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  • Manage credit

    Understanding Credit
    History of Credit Cards and Scores The numbers behind credit cards What hurts credit scores History of credit cards Credit dispute process
    Credit Basics

    To understand the basics of credit, check out our Credit Basics Brochure.

    Credit Scores

     A credit score is a number between 300 and 850 that ranks how risky of a borrower you are. The score is published by the Fair Issac Corporation (thus credit scores are also called FICO scores), and includes a number of factors about how you borrow money

    Credit Summary

    Payment history

    is determined by whether you pay your bills on time or not. 

    Amount owed 

     is based on how much you are currently borrowing and how much you're allowed to borrow.

    Length of credit history

    is how long you have been using credit, whether it's in the form student loans or just using a card for small items.

    New credit 

    is determined by the lines of credit you have opened recently (a lot is bad.)

    Types of credit

    is determined by how many and the types of credit you have, including credit cards, student loans, auto loans, etc.

    Who looks at my Credit Score?

    • Landlords
    • Employers
    • Utilities (Cell phones, electricity, etc.)
    • Insurance companies use your credit score to help them decide whether to approve you, and what terms and rates you qualify for.
    • Financial Institutions distribute interest rates based on your credit score
    • Looking

    Building Your Credit Score

    To qualify for a credit card, you need a credit history, unfortunately to build a history, you need a credit card. Luckily there are two ways around this:

    Secured credit cards

    • A secured credit card makes you a zero-risk lender. You make an initial deposit, usually equal to your line of credit (if you want to borrow $200, you have to post $200), and borrow against it to build up your score. When you close your account, you'll get your deposit back.

    Co-sigend credit cards

    • If a parent or other trusted person with an established credit history (NOT your roommate) signs the credit card with you, you can borrow against your co-signer's (hopefully high) credit score. This lets you build your own. Keep in mind that your missed payments and debts will affect their credit score, so don't abuse their trust.

    Maintaining Your Credit Score

    1. Make your payments!

    • It's the simplest and strongest way to show that your a reliable borrower and aren't likely to default.

    2. Keep your credit card debt low.

    • Grow your credit

      It's okay (even encouraged) to charge purchases to your card, but if you're constantly maxing them out, it looks suspicious to lenders. The ideal is to utilize around 30% of what you can borrow(also known as credit utilization). Keep in mind that this includes credit card purchases that you made this month and plan to pay off, they won't earn interest but they are part of your debt.

    3. Don't open too many lines of credit.

    • Sudden increases in lines of credit can make lenders wary and it becomes much harder to manage purchases and loans from multiple sources.

    4. Diversify your credit.

    • Not to be confused with having a lot of credit, having credit for different things like student loans, a mortgage, and a credit card will create a stronger credit score than three credit cards.

    5. Don't take out cash advances.

    • Cash advances tell creditors that you are short on money and may not be able to make your payments and may even default.

    Checking Your Credit Score

    You have 3 credit scores that are reported to FICO from the three companies Equifax, Experian, and Transunion.

    Recent legislation has given you the consumer the right to check your score once a year from each company. You have the choice to look at all three scores at once, or you can stagger them every 4 months so you have a more consistent idea of your report.

    The best way to check your report is to go through It is the only site that gives you the chance to see your reports for free. Many other sites claim to let you view it but often actually require signing up for a membership. Many credit cards will give you your score for free. While they usually not an exact measure of your score, they are typically pretty accurate.

    Once you have chosen to view a report you should look it over and make sure that there are no errors or problems on your report.

    If you want to see your actual score each site requires you to sign up for a membership and then you will be allowed to see the score. Be careful though, if you forget about signing up for the membership the trial period quickly ends and you are then forced to pay the monthly fee and will be charged even if you aren't checking your score.

    You may find discrepancies on your report. These errors can cost you jobs, loans, and housing opportunities, so it is best to get them taken care of immediately.
    When you find an error you should first contact the company through whom the error is listed and try to get the incident resolved.

    Always keep good records of any communications with the companies.Remember to make copies of documents that are exchanged through the process of fixing the errors. Always request written documents when the incident is cleared and hold on to these in case they find their way back on to your report.

    Credit Bureaus Contact Info:

    P.O. Box 4500
    Allen, TX 75013
    (888) 397-3742

    P.O. BOX 740256
    ATLANTA,GA 30348
    (800) 685-1111

    TransUnion, LLC
    P.O. Box 2000
    Chester, PA 19022
    (800) 888-4213

    Interest Rate on Credit 

    Unlike interest on your savings account, interest on your credit costs you money. Your interest rate is a fee stated as a percentage of your outstanding balance that your credit company will charge you if you don't pay your credit card bill in full at the end of each billing cycle. Additional fees will be added if you continue to leave credit card bills unpaid. So pay your bills! Many banks have an online system where you can schedule payments directly out of a checking account so even if you don't remember, the bill is automatically paid. Be careful to keep track of all payments and record them if you choose to use this system. Forgetting to record paid bills can result in over drafting an account or spending money you do not have. 

    Terms to Know 

    Credit cards


    Credit limit or line of credit

    Your credit limit is the maximum amount of money that the credit card company will let you borrow.

    Finance Charge

    Finance charges include interest and any other fees you might have to pay for the use of credit. Some credit cards require you to pay flat fees in addition to interest. Before you take out a card, make sure you know what all the charges are.
    In an open 30-day credit agreement, you promise to pay the full balance owed each month. A popular credit card that has a 30-day credit agreement is an American Express. These are also known as charge cards.

    Credit agreement

    This is a contract between you and your credit card company, it includes all the terms, conditions, and finance charges associated with your credit card. Card issuers update these agreements frequently, and you can either accept the new terms or cancel the card. To avoid being taken advantage of, read credit agreements carefully and compare them to offers by known lenders, such as your bank or credit union.

    Annual Percentage Rate (APR)

    An annual percentage rate is the cost of your credit stated as a yearly percentage rate. The APR is noted on your bill every month and is either fixed or variable. A fixed percentage rate (despite the name) may be subject to change without notice and could be lowered or raised.

    Grace Periods

    These allow you to avoid interest charges by paying your current balance in full before the due date. Make sure the credit card you choose allows a grace period.

    Annual fees

    These fees can range from $15 to $25 (sometimes much more) and you must pay whether or not you actually use the card so shop around to find cards without these fees.

    Late Fees

    Most credit card issuers impose late fees when you make your monthly payment late. These late fees are bad enough, but the fine print may say that since you've been late, the issuer can raise your interest rate and revoke any special rates you have in effect, such as balance-transfer rates. Read the card agreement to learn how these fees will affect your interest rate.

    Over-the-limit fees

    The penalty fee for taking out more credit than you've been offered and will be added to any other fees and interest you've already incurred.
    Most credit card companies offer you the option of cash advance: the ability to use your credit card to withdraw cash from an ATM. In general, you never want to take out a cash advance. Cash advances have fees, and interest charges starting immediately at the time of the withdrawal. This can cost you high interest rates and can easily make your credit balance unmanageable.

    Credit Agreements

    Revolving credit agreement

    In a revolving credit agreement, you have the option each month of repaying in full or making payments of a stated amount. The minimum payment is based on the amount of balance that is due. Most credit cards such as Visa, MasterCard and Discover are revolving credit agreements. Retail store cards and gas credit cards may also have revolving agreements.