Study Guide SFS 1
Terms in this set (25)
What is FICO
Fair Isaac Corporation is largest and best known provider of an algorithm that calculates an individuals credit score
What are the 5 shades of FICO
payment history (35%), Utilization Level (30%), Length of credit history(15%), Dependency on revolving debt(10%), new credit (10%)
What its not in your FICO score ?
-Employment information, including your salary, occupation, title, employer, date employed or employment history.
-Where you live.
-The interest rates on your credit accounts.
-Child or family support obligations.
-"Soft" inquiries (requests for your credit report), which include requests you make to see your own credit reports or scores.
-Participation in a credit counseling program.
3 major credit reporting bureaus
Equifax, TransUnion, Experian
Which credit reporting bureau is used by SFS
What is average client credit score
what is average debt enrolled
What is the regulatory environment ?
FTC(Federal Trade commission), CFPB(consumer financial protection bureau 2011), FDCPA (fair debt collections practices act 1996)
What is credit card modification
A strategic approach to negotiation with creditors to resolve or lower the amount that is owed to them, on a monthly basis and overall. A successful settlement occurs when the creditor agrees to forgive a percentage of total account balance
What are the hardships associated
Divorce, loss of job, medical debt, loss of family member/ spo
how long does it take for clients to usually have their first debt settled
6 months, or 7-9 months
what kinds of debt are acceptable to enroll in the program
unsecured debts that are not collateralized by assets such as a home, bank account, or vehicle
What percent od settlements are term settlements ?
what is universal default
- creditors change terms based on risk profile changes and can adversely lower credit limit or change interest rate
What are the core values
results, innovation, teamwork, empathy, integrity, opportunity
What are the three marketing affiliates
Bridgeline Funding, Broadstar Financial, Pebbelestone Financial, Lafayette
What law groups do we partner with
Anchor, Bedrock, Royal for financial solutions
Amerilit for Timberline
Does a client have to close out all lines of credit when on the CCM program
What is a soft credit pull
typically occurs when a person or company checks your credit report as part of a background check. They will not affect your credit score. May or may not be recorded in your credit report depending on the credit bureau
Hard credit pull ?
occurs when a financial institution, such as a lender or credit card issuer, checks your credit report when making a lending decision. Commonly occurs when you apply for a loan, credit card, or mortgage. They may lower your credit score and remain on your card for 2 years
what are the 2 credit scoring companies
vantage(found on credit karma used by about 10% of lenders)
FICO most commonly recognized score (90% of lenders)
What are reasons customer and sales consultants may have different credit scores?
when score was checked, where score was checked, not all creditors report to all three credit bureaus
when the collateral for one loan is also used a collateral for another loan. this applies to credit unions
what are the three main objectives of a qualifying call
1. discover clients hardships
2. uncover their financial and lifestyle goals
3. verify and obtain clients financial information +
Under FICO 9.0 any account that is paid off or settled is dropped from the scoring calculation. Even is an account has gone into collections, if it is settled it no longer a factor in determining a credit score