Things you should know about Credit.

The Federal Trade Commission (FTC) is the federal agency that has the task of consumer Protection. It works against fraud, deception and unfair business practices in the marketplace. It provides information to consumers to make sure they do not become victims of fraud and deception. Consumers can contact the FTC for free information on a wide range of issues, including: Advertising claims Vehicle buying or leasing Credit queries Debt collection Employment Identity theft and fraud Investment schemes and financial products Online shopping Scholarship scams Lotteries Taking on credit is a big financial responsibility. The decisions you make now about how you manage your finances and borrow money will affect you in the future—for better or worse. Consumer reporting companies keep track of whether you pay your debts and if you make payments on time? Then these companies make this information available in the form of a credit report and score. It is very important that you maintain a good report and score by keeping on time with your payments and not over extending yourself. Credit is more than just a plastic card you use to buy things—it is your financial trustworthiness. Good credit means that your history of payments, employment and salary make you a good candidate for a loan, and creditors—those who lend money or services—will be more willing to work with you. Having good credit usually translates into lower payments and more ease in borrowing money. Bad credit, however, can be a big problem. It usually results from making payments late or borrowing too much money, and it means that you might have trouble getting a car loan, a credit card, a place to live and, sometimes, a job. Your Credit
 Most creditors use credit scoring to evaluate your credit record. This involves using your credit application and report to get information about you, such as your annual income, outstanding debt, bill-paying history, and the number and types of accounts you have and how long you have had them. Potential lenders use your credit score to help predict whether you are a good risk to repay a loan and make payments on time. Many people just starting out have no credit history and may find it tough to get a loan or credit card, but establishing a good credit history is not as difficult as it seems. 1. You might apply for a credit card issued by a local store, because local businesses are more willing to extend credit to someone with no credit history. Once you establish a pattern of making your payments on time, major credit card issuers might be more willing to extend credit to you. 2. You might apply for a secured credit card. Basically, this card requires you to put up the money first and then lets you borrow 50 to 100 percent of your account balance. You might ask other people who have an established credit history to co-sign on an account. By co-signing, the person is agreeing to pay back the loan if you don’t. Do the math Keep in mind that credit card interest rates and minimum monthly payments affect how long it will take to pay off your debt and how much you'll pay for your purchase over time. Suppose when you’re 22, you charge $1,000 worth of clothes and CDs on a credit card with a 19 percent interest rate. If you pay $20 every month, you’ll be over 30 by the time you pay off the debt. You’ll have paid an extra $1,000 in interest. And that’s if you never charge anything else on that card! Keep your record clean Good credit is important, now and in the future. In most cases, it takes seven years for accurate, negative information to be deleted from a credit report. Bankruptcy information takes even longer to be deleted—10 years. Know What Creditors Look for on Credit Reports
 Understanding what types of information most creditors evaluate is important. Your credit report is a key part of your credit score, but it is not the only factor. You get points for other things like: Your bill paying record Your outstanding credit Whether you are late in making repayments How long you’ve held your accounts for Are you close to your limits Have you defaulted on loans? Your Right to Free Credit Reports You have a right to your credit report. Under the Fair Credit Reporting Act (FCRA), each of the nationwide consumer credit reporting agencies, that is Equifax, Experian and TransUnion, is required to provide you with a free copy of your credit report once every twelve months, at your request. A free brochure has been prepared by the Federal Trade Commission Your Access to Free Credit Reports. This brochure explains your rights under the FCRA and tells you how to request your free annual credit report. The information contained in your credit report includes your address, how you pay your bills and whether or not you’ve been sued, arrested or made bankrupt. This information is generally sold by the nationwide consumer reporting companies to banks, insurance companies and employers who will use it to evaluate applications for credit, insurance, employment or home rental. How to order your free report Online, you can order your free report and annualcreditreport.com. You can also order by phone by calling 1-877-322-8228. To order by mail, complete the Annual Credit Report Request Form and send it to: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281. Include with your request your name, address, social security number and date of birth. You may also need to provide some personal information to verify your identity.

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