What You
Need To Know About Credit
Are you a good credit
risk? Credit is a great convenience when used responsibly. Credit can
help you acquire a new suit to wear on job interviews in Milwaukee or
a wardrobe needed for a new position or promotion in Wausau. Credit
can enable you to buy needed tools for your Wisconsin home business
and add convenience when vacationing in the North Woods. But often,
people forget that credit is a privilege, not an inalienable right.
What Creditors
Look For
- Assets they can
use in the event you are unable to repay the debt
- Factors affecting
your ability to pay, such as job stability and income
- How much you
owe and if you have made payments in a timely manner
Some people equate
more credit with more money. This is not the case. Credit simply allows
you to enjoy something today and pay for it tomorrow.
How to Establish
a Credit History
- Establish a checking
and savings account
- Open a charge
account with a department store and make prompt payments
- Apply for a gasoline
credit card
- Find a co-signer
There are several
factors that will affect your ability to obtain credit:
- Late payments
- Too many credit
cards
- Paying less than
the minimum payment
- Having your overdue
account referred to a collection agency
- Declaring bankruptcy
If you look in your
mailbox or read your e-mail, it would appear there is no shortage of
credit. But beware! It's often better to destroy the credit offers received
in the mail so that no one else will pick up the application and apply
for a card in your name. If you receive offers via the Internet, simply
press the delete button without ever opening the message.
Creditors usually
base their decisions on your credit worthiness by looking at your credit
report, which records your loans and credit cards and your payment history.
Credit reports also contain public record information such as bankruptcy,
overdue property taxes and child support and the names of everyone who
has recently requested a copy of your report.
The Community Bankers
of Wisconsin suggests you check your credit report once a year to make
sure it is correct. It is also wise to check your report to safeguard
against fraud in case someone is using your personal information to
set up false accounts.
How Do I Get A Copy Of My Report?
There are three major credit bureaus:
If you are turned
down for credit because of your credit report, you will receive an "adverse
action" notice from the creditor. You are then entitled to a free
copy of your credit report. Otherwise, there is a modest fee for your
report.
Should you discover
incorrect information on your credit report, contact the credit bureau
immediately. Federal law prohibits inaccurate or obsolete information
from being reported in your credit file.
Remember, good credit
is a valuable commodity that allows you the convenience of enjoying
something now and paying for it later. However, if misused, credit can
be disastrous to your financial health.
Your Wisconsin community
banker can provide additional information on credit. You also can find
a variety of resources-including articles on getting credit, protecting
yourself from credit fraud and information on the Wisconsin Consumer
Act-at the Wisconsin Department of Financial Institutions web site:
http://www.wdfi.org/.
Provided
as a public service by the Community Bankers of Wisconsin (CBW).
