.svg){kind=spacer}
Credit is your ability to borrow money NOW and pay for it LATER (with interest).
There are many examples of credit:
How is your credit score calculated?
The credit agency reports a variety of items to the credit bureaus such as:
- Payment status (on time or late)
- Total credit usage
- New attempts to open credit accounts
Each agency creates a credit report that has a history of your credit from your creditors. This list should have:
- Accounts that are open in your name
- Total debt history of payments
Each agency assigns a “FICO” score
In recent years, there has also been a Vanguard Score, which aims to take into account scores from all 3 of the credit bureaus.
Why are credit scores important?
Not all “credit” makes it to your credit report.
Watch out for credit scams!
Because credit has such a big affect on our lives, there are many services that advertise “Credit Repair” or something similar. Some are coaches who can help, but many are scams. Remember, you can fix your credit yourself - and there are ample resources to help you do so!
Worried about a financial service being a scam? Learn how to tell if a credit check or credit counselor is a scam here.
What are your rights?
Click the drop-downs below to learn more about your rights when it comes to credit.
View a printable version of your “Credit Bill of Rights” here.
- You have the right to receive a free copy of your credit report from each of the three major nationwide credit reporting agencies (Equifax, Experian, and TransUnion) annually. Click Here to Find out how!
- You have the right to know what information is in your credit report.
- You have the right to dispute inaccurate or incomplete information in your credit report with the credit reporting company and the company that provided the information. These entities must investigate your dispute free of charge.
- If your credit is denied or unfavorable terms are offered based on information in your credit report, the creditor must inform you and provide the name, address, and phone number of the credit reporting agency.
- Negative information generally cannot be reported on your credit report for more than seven years, and bankruptcies cannot be reported for more than 10 years.
- You can place a fraud alert or security freeze on your credit report to help prevent identity theft.
- You cannot be discriminated against in credit decisions based on your race, sex, marital status, religion, national origin, age, or receipt of public assistance.
- You have the right to have reliable public assistance considered in the same manner as other income.
- If you are denied credit, you have a legal right to know why.
- In most cases, a consumer reporting agency may not report negative information that is more than seven years old, or bankruptcies that are more than 10 years old.
- You have the right to dispute billing errors on your credit card statement and credit report.
- The Fair Credit Billing Act (FCBA) allows you to dispute errors like unauthorized charges , incorrect amounts, or goods/services not delivered as agreed.
- Credit cards companies must investigate billing complaints within a specified time frame and provide cardholders with certain protections in billing disputes.
- You have the right to be free from abusive, unfair, or deceptive debt collection practices.
- Debt collectors cannot harass, threaten, or use profane language.
- They cannot call you before 8 a.m. or after 9 p.m. without your consent.
- You have the right to request proof of the debt and dispute it.
- Debt collectors cannot threaten to illegally harm you or your property or lie about the amount you owe.
- If your identity is stolen, you have the right to create an FTC Identity Theft Report and place fraud alerts or security freezes on your credit report.
- You can have fraudulent information removed or blocked from your credit report
- You have limited liability for fraudulent debts caused by identity thefts.
Add a credit goal to your money plan in MyMoneyPath.
Ready to add a smart goal around your credit to your Smart Goal list in MyMoneyPath?
Consider Creating a FREE Account!
