Credit is valuable. The importance of how much credit you have and how you use it goes far beyond shopping. Whether you have good or poor credit can affect where you live and even where you work, because your credit record may be considered by prospective employers. It is important to understand how credit is…
DetailsThe short answer is: buy items on credit, pay for those items on time, and repeat this process for an extended period of time with various lenders in order to establish a credit history. A credit rating is intended to measure your ability to repay a debt. Lenders look at your past record of paying…
DetailsThe major federal laws that regulate credit are the Fair Credit Reporting Act[1], Equal Credit Opportunity Act[2], Fair Credit Billing Act[3], and Fair Debt Collection Practices Act[4]. The Fair Credit Reporting Act promotes the accuracy, fairness, and privacy of information in the files of consumer reporting agencies. It also controls the use of credit…
DetailsIt depends on the seriousness of the past problems and the accuracy of the consumer report. If you believe there is inaccurate information on your credit report, you must follow the proper procedures to dispute the errors in accordance with the Fair Credit Billing Act. If the negative information is accurate, the Fair Credit Reporting…
DetailsCollateral is anything of value that can be taken by the lender if you do not pay back the loan. Loans that are granted based upon collateral are called “secured loans” (i.e., a home mortgage or car note). The lender wants to identify property owned by the borrower which has a value at least equal…
DetailsNo. It is unlawful for any creditor to discriminate against any applicant on the basis of sex or marital status[1]. Lenders may only make decisions based on the borrower’s ability and intent to repay the loan. A married person who does not have an outside job might have problems obtaining a loan unless that person…
DetailsYes, in some important ways. Generally, student loans CANNOT be discharged in bankruptcy, unlike most other forms of credit, with some exceptions in disability. Therefore, you should be particularly careful when taking out student loans, whether they are from the federal government or from private banks. If your student loans are federally provided, various payment…
DetailsFirst, protect your sensitive personal information as much as possible. Also, regularly obtain your credit report and check it for any accounts you did not open. You can obtain your free credit report every twelve months at: https://www.annualcreditreport.com/. You can also purchase credit monitoring or “freeze” your credit through various services but make sure you…
DetailsIdentity theft occurs when someone steals your sensitive personal information, such as your name and social security number and uses this information to commit fraud. This may include opening a credit card or filing tax returns in your name. Identity theft can greatly damage your credit status because the thief is not going to pay…
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