Credit Education overview by National Credit Education Services

1. Welcome ToN.C.E.S.Credit Restoration& Education Seminar

2. AGENDA Introduction / NCES Mission Credit Pitfalls, Traps and the remedy to over come these situations Common Misconceptions Personal Credit, Budgeting & Moving Forward Conclusion Questions & Answers

3. NCES MISSION To educate the masses on the pitfalls of credit To leverage credit to build assets not liabilities To empower people to navigate their finances confidently Our is to restore America by restoring you Let us help you navigate the financial restructuring of your life

4. THE FAIR CREDIT REPORTINGACT OF 1971 The Fair Credit Reporting Act (FCRA) was passed by congress with the intention to regulate the credit reporting agencies and promote the accuracy of the information in consumer credit reports. The Act spelled out all the rules and regulations that the credit reporting agencies had to follow before they added anything to a consumer’s credit report. Information about “you” has to be accurate and verified before it is entered on your credit reports. The Federal Trade Commission is the government agency responsible for Enforcing the Fair Credit Reporting Act.

5. CREDIT REPORTING AGENCIES 3 Major Reporting Agencies Experian (Fair Isaac Corporation) Equifax (Beacon) TransUnion (Empirica) Functions of CRA’s Collect and maintain information about consumer’s credit history. This information is obtained from banks, credit card companies and various financial institutions. The CRA’s sell this information to lenders and other creditors. The CRA’s are not part of the government.

6. COMMON CREDIT ERRORS Inaccurate Information: Information that cannot be verified by the CRA and/or the creditor grantor Erroneous Information: Information that has been entered onto a consumer’s credit report due to human error (data entry error), Social Security Number mismatch error, mixed file error, similar name error, or when “reasonable procedures” were not followed when the information was entered on the credit report, or any such related error Obsolete Information: Information that is beyond the industry standards of seven years; or ten years for bankruptcy

7. CREDIT REPORT ACCURACY Nearly 80% of all consumer credit reports have significant errors 25% of which are serious enough to potentially result in a credit denial These errors could affect credit scores by 50 points or more HOW DO THESE ERRORS OCCUR? Loans, payment data or credit card information is applied to the wrong account Name consistency, i.e. John Carl, John Karl, John J. Karl Human error when applications are reviewed, sold or transferred between lenders

8. WHAT ARE FICO CREDIT SCORES? A statistical methodology to evaluate an individual’s credit worthiness It’s a Reflection of a person’s credit behavior, character and financial state. Creditors use FICO scores to determine an individual’s interest rate and credit limit and the ability to borrow. FICO scores range from 300 to 850 points

9. CREDIT COMPOSITION 10% 5 KEY COMPONENTS OF A CREDIT SCORE Paid as agreed Balance vs. credit limit Length of credit history Type of credit Credit Inquiries 10% 35% 15% 30% HOW CREDIT AFFECTS YOU The interest rate you pay on credit cards and loans Your ability to get a checking account Rates on your auto insurance Employment Utilities

10. 6 METHODS TO ESTABLISH CREDIT Apply for a secured credit card, ex. Bank card Maintain a low balance on the card Establish a long history with the account Errorless late payment history Re-establish student loans, deferment Obtain a small auto loan

11. SECURED CREDIT CARDS One of the best ways to establish credit Apply on-line for a secured card, one accepted anywhere – NOT a catalog card Purchase a $200 - $500 bond from the bank and use it to establish a line of credit

12. PITFALLS OF SECURED CARDS Pay on or before the due date to avoid a $35 - $40 late fee If unpaid, a $40 over the limit fee is incurred Below example: assume a $300 credit limit, and a late- payment

13. PITFALLS CONTINUED Credit cards charged off Assigned to a collection agency Collection agency adds a new derogatory account on your credit report Add interest, penalties, legal fees and more fees

14. COLLECTION AGENCIES Governed by the FTC Privately Owned Operates under the guidelines of the Fair Debt Collection Practices Act Debt collectors, whether a company or an attorney’s office Has to validate the debt

15. ACTUALIZED COST OF AN AUTOMOBILE

16. OR…. INVEST IN THE FUTURE A house that sold for nearly $1 million in 2004 Foreclosure price of $380,000 in 2010 FHA loan: 640-680 credit score with 5.25% rate = Monthly price of $2,300

17. HUMMER vs. HOUSE

18. BUDGETING (Based on a monthly average of a family of 4)

19. BUDGETING Total monthly critical expenses = $5,400 Take-home net income = $6,000 Remainder money $6,000 - $5,400 = $600 Compounded over 72 months = $60,000!

20. OUR SERVICE Provide the tools and resources necessary to understand: The FICO scoring system The Fair Debt Collection Practice Act (fighting collections agencies) How to protect your credit during hardship (layoff, divorce, death, etc) How to regain your financial independence and build lasting prosperity We give you: On-line educational tools, automated budgeting worksheets; We want to answer the tough credit questions. 24/7 on-line status updates Good Credit Gives Me Time For My Family

21. CONCLUSION Understanding everything about credit is key to achieving financial security It is important to correct your current situation and establish a path forward NCES gives you the tools and resources to establish your new financial future.

22. NCES COMMITMENT To restore America by RESTORING YOU Who make America work. If you’re hurting financially and can’t borrow due to bad credit, our job is to help you regain your rightful place in AMERICA.

23. NCES AT WORK!

24. The Cost Of Financial Freedom? One Time Payment $349.00 Or Split Payment Option $175.00 Now Next Payment In 30 Days $185.00 (Includes $11.00 Processing Fee) Total $360.00 to break the chains!