Protecting Your Credit

Two of the most important things you can do to maintain a good credit history is by protecting your credit rating and protecting your privacy.

How can you protect your credit rating?

You need to make careful decisions about how you use credit.

• Take your credit seriously and be responsible about how you use it.
• Separate your wants from your needs. Having credit can make it easy for you to spend above your means, so you need to set good spending habits.
• Compare your income to your expenses and set priorities, goals, and limits. Create a realistic budget and stick to it!
• Pay yourself first; put something in savings every month even if it’s only $10.  It’s a good habit to get into.
• Pay your bills, especially your mortgage, on time. Remember, paying on time means putting your payment in the mail 3 to 5 days before it is due.
• Get in a routine. Schedule time each month for paying your bills. Use your computer to set up online payments or automatic payments for recurring bills. Keep your bills organized and in one place so you know what is due when.
• Limit your number of credit cards and try to pay the balances in full every month. It is easy to treat credit cards like they are lay-away plans. Don't do it! It is an expensive way to pay for things.
• Check your credit reports regularly to make sure there are no mistakes on them.
• Know the warning signs of financial trouble and get credit counseling if you need it.

How can you protect your privacy?

Identity theft and credit fraud can damage your credit history.

• Ask "why" when you're asked for personal information. It's your right to know why it's needed and how it will be used. It is also your right to decide if you would like to provide personal information. Don't use common passwords, such as your mother's maiden name. This information is not difficult to find, and it can be used by an identity thief. The best passwords have both numbers and letters in them.
• Don't give out your Social Security or tax ID, PIN, bank account, driver's license, and credit card numbers unless you're absolutely sure how they'll be used. Most companies will allow you to create a password or phrase instead of providing your Social Security number.
• Be wary of e-mails from your bank or other organization you do business with asking for you to verify your password. Most banks do not send these types of e-mails, and it is likely the e-mail is a fraud. If you suspect the e-mail is fraudulent, forward it to the bank or organization in question so they can research the possible fraud.
• Never give out personal information over the phone to an unsolicited caller. If someone calls claiming to be from your bank, take down the information and call your bank’s 800 number instead.
• Sign your credit cards and debit cards immediately. If you lose them or they're stolen, anyone can sign and spend freely. In addition to your signature, add "Please Ask For ID" so your photo and signature can be verified.
• Report lost or stolen cards immediately.
• Take care when throwing away old bills or papers with private information. Shredding is your best option. Credit card offers and other financial offers should be thrown away with care, as well.