Managing Your Credit: A Guide
You might not think about your credit much. Until you try to get a loan or enter into a service contract, that is. It’s disappointing to find out that the new home, car, trip, computer, phone – or whatever you’ve been coveting, will be denied to you because of bad credit. It’s all-too-easy to end up with an awful credit rating if you don’t start out with a good understanding of how it all works. Look to the tools and resources contained in this guide to help you understand credit, how your credit score is calculated, and how to avoid and eliminate debt.
Understanding Your Credit
Exactly how does credit work? How is it determined? What counts against your credit and who can see your credit score? How do you improve a bad credit rating? You’ll find the answers to those and many more questions within the resources listed in this section. These pages will help to educate you about credit and personal finance, and how these things can affect your life.
MyMoney.gov – My Money is the U.S. government’s website aimed at improving the financial literacy of all Americans. Here, you’ll find plenty of great advice for anyone who could use some know-how when it comes to personal finance.
FTC Employment and Background Checks Information – Read through this page to understand how your credit can affect your employment. You’ll also learn just what shows up on a background check and how it can influence potential employers.
My FICO – This page is a great place to learn all about your credit score. You’ll see exactly how your rating is figured, and get some very precise steps you can take toward improving it.
How To Dispute an Error on Your Credit Report – If your credit has been affected by a charge or charges you didn’t make, you need to take action as soon as you find out about it. This page, part of the Consumer Finance Protection Bureau (CFPB) website, will show you the appropriate avenues to take if you want to dispute an erroneous charge.
Ask CFPB– The Consumer Financial Protection Bureau is an excellent go-to resource for all kinds of credit and personal finance related questions. Just enter your query into the search bar on the site, and get immediate and relevant answers.
Checking Your Credit Rating
If you live in the United States, you can check your credit once a year using each of the 3 national reporting agencies. This comes as the result of legislation passed with the goal of helping people take control of their financial situation. The free check includes only information that is contained in the report, but you’ll have to pay extra to have that translated into your actual credit score. Chances are, if you have a lot of outstanding debt or payments you’ve defaulted on, you don’t have a good credit score. Even if you think your rating is good, you should always check your credit report to dispute any erroneous charges. This section is all about checking and understanding your credit report.
Equifax – Equifax is one of the accepted national Credit Reporting Agencies (CRAs) and you can visit their site to receive your free yearly report. You’ll have to sign up for a paid membership if you want to find out your credit score, though.
Experian – Like Equifax, Experian offers the mandatory yearly report free of charge. You can pay for extras here, too, like advice for raising your credit score.
TransUnion – Another of the three national CRAs, TransUnion offers a free annual report along with several paid options to upgrade your account.
FTC Free Credit Report Information – From the Federal Trade Commission, this page has the facts about your rights when it comes to accessing your credit information. There are also some warnings to check out so you don’t become a victim of fraud.
Understanding FCRA – The Electronic Privacy Information Center (EPIC) offers this information-packed article explaining the Fair Credit Reporting Act – how it came to be, how it works, and how it pertains to you. There are also a lot of facts that can help you avoid becoming a victim of financial crimes and fraud.
How to Get Out of Debt
Debt can become overwhelming. Finance fees, late fees, collection agencies. The longer you wait to catch up, the more buried you become as fees accumulate. Debt leads to bad credit, which can make it more difficult to pay off the debt. It can feel as if you’ll never get your head above water. If you have the right resources, though, you can absolutely wipe out your debt and improve your credit score no matter how bad things have gotten.
Consumer’s Guide to Credit Cards – This page focuses on helping you understanding the fine print on your credit card agreement so that you can avoid becoming entangled in a high-interest or predatory contract. Learn how to use credit cards to help – not hurt – your credit score.
Get-Out-of-Debt – This page from wikiHow.com offers some sound advice for digging yourself out of a financial hole. There are free Debt Tracking Sheets that you can download to help you stay on course.
Pay off Debt Using the Stack Method – This LifeHack.com article shows you how to get out of debt using the 8-step “stack method." If you vigilantly follow the advice outlined here, you will get yourself out of debt – no matter how overwhelming it seems when you start.
FDIC Identity Theft Information Page – Identity theft can wreak havoc on your credit. It’s bad enough to have a bad credit rating due to your own actions, but it’s terribly frustrating if it’s because someone fraudulently used your identity to make purchases. Learn how to protect yourself, and what steps you should take if you have been victimized.
5 Steps to Improving Your Credit Score – These sound tips come straight from the U.S. Federal Reserve. Review and remember these key steps for building up your rating.
Credit Management for Kids and Teens
The best time to learn about credit and personal finance is before kids set out on their own. More and more resources are being made available for children and teenagers to learn how to be smart with their money and to protect their credit rating. With the right knowledge and a bit of guidance, young people can avoid common mistakes and pitfalls.
Sand Dollar City – This is a beautifully animated virtual world where kids will have to take over a failing underwater candy store. They’ll have to make decisions about buying, selling, and taking out loans to see if they can make the sweet shop successful.
Suitable Investments Mystery – Older kids and teens (and probably a lot of adults) will love this whodunit mystery game. They’ll step into the role of a fraud investigator trying to get to the bottom of a major financial crime. It’s not only fun, they’ll also learn industry terms and understand more about how finance works on a large scale.
Your Credit History: Tips for Teens – These sound tips for teenagers come from The Mint.org. Click around the rest of the site for all kinds of great financial advice for young people.
Finance In The Classroom – This site has lessons and games for younger kids designed to teach basic financial literacy skills. The games explore the concepts of depositing and withdrawing, saving, budgeting, and lots more.
Financial Entertainment – This site offers free access to a vast selection of money management games for kids and teens. Some of the award-winning games include one where they’ll have to become financial manager for a celebrity and another where they have to run a farm.
