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Protect your Credit

Good credit is valuable. Having the ability to borrow funds allows us to buy things we would otherwise have to save for years to afford: homes, cars, a college education. Credit is an important financial tool, but it can also be dangerous, leading people into debt far beyond their ability to repay. That is why learning how to use credit wisely is one of the most valuable financial skills anyone can learn. Begin by opening individual savings and checking accounts in your name.

How to establish a credit: Establishing a credit can be accomplished through several avenues. First open an individual savings and chequing accounts in your name. Over time, your deposits, withdrawals, and transfers will demonstrate that you can handle money responsibly. Loans are also a good way of establishing credit, however be careful of the interest. Before you sign on the dotted line for any loan, do your homework. Department stores credit cards and gas cards are easier to obtain than major credit cards and are effective in establishing credit. Lastly, when establishing credit, be patient, it takes time and consistency to establish a good credit. Make all of your bill payments on time and pay off your debts.

Once you have established a credit your goal should be to protect it. Protecting our credit should be paramount. Be very careful with your credit, debit and ATM cards as well as your account and personal identification numbers (PIN). Immediately report lost or stolen credit cards to the companies that issued your cards. If your notification is received before the cards are used, you have no legal responsibility for the bills; if it is received after the cards are used, your legal responsibility is $50 for each card. Be cautious about giving anyone your account numbers, especially over the telephone when someone calls you. Save sales receipts to compare with your bill, and when you discard documents with account numbers on them, be certain that the numbers can't be read. In addition, periodically check your credit using services such as Equifax. Checking your credit will allow you to see if there has been identity theft. However, be modest with checking your credit as checking your credit frequently will go against your credit score.

If you disagree with an item on a bill, you are responsible for notifying the creditor in writing within 60 days of receiving the bill. You should include your name, account number, the item you believe is in error, and the reasons why.

Referneces:

http://www.frbsf.org/publications/consumer/credit.html

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