FINANCIAL AID PUBLICATIONS

STUDENT FINANCIAL AID HANDBOOK 2003– 2004

Chapter Ten

YOU AND YOUR CREDIT

Eligibility for most private loan programs that are utilized by students is based upon credit worthiness. In some instances, a credit score is used to initially determine the general status of an applicant's credit history and used in conjunction with the review of the credit report.

As such, the following list represents a GENERAL example of credit criteria that have been used by the majority of private lending programs to establish one's eligibility for a private loan. We strongly recommend to each prospective borrower that you contact the appropriate national credit bureau for your area of the country and request a copy of a current credit report before applying for financial aid. Erroneous data or "bad" credit issues can be addressed immediately and will likely prevent delays in loan approval.

CREDIT CRITERIA
Private loan lenders will review the complete listing of credit activity when determining your and/or your family credit status and/or credit worthiness. Therefore it is generally necessary to have a relatively long period of non-derogatory credit history in order to be approved.

• You should have no or a very limited number of accounts showing a 30, 60 or 90-day delinquency status.
• You should have no record of a collection or charged-off account.
• You should have no record of foreclosure, repossession, open judgment or suit, unpaid prior education loan default or other negative public credit record items.
• You should have no record of a bankruptcy.
• There should be a limited number of inquiries to an authorized credit reporting agency.

Financial transactions of any sort are reported on the credit report, such as prior student loans, personal consumer loans, credit cards, tax liens, and debts to private corporations. Adverse credit information can be reported for up to seven years.

The absence of any credit history IS NOT viewed as bad credit. You cannot be denied an educational loan because you have no credit history. However, if you had adverse credit within the past seven years, such as having filed for bankruptcy, a tax lien, or defaulted student loan, or any other unresolved credit problem that can be sent to a collection agency, the alternative loan application can be denied. To request a copy of your credit report, you should contact one of the three major credit bureaus. This request should be made at least three months prior to your first day of classes.

There is generally a cost attached to this request, UNLESS you have been denied an application for credit. The request can be made in writing, over the phone or through the INTERNET. If a request is made in writing, it must include the following:

Requestor's full name,
Social Security number,
Current address,
Any previous addresses for the past two (may request 5) years,
Current employer (if applicable),
Date of birth,
Daytime telephone number,
Signature,
Applicable Fee (generally $8.00)

Below are the addresses, phone numbers and websites for the three major credit bureaus:

Trans Union LLC*
P. O. Box 1000
Chester, PA 19022
1-800-888-4213
www.transunion.com

Experian National Consumer Asst. Ctr.
P.O. Box 2002
Allen, TX 75013-2002
1-888-397-3742
www.experian.com/consumer.index.html

Equifax
Credit Information Services
P.O. Box 740241
Atlanta, GA 30374
1-800-685-1111
www.equifax.com

*If you live in Colorado, Georgia, Maryland, Massachusetts. New Jersey or Vermont, you maybe eligible for a free copy of your credit report ordered by phone or mail. Your free report cannot be ordered by Internet, only by phone or mail.