Maintaining a high credit score will earn you the respect of bankers, mortgage lenders, landlords, and potential employers. They will reward your responsible use of money with lower interest rates and attractive loan terms. When it comes time to buy a car or house, you’ll be glad you paid attention to the small habits that keep credit scores strong—such as paying credit card bills on time.
Your spending, borrowing, and even rent-paying behavior determines how your credit score may rise or fall on a continuing basis.
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Federal Trade Commission: Credit and Loans
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Credit Card Repayment Calculator
Understanding Credit v.s. Debit Cards
Credit cards and debit cards are the two most popular forms of plastic money. Each has its own benefits and drawbacks. Many people carry both, but a review of pros and cons can help you decide if you want to limit yourself to one or the other.
Pros: A major advantage of credit cards is personal liability limitation. With identity theft now a serious issue, the federal Truth in Lending law limits to $50 the amount a cardholder must pay if a credit card is stolen.
Credit cards also:
- Offer a convenient purchase method when you don't have cash.
- Help you build up a credit history.
- Provide a source of money for emergencies.
- Are accepted by most stores.
- Offer benefits such as frequent flier miles.
- Allow you to make purchases online.
Cons: A disadvantage to credit cards is they can be too convenient. You might appreciate that you can buy what you need without going to the bank to withdraw cash, but a credit card balance can get out of hand quickly. Credit card companies can also:
- Charge late payment fees of around $30.
- Charge annual use fees on many cards.
- Increase your interest rate, often in excess of 22%, if you miss a payment.
- May require you to spend $10,000 or $15,000--often on a dollar-per-mile basis-to get to that magic "free trip" number.
- Charge transaction fees on cash advances.
- Use "floating" annual interest rates that can go up without a notice.
Pros: Debit cards offer a convenient way to buy things in a manner that is almost like writing a check, but faster. When you use your debit card, the purchase amount is subtracted from your bank balance almost immediately. Debit cards also:
- Can be used to obtain money from ATMs all over the world.
- Provide you with a receipt you can use to check your balance.
- Allow you to buy postage stamps at some ATMs.
- Allow you to make deposits or transfer funds between accounts.
- Allow you to make purchases online.
Cons: One danger of carrying a debit card is the trouble you can get into if it is stolen. You can be held accountable for $500 worth of unauthorized purchases if a debit card theft is not reported within 48 hours. If you wait 60 days or more to report the loss, a thief can clean out your entire account. With debit cards you may also:
- Pay a quarterly or annual use fee.
- Pay a "point-of-sale" fee when swiping the card through a reader and entering your personal identification number.
- Pay a fee for using it at an ATM not owned by your bank.
A credit report includes information on where you live, how you pay your bills, and whether you've been sued, arrested, or filed for bankruptcy. Nationwide consumer reporting companies sell the information in your report to creditors, insurers, employers, and other businesses that use it to evaluate your applications for credit, insurance, employment, or renting a home.
Your Rights: Credit Reporting
This Federal Trade Commission (FTC) government site contains information to read before you request your Free Credit Report.
- Your Access to Free Credit Reports' brochure explaining your rights and how to order a free credit report.
- Important guidelines for online security and warnings about how to avoid fraudulent imposter sites!
- Accurate spelling of the web address is extremely important.
You can order your free annual credit report in 3 ways:
1. By Phone: Call (877) 322-8228
2. By Mail: Complete the Annual Credit Request Form and mailing it to:
Annual Credit Report Request Service
P.O. Box 105281
Atlanta, GA 30348-5281
Click here for the Annual Credit Report Request Form to print and mail.
3. Online: The FTC site offers a direct link to the official free credit report site for security and to avoid confusion with fraudulent copy-cat or imposter sites. Click here for a direct link to the official free AnnualCreditReport.com site to order secure online copies of credit reports. If in doubt always access the official site link through the FTC website above.
The Fair Credit Reporting Act (FCRA) requires each of the nationwide consumer reporting companies — Equifax, Experian, and TransUnion — to provide you with a free copy of your credit report, at your request, once every 12 months.
The free credit report does not include your credit score. You can purchase your credit score from AnnualCreditReport.com, or from the following companies:
Equifax - www.equifax.com (1-800-311-4769)
Experian - www.experian.com (1-800-685-1111
TransUnion - www.transunion.com (1-800-888-4213)
You may be asked for an account number or Social Security number for identity verification. Since this site is recommended by the Department of Homeland Security US-CERT and the Multi-State Information Sharing and Analysis Center (MS-ISAC), it is certainly secure. You will not be charged for a credit report. This is simply to filter out duplicate names from yours.
You may see information that is incorrect about yourself, including past addresses or employers. This does not mean the credit report is outdated. Any disputed information should be corrected by following the instructions provided on the report. This is why it is important to review your credit report on an annual basis.
Note about Credit Reports and Credit Scores: Annual Credit Reports are free. Do not fall for the ads and websites that charge you for this report; if you want a 'credit score' provided there will be a fee requested.
Housing and Credit Counseling, Inc.
2601 Anderson Avenue Suite 203
Manhattan, KS 66502