Use the Web to Take Charge of Your Credit
We use credit to make many substantial business deals, such as buying a home or car, or obtaining a loan. Other times, we simply want to use a credit card to make our daily lives a little easier. Whether you want to learn how to select the right credit card, protect yourself from identity theft, or learn how your credit score affects the loans you receive, the Web can serve as your guide to understanding, establishing, and maintaining good credit. For a Spanish-language version of the Guide, click here
The credit card industry mailed more than six billion credit card offers to households during 2005. Before you start frantically filling out the applications you've received and envisioning all the purchases you'd like to make, you should understand a few things about credit. The Web sites we've selected below will teach you the basics of credit, how it works, and how to use it wisely.
- Credit is more than just a plastic card in your wallet. It also reflects your status with lenders who decide whether to grant you a loan.
- Watching your spending is part of using credit wisely to ensure you can make your credit card or loan payments on time every month. An online spreadsheet program such as Google Docs & Spreadsheets or Zoho Sheet can help you track expenses and income. Another way to keep track of your payments easily is to do your banking online. Check out the findingDulcinea Personal Finance Guide for advice and recommended sites that can help you do that.
- Some decisions are too important to make entirely on your own. The Web sites in this section can give you a solid foundation of financial knowledge, but you should still consider consulting with an experienced professional when dealing with personal money matters.
For an overview of credit ...
defines credit, provides some facts about credit, and offers a quiz that helps you test your "credit IQ." Links to other credit information are also listed at the bottom of the article.
To learn how to use credit wisely ...
The Federal Trade Commission's Bureau of Consumer Protection
teaches consumers how to obtain credit and use it wisely. This site also provides consumer alerts about credit scams and deception, as well as information about prescreened offers of credit and insurance, which can be found at the bottom of the page.
Your credit score can have an impact on many aspects of your financial life, perhaps none more directly than your ability to secure a mortgage or other type of loan. Use the helpful Web sites we recommend here to learn what your credit score is and the best ways to protect it so that you can obtain the credit or loan you need at an interest rate you can live with.
- According to the Fair Credit Reporting Act, you are entitled to receive a free annual credit report from each of the nationwide consumer credit reporting companies, which can be requested online: Experian, Equifax, and TransUnion. Also, read this article from the Federal Trade Commission, which discusses "imposter" Web sites.
- Most credit information is reported to all three agencies, so your credit report (and score) may differ slightly from one agency to another. For this reason, it's worthwhile to request all three reports. Though yearly reports are free, the consumer credit reporting companies charge you for daily monitoring of your credit reports and other services.
- Managing your debt is one way to improve your credit rating. Take a look at the "How can I manage or get out of debt?" section of our findingDulcinea Debt Guide for Web sites that teach additional debt management skills.
To learn what a credit score is ...
explains what a credit score is and how it works. Follow the links in this article to learn about credit reports, as well as the FICO credit scoring method.
To learn about the effects of good and bad credit scores ...
presents "Your Money Counts," a tool that aims to help readers boost their financial knowledge. Click the "Credit" tab to learn how your credit score can influence a lender's view of you. This site also details how your credit history can affect you years from now.
The Digerati Life
has a blog entry about how credit scores affect your loan rates, along with other money and personal finance issues. Although the author confesses to be inexperienced with loans, this entry addresses many basic aspects of borrowing money, such as how much a purchased item truly costs after you factor in interests.
To obtain a personal credit report ...
sponsored by Experian, Equifax, and TransUnion, was created to serve as a centralized source for requesting a credit report from these three nationwide consumer credit reporting companies. For more information about your credit report or direction to other credit-related Web sites, use the FAQ link.
also provides a free credit report and score when you enroll in its Triple Advantage program. The program has a free 30-day trial period that leads to a monthly $12.95 fee if you don't cancel the service before the trial expires.
Equifax Personal Solutions
gives online access to your three nationwide credit reports for $12.95 per month. The report monitoring notifies you of key changes within 24 hours. Use the "Get Started" link on the homepage to sign up for a credit-monitoring service and view your reports.
offers a 30-day free trial of its service, which includes your credit reports and scores. After the trial run, TransUnion charges a fee of $9.95 per month. Consumers can also access information about credit report disclosures and learn what to do if they are victims of fraud.
To improve your credit rating ...
was created by the U.S. government to teach financial management skills. Click the "Credit" link for a series of articles addressing various aspects of credit, such as improving your credit rating
and how credit can factor into a divorce
. Privacy, fraud and scams; budgeting; and financial planning are also discussed at this site. Search the left-side menu for more information.
has a "Credit Score Compass" to guide you in estimating your credit score by answering a few generic questions about your finances and debt. The "Credit Cards" tab contains information about how credit card companies stay in business, credit card catches, and the dangers of applying for store credit cards. You'll also find articles about improving your credit score, reducing your debt, and refinancing.
There are credit cards to suit a unique array of personal needs. Flight miles, cash-back rewards, discounts on certain purchases, and low interest rates are just some of the perks you'll find. There are several factors to consider when you're selecting a credit card, and some helpful Web sites can guide you in choosing the card that will be the best fit.
- Many credit card companies help you sort through the benefits of their various credit cards. Try to find a comparison feature on a lender's site that allows you to compare offers next to each other rather than going back and forth between pages.
- Many major banks offer credit cards, and you will find information about the available cards at the bank's Web site. Other organizations, such as the American Kennel Club and the Aircraft Owners and Pilots Association, offer branded credit cards through major banks; your use of these cards benefits the organization financially. If you are a member of these organizations or others, you might want to check their Web sites to see if they offer such credit cards.
- If you have poor or no credit, you might still find a card to suit your needs. The Web sites of major credit card companies generally have sections dedicated to consumers who fall into this category.
For general advice about choosing a credit card ...
The Federal Reserve Board
provides a list of helpful considerations to review when you are preparing to apply for a credit card, along with basic credit terminology. This site also has recommendations for handling credit card billing errors and complaints against credit card companies.
Credit Card Sanity
has an article called "How to Use Credit Cards Sanely" that teaches you how to apply for credit cards, shop for the best interest rate, eliminate credit card debt, and more. This site is also updated with current credit card news.
To find the best interest rates ...
helps you find the best interest rates on credit cards and contains a "Basics" section that address topics such as finding the best reward cards, avoiding penalties, and finding the best credit cards for teenagers. Some specific questions about credit scores, credit accounts, and missed payments are also answered under "Q&A."
For help comparing credit cards ...
mentioned throughout this guide, compares credit cards by type and by issuer. And if you've ever wanted to know something more specific about credit cards, such as why they aren't accepted at all stores, read the credit card blog
Credit Card Menu
is another online credit card comparison tool. In addition to comparing U.S. cards, it also features cards from the United Kingdom. Click the "discuss" icon for quick access to message boards about credit and credit cards.
If you're even asking this question, the answer is probably yes. In fact, because credit card debt typically carries the highest interest of any form of debt, any at all can be too much. If you find yourself struggling with credit card debt, the Web can be a good source of ideas to start correcting the problem.
- Your credit rating can affect your finances for years to come. Despite the good advice you can find on the Web about reducing or consolidating your credit card debt, you should always speak with a qualified accountant or other financial professional to begin your debt reduction.
- Some debts, such as those with higher interest rates, are better to pay off before others. MSN Money can help you sort out which debts to pay off first in this article. Sometimes lowering your credit card's interest rate can be as easy as asking. Credit card companies often grant such requests, especially to customers who usually pay their bills on time.
To learn how to avoid credit card debt ...
(the federation of state Public Interest Research Groups) has an article on "The Truth About Credit" that discusses how consumers can avoid getting into excessive credit card debt in the first place. Also read the "Deflate Your Rate
" article, which explains how you can lower your credit card's APR.
explains how to avoid excessive credit card debt during the holiday season in this article.
For debt and credit counseling information ...
The National Foundation for Credit Counseling
is an association of consumer credit counseling agencies that contains information about getting a financial counselor, finding an agency near you, and other options for getting out of debt. It also has information about education opportunities concerning good financial planning.
The Federal Trade Commission
(FTC) teaches that there are several important things you should consider before choosing a credit counselor and provides a list of questions to ask a prospective counselor. The site explains Debt Management Plans (DMPs) and suggests ways to make them work for you, and reveals the truth behind Debt Negotiation Programs.
Consolidated Credit Counseling Services, Inc.
discusses debt and whether you should consider consolidating your debt. Learn about debt management and its benefits, and other money management concepts such as bankruptcy and budgeting.
Approximately 83 percent of undergraduate college students possessed at least one credit card in 2001, according to student loan service company Nellie Mae. With credit card use spreading among young people, the importance of understanding credit and its effects on finances is paramount. The Web has helpful information for young adults who need to establish and maintain good credit, and for parents on how to get their children started using credit responsibly.
- Many credit card companies offer free t-shirts or music downloads as incentives to apply for their credit cards. However, high interest rates or hidden fees that come with some cards are a poor exchange for the "freebies" you may find appealing. Instead of signing up based on impulse and enticement, use College Plastic, described below, and the sites in the "Choosing the Right Credit Card" section of this guide to make informed decisions on which cards to choose.
- This article from MSN Money offers advice for parents who want to teach their teenagers how to use credit cards.
For help deciding whether your child should have a credit card ...
The College Board
takes a less extreme (but still cautious) stance in this article. It explains that, although credit cards can be handy in the event of an emergency, there are some potential financial dangers college students should guard against.
Family First Aid
offers Troubled Teen Help, written by parents about a variety of problems you might be having with your child. The "Teen Responsibility" section has advice to help you decide whether you should allow your teen or college student to have a credit card and offers tips to prevent overspending.
For college students ...
helps college students find credit cards with good rewards and low interest rates. Use this site to learn about specific terminology related to credit or read articles about credit.
is a subsidiary of the huge student loan company SLM Corporation, or Sallie Mae. Click the "Your financial success" tab to learn how to use credit cards and how to protect yourself from identity theft. For information about student loans, select the category that matches you (undergraduate student, graduate student, or parents & sponsors). From there, you can review and apply for a federal or Nellie Mae student loan.
You Can Deal With It
is a tool from American Education Services. This site teaches college students and recent grads about effective management of financial responsibilities, including loan payments and budgeting. Resources are also provided to help parents and financial aid administrators offer advice to their students.
For teenagers ...
explains the things teenagers should know about credit cards, such as interest rates, payment schedules, and the dangers of making only the minimum payments on a card. This article also teaches parents how to progressively help their children learn money management, starting with opening a checking account for their child, then allowing use of a debit card and, finally, a credit card.
Kids and Money
from CBS News, suggests that parents need to help their children develop a "concrete" concept of money. Because of online banking, debit, and credit cards, it could be easy for teens to forget that they are actually dealing with real money when all they might see is plastic.
With so many people using credit cards, credit card fraud has become a lucrative "business." The Web can give you some helpful tips for protecting your identity.
- Checking your credit report regularly online can help you detect fraud or identity theft and. You don't have to wait until you receive next month's bill to make sure all your charges are legitimate.
- When shopping online, avoid making any credit card purchases while using a wireless Internet connection unless you're sure that the connection is secure. For more tips on protecting yourself against fraud and identity theft online, read the findingDulcinea Internet Security Guide.
To learn about credit card fraud ...
explains how to determine which Web sites are safe to provide your credit card numbers to and which may be questionable if you are looking to make an online purchase.
Credit Card Loss Protection
discusses your rights in the event your card is stolen and provides some tips to help you detect imposters who may claim to be from your credit card company.
For identity theft information ...
The Federal Trade Commission
(FTC) presents "Deter, Detect, Defend," an identity theft resource. This site teaches consumers how to avoid, detect, and recover from identity theft. Businesses and law enforcement officials can learn how to help victims of identity theft, prevent its occurrence, and investigate instances of identity theft.
The U.S. Department of Justice
has an "Identity Theft" section that is similar in many ways to the FTC Web site, in that it explains what identity theft and fraud are, the most common ways these acts are committed, and what you should do if you are a victim of this type of activity. This site is unique in that it also details popular types of internet fraud
, which include credit card schemes.
If interest rates are starting to look too intimidating, it might be time to consider a credit union, where members pool their money and loan it to each other at relatively low rates. The sites we've selected can teach you more about credit unions and help you find one in your area.
- If you want to verify the security of a credit union, you can either check its "Safe & Sound" ratings at Bankrate or request a financial memorandum or recent financial statements straight from the credit union.
- To answer more specific questions you may have about credit unions, search for a "Consumer" page on the Web sites we've listed below.
To learn about credit unions ...
America's Credit Unions
explains the history and philosophy behind credit unions and teaches you how to join a credit union
. The "Financial Calculators" section can help you determine how much money you qualify to borrow and how you can save money in your financing maneuvers.
Current Issues in Credit Unions
is a podcast about credit unions and the current challenges they face. Lawyers who work with credit unions host the podcasts.
To find a credit union ...
Credit Unions Online
is a directory of credit union Web sites. Choose your state on the map to find credit unions in your area. Searches are also available for credit unions in Canada and Australia: use the "Quick Links" in the upper right corner of the page to search outside the United States.
Home equity lines of credit have much lower interest rates than credit cards and are more flexible than traditional home equity loans. However, they're not a good solution for everyone. If you're searching for additional credit, use the Web to learn if a home equity line of credit could meet your needs.
- As with any credit obligation, home equity lines of credit carry significant responsibility. You could lose your home if you don't repay the money you've borrowed, along with the interest included.
- Before applying for any home equity loan (also abbreviated as "HELOC") or line of credit through an online lender, make sure to check its credibility through an organization that oversees fair lending practices. We've included links to a few below.
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