Financial Literacy FAQ

What is a credit report?

A credit report provides the consumer or prospective lender a credit summary (which includes the credit history and credit score) to determine creditworthiness. Information in your credit report can affect your ability to get a job, a mortgage loan or other types of loans, a credit card or insurance. To make sure information is accurate in your report, contact the three primary credit agencies.

You may request information on your personal credit history noted in your credit report. This request is called an inquiry. If the inquiry has been made within the past 90 days, it is noted on the report to the lending entity. The lending entity (or prospective lender) wants to know the extent of other credit applications you may have outstanding so it can consider the impact of these potential obligations on your loan application.

If you find listings on your credit report that you wish to challenge, you may contact the credit agencies directly. Computerized services are fallible; therefore, credit agencies have established mechanisms to resolve such problems. Consumers should call or write a letter to the credit agency to request either a copy of the credit report or to reinvestigate or correct the items in question.

It is significant to note that your credit report may not be given to anyone who does not have a legitimate business need for it. Stores to which you are applying for may examine your record; curious neighbors may not. Prospective employers may examine your record with your permission.

For more information regarding this topic you can also refer to the Fair Credit Reporting Act of 1971 (15 U.S.C. § 1681 et seq.), which governs both credit grantors or those who provide the information and credit bureaus, as well as businesses who use credit reports. The Act regulates the compilation of information on individuals in order to offer legal protection to their privacy while not impeding the credit granting process.

It is recommended that you review your credit report at least once a year to make sure there are no errors or that you have not been made the victim of identity theft. In fact, you are entitled to one free copy of your credit report per year.

How can I request a credit report?

  1. Go to www.annualcreditreport.com
  2. Call toll free 1-877-322-8228
  3. Contact the three major credit bureaus listed below

Equifax
1-800-685-1111
www.equifax.com

Experian
1-888-397-3742
www.experian.com

Trans Union
1-800-888-4213
www.transunion.com

What is a Good First Credit Card?

If you or someone you know is looking into getting a first credit card, the number of choices can be overwhelming. Find a bank or credit card company that offers a low interest rate and apply. Do not apply for more than one card at a time as multiple credit applications can bring your credit down. Once you get accepted by one company, stop applying. If the credit card companies will not give you a credit card, try a department store card or a secured credit card account. A secured credit card account is one where you need to have the funds in your bank account to back up your spending.

How Much Can I Spend and Keep My Good Credit?

To build your credit and qualify for more credit in the future, you need to use the credit you have. According to MSN Money, the ideal amount of credit you should be using at any time is no more than 30 percent of the card's limit. When you get over that amount, pay your card back down before using it. By using up to 30 percent of your card's limit at a time, you are showing that you can maintain your credit accounts without maximizing them, and that you are a responsible consumer.

What if I Lose My Card or it is stolen?

If you realize your card is missing or stolen, contact the customer service phone number on your credit card bill immediately. Your credit card company will cancel your current account and issue new cards with a new account number. Your balance from your current account will transfer to the new account.

What are the difference between a Credit Card and a Debit Card?

It is important to understand the difference between a credit and debit card. When you present your card to a clerk at a store, that clerk will normally ask you if your card is a credit or debit card. According to educational financial resource (EdFund) a credit card offers spending based on a revolving line of credit that is not tied to any source of income. A debit card is tied to your bank account and the amount you can spend with a debit card is contingent on how much money you have available in the bank.

Can my bank charge my account fees?

Yes! Banks are first and foremost businesses. They can charge your account with minimum balance fees, overdraft fees, ATM fees and more!

To refrain from these charges simply ask your bank if there are student accounts available. With a student account there are more privileges for you such as a no fee checking account and student rewards.