Exam (elaborations)
HUD Housing Counseling Exam|357 Questions with 100% Verified Solutions
HUD Housing Counseling Exam|357 Questions with 100% Verified Solutions
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HUD Housing Counseling Exam|357Questions with 100% Verified
Solutions
Rental Obstacle + Solutions: Low Income - --Some Renters reject people
whose Rent would be more than 30% of GMI
-Solutions
-Apply for Housing Assistance
-Expand housing search areas
-Get a roommate
-Move in w/family or friends
-Strategies for decreasing expenses and debt - -Prioritize "needs over
"wants"
-reduce or eliminate "wants"
-cancel or downgrade services(e.g. cable, telephone)
-limit miscellaneous spending
- stick to a shopping list
- pay off a loan or credit card
- move to more affordable housing
- change insurance coverage to lower premiums
-Fair Credit Reporting Act (FCRA) - --Right to know what is your file
-Right to dispute incomplete or inaccurate information
- Access to your file is limited only to people w/valid need (i.e, creditor,
insurer)
-You may seek damages from violators (sue)
- States have their own rules which additionally project
-What documents to use when tracking income - --Paychecks, direct
deposits slips
- If self-employed, income + expenses sheet
- Additional income checks or cash
- Government benefit letters
-Site to obtain free credit report - -www.annualcreditreport.com
-Chapter 13 bankruptcy - -Allows individuals w/regular income to develop a
plan to repay all or part of their debts over 3 to 5 years can stop foreclose
sure proceedings + may delinquent mortgage payments over time
-Steps to take if victim of identity theft - --Place a fraud alert w/the credit
reporting agencies
,- order credit reports to review + identify inaccuracies
- create an identify theft report obtain ID theft affidavit from the FTC
- File a police report
-Fair and Accurate credit Transcription Act (FACTA) - --Right to free annual
credit report
- Right to place a fraud alert on your credit file
- Receipts may not include entirety of credit card #s
-Four Steps of Asset building - -1.Chose the right bank or credit union
account
2. Build savings for emergencies + Large purchase 3. Invest for retirement
4. Take advantage of tax credits
-Fair credit billing Act (FCBA) - --You can dispute billing errors associated
w/credit card account
- Must be billed in a timely manner
-% of factors how they affect credit score - -35% account history
30% amounts owed
15% length of credit history
10% new credit
10% types of credit used
-Credit reporting agencies on FICO Score - --EQUIFAX
- EXPERIAN
- TRANS UNION
-FICO Score - --Credit scores often referred to as
= Fair Isaac Corporation
Range:300-850
-Means test - -A bankruptcy qualification that considers income + equity in
assets to determine if a client has the ability to repay part of the debt
-How to fix: Credit Card maxed / too much debt - --Pay down debt + keep
balances low
- Pay more than minimum
- know the balance - check statements
-How to fix: Delinquencies / collections / Judgments - -Get current + pay on
time moving forward
- sett up payments reminders
- adjust budget
-Factors in determining credit score - --Payments History
,- Capacity used
- Length of credit history
- Type of credit used
- New credit
-Inquires - -Request initiated by a company or person for a consumer's
credit profile information
-How to fix: Incorrect information on a credit report - -Dispute inaccuracies:
*Notify credit reporting agencies of inaccuracies + provide supporting
documentation
* keep records of dispute documentation
-Steps in creating a budget - -1. Help client identify short + long-term goals
2. Track income
3. Track expenses
4. Adjust goals + budget *increase income *decrease expenses + debt %.
5. Create client action plan
-Section of Credit Report: Public Records - -Items that are listed in the
public record, including -bankruptcy
- judgments
-tax liens
- wage garnishments
-Section of Credit Report: Personal information - -Consumer identification
information, including:
-Name
- Social Security number
- Addresses
-Phone #
- Employer's
-Section of Credit Report: Account / Trade line information - -Info about
each consumer credit account, including:
- payment history
- account dates
- credit limit
- balances owed
-Payment History - -Timely / Late
- Payments:Positive: timely
- Negative: late - lien, judgment, collection account, charge-off account
-Type of credit used - -Positive: Different types of credit show variety -
demonstrates that consumers can manage different types of credit
, Negative: Fever types show limited profile info - higher risk
-Length of credit history - --How long a person has bad credit
Positive: Longer credit history provides more info for lenders - lower risk
Negative- shorter history provides little to no info for lenders - higher risk
-Capacity Used - --How much of credit available has the person used
Positive: low credit utilization = financial management
Negative: High credit card balances = poor financial management - maxed
out credit cards
-Strategies to increase income (9) - --Find second job
-Work Over time
-Negotiate higher salary / wage
-Sell assets (e.g. car)
-Hold a yard/garage sale
-Teach a skill / craft/ activity
-Sell a craft
_Charge rent (adult +dependents living @ home)
-Evaluate tax withholding's (if over-with holding) change to increase income
received)
-Items to include when tracking expenses - -Monthly bills (utilities, cell
phone, etc.) All Fixed monthly expenses all cash expenses
Seasonal or annual expenses (i.e car registration, gifts, holiday season,
vacation)
-Documents to use when tracking expenses - --Bills
-Bank statements
-Credit cards statements
-Records for estimated amount of expected periodic expense
-Chapter 7 bankruptcy - -Liquidation bankruptcy
-Process of selling non-exempt assets to repay creditors in Chapter 7
bankruptcy
-Must meet w/an attorney to determine ability to repay debts - means test
-Tips for avoiding predatory lending - -1.Shop for a loan
2.Ask questions
3.Beware of deals that sound to o good to be true
4. Know and understand you financial situation
-Credit Score - -A numerical interpretation of a customer's creditworthiness
based on information in his/her credit report
-How to fix:
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