lenders. -0- Obsolescence A term used to describe how long negative information should stay in a credit file before it's not relevant to the credit granting decision. The FCRA has determined the obsolescence period to be 10 years in the case of bankruptcy and 7 years in all other instances. Unpaid tax liens may remain indefinitely, although Experian removes them after 15 years. Opt-ln The ability of a consumer who has opted out to have their name re-added to prescreened credit and insurance offer lists; direct marketing lists and individual reference service lists. Consumers who have previously opted out of receiving prescreened offers may have their names added to prescreened lists for credit and insurance offers by calling 1-888-50PT OUT (1 888 567 8688).

Opt -Out The ability of the consumer to notify credit reporting agencies, direct marketers and list compilers to remove their name from all future lists. Consumers may opt out of prescreened credit and insurance offer lists by calling 1-888-50PT OUT (1 888 567 8688). Original Amount The original amount owed to a creditor. -P- Payment Status Reflects the previous history of the account, including any delinquencies or derogatory conditions occurring during the previous seven years (i.e., Current account, delinquent 30, current was 60, redeemed repossession, charge-off - now paying, etc.) Permissible Purposes There are legally defined permissible purposes for a credit report to be issued to a third party. Permissible purposes include credit transactions, employment purposes, insurance underwriting, government financial responsibility laws, court orders, subpoenas, written instructions of the consumer, legitimate business needs, etc. Personal Information Information on your personal credit report associated with your records that have been reported to us by you, your creditors and other sources. It may include name variations, your driver's license number, Social Security number variations, your date or year of birth, your spouse's name, your employers, your telephone numbers, and information about your residence. Personal Statement You may request that a general explanation about the information on your report be added to your report. The statement remains for two years and displays to anyone who reviews your credit information. Petition If a consumer files a bankruptcy, but a judge has not yet ruled that it can proceed, it is known as bankruptcy petitioned. Plaintiff One who initially brings legal action against another (defendant) seeking a court decision. Potentially Negative Items Any potentially negative credit items or public records that may have an effect on your creditworthiness as viewed by creditors. Public Record Data Included as part of the credit report, this information is limited to tax liens, lawsuits and judgments that relate to the consumer’s debt obligations.

-R- Recent Balance The most recent balance owed on an account as reported by the creditor. Recent Payment The most recent amount paid on an account as reported by the creditor. Released This means that a lien has been satisfied in full. Report Number A number that uniquely identifies each consumer credit report with the credit bureaus. Reported Since On the credit report, the date the creditor started reporting the account to the credit bureaus. Repossession A creditor's taking possession of property pledged as collateral on a loan contract on which a borrower has fallen significantly behind in payments. Request an Investigation If you believe that information on your report is inaccurate, we will ask the sources of the information to check their records at no cost to you. Incorrect information will be corrected; information that cannot be verified will be deleted. The credit bureaus cannot remove accurate information. An investigation may take up to 30 days. When it is complete, we'll send you the results. Request for Your Credit History When a credit grantor, direct marketer or potential employer makes a request for information from a consumer's credit report, an inquiry is shown on the report. Grantors only see credit inquiries generated by other grantors as a result of an application of some kind, while consumers see all listed inquiries including prescreened and direct marketing offers, as well as employment inquiries. According to the Fair Credit Reporting Act, credit grantors with a permissible purpose may inquire about your credit information prior to your consent. This section also includes the date of the inquiry and how long the inquiry will remain on your report. Responsibility Indicates who is responsible for an account; can be single, joint, co-signer, etc. Revolving Account Credit automatically available up to a predetermined maximum limit so long as a customer makes regular payments. Risk Scoring Models A numerical determination of a consumer's creditworthiness. Tool used by credit grantors to predict future payment behavior of a consumer.

-S- Satisfied If the consumer has paid all of the money the court says he owes, the public record item is satisfied. Secured Credit Loan for which some form of acceptable collateral, such as a house or automobile has been pledged. Security Real or personal property that a borrower pledges for the term of a loan. Should the borrower fail to repay, the creditor may take ownership of the property by following legally mandated procedures. Security Alert Statement that is added once the credit bureaus are notified that a consumer may be a victim of fraud. It remains on file for 90 days and requests that a creditor request proof of identification before granting credit in that person's name. Service Credit Agreements with service providers. You receive goods, such as electricity, and services, such as apartment rental and health club memberships, with the agreement that you will pay for them each month. Your contract may require payments for a specific number of months, even if you stop the service. Settle Reach an agreement with a lender to repay only part of the original debt Source The business or organization that supplied certain information that appears on the credit report. Status On the credit report, this indicates the current status or state of the account. -T- Terms This refers to the debt repayment terms of your agreement with a creditor, such as 60 months, 48 months, etc. Third-Party Collectors Collectors who are under contract to collect debts for a credit department or credit company; collection agency. Tradeline Entry by a credit grantor to a consumer's credit history maintained by a credit reporting agency. A tradeline describes the consumer's account status and activity. Tradeline information includes names of companies where the applicant has accounts, dates accounts were opened, credit limits, types of accounts, balances owed and payment histories.

Transaction Fees Fees charged for certain use of your credit line- for example, to get a cash advance from an ATM. TransUnion One of three national credit reporting agencies. The other two are Experian and Equifax. Truth in Lending Act Title I of the Consumer Protection Act. Requires that most categories of lenders disclose the annual interest rate, the total dollar cost and other terms of loans and credit sales Type This refers to the type of credit agreement made with a creditor; for example, a revolving account or installment loan. -U- Unsecured Credit Credit for which no collateral has been pledged. Loans made under this arrangement are sometimes called signature loans; in other words, a loan is granted based only on the customer's words, through signing an agreement that the loan amount will be paid. -V- Vacated Indicates a judgment that was rendered void or set aside. Variable Rate An annual percentage rate that may change over time as the prime lending rate varies or according to your contract with the lender. Verification Verifying whether data in a credit report is correct or not. Initiated by consumers when they question some information in their file. Credit reporting agencies will accept authentic documentation from the consumer that will help in the verification. Victim Statement A statement that can be added to a consumer's credit report to alert credit grantors that a consumer's identification has been used fraudulently to obtain credit. The statement requests the credit grantor to contact the consumer by telephone before issuing credit. It remains on file for 7 years unless the consumer requests that it be removed. Voluntary Bankruptcy If a consumer files the bankruptcy on his own, it is known as voluntary bankruptcy.

-W- Wage Assignment A signed agreement by a buyer or borrower, permitting a creditor to collect a certain portion of the debtor's wages from an employer in the event of default. Withdrawn This means a decision was made not to pursue a bankruptcy, a lien, etc. after court documents have been filed. Write of Replevin Legal document issued by a court authorizing repossession of security.