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Understanding Credit Reports Analyzing John's Fina

This activity uses John Doe's financial story and a sample credit report to help students learn how to read and understand credit reports. Students analyze his credit use, debts, and recent financial inquiries to answer related questions.

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    Examining Your Credit Report CHAPTER 4, LESSON 3 DIRECTIONS Read John's story and review the sample credit report. Then, read the article " How to Read YourCredit Report.' Use the information in your textbook (Cha pter 4, Lesson 3) r on the sa mple credit report , and from the article to answer the q uestions. John's Story John Doe moved to Los Angeles, California, three years ago after graduating from college. He was offered an incredible job that he couldn't pass up. He loves his job and is currently saving as much money as he can to get enough for a down payment to buy a house. However, he thinks that's going to take at least another year. He does all of his banking at Skyline Financial in Los Angeles—checking, savings, and a money market account. He has one credit card that he owes less than $900 on, and he just signed up for a new credit card from Rillards because he needed a new suit for work. When he moved to Los Angeles, he bought a new car with a loan from M&X Finance. His largest debt is his student loan that eats up about $350 every month. He makes minimum payments on his credit card and student loan debt. Recently, John was considering trying to save gas by buying a motorcylce to get around the city, and the motorcycle shop ran his credit through their finance company—WB&T Dealer Finance. He also recently checked with another insurance company—Allstop Insurance—to see if he could get a better deal on his auto insurance.

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    Sample Credit Report Personal Information Name: John Doe Social Security Number: 1 2 3 - 4 5 - 6 7 8 9 Date of Birth: Jan 1, 2000 Phone Number: 5 5 5 - 7 6 5 - 4 3 2 1 Address: 123 S event?. S t r e e t . Loa Angeles, CA 54321 Credit Summa Openand Paid Available Remaining Payment Credit Accounts Credit Loan Balances History Chart C r e d i t a 3 ,000 38 70 E£X Finance 3 3 0 . 0 0 0 323, 456 30 US Dept of Ed 333, 450 Accounts Shared With Someone Else Accounts That Have Been Sent to Collections Public Records Bankruptcies: You c u r r e n t l y have none i n your f i l e . Judgments: you currently have none i n your f i l e . Liens: you currently have none in your f i l e . Credit Inquiries Hard Inquiries Date Company Aug i , 2021 . ■ TBtT D e a l e r Finance July 3 , 2021 Sesame N a t i o n a l Eanl: Soft Inquiries Date Company Description July 5, 2021 A l l B t o p Ins Co Promotional Inquiry June 23 , 2021 Hillards Promotional Inquiry

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    Examining Your Credit Report CHAPTER 4, LESSON 3 How to Road Your Credit Report your information to whatever company may be c o n s i d e r i n g g i v i n g a loan or credit account. These bureaus all operate i n d e p e n d e n t l y , so their reports on you may contain slig htly different information d e p e n d i n g on the credit-reporting company they used. HOW TO GET A CREDIT REPORT You're allowed one free copy of your cred it report every year from each of the major credit-reporting agencies we just talked about. But the reports aren't automatically mailed to you— you have to ask for them! And since each agency keeps different details on file, it's worth checking with all three. If you play your cards right, you can even stagger them so you re getting a free report nearly every quarter. Nowthat you know how to get your credit report, we II walk you through the four major areas you need to check for any red flags. These could help you spot potential identity theft situations, so listen up! HOW TO READ YOUR CREDIT REPORT Identifying Information This section has any personal information that could be used to identify you, including: • Name • Address • Social Security number • Date of birth • Phone number By now, you know exactly how we feel about credit scores (hint: they re bogus). But one thing you still need to pay attention to is your credit report. Even if you re debt-free and don't care what big banks and lenders think of you, you can't just ignore your credit report. You still need to check it for errors or signs of fraud at least once a year. But sifting t h r o u g h these things can be pretty confusing, especially if you do nt know how to read your credit report or what kind of red flags to look for. We know it can be a lot to take in. But don t worryI We've done the heavy lifti ng so you don't have to. Ready, set, let's walkthrough everything you need to know about how to read your credit report. WHAT IS A CREDIT REPORT? A credit report is kind of like a report card for your credit history. It car be used by potential lenders to determine your "risk," which is basically just how likely you are to pay your monthly payments on time. A credit report all about you can tell them: • The date you opened any credit accounts or t o o k o u t any loans • The current balance on each account • Your payment history • The credit limits a nd total loan amounts • Any bankruptcies or tax liens • Your identifying information {name, address, Social Security number) A c r e d i t bureau or credit-reporting c o m p a n y like Equifax, Experian or TransUnion will provide

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