Credit and Debt
What it is
Section titled “What it is”What a credit score is, how to build one safely, and how debt grows.
Why it helps you
Section titled “Why it helps you”Good credit helps you rent a home and avoid being charged more. Knowing how debt grows keeps you out of deep holes.
Good to have first
Section titled “Good to have first”A Bank Account.
This opens up
Section titled “This opens up”Renting a Home, big purchases later.
Where to get help
Section titled “Where to get help”See your credit report
Section titled “See your credit report”AnnualCreditReport.com The only official website for free credit reports. A credit report is a record of loans, cards, and bills in your name. Three companies keep these reports: Equifax, Experian, and TransUnion.
- Cost: Free. You can check each report once a week.
- Who can use it: Anyone with an SSN or ITIN
- How to start: Go to the website, or call 1-877-322-8228. Ask for your reports from all three companies.
- Good to know: Checking your own report does not hurt your credit. You’ll answer questions to prove who you are, like past addresses. If you have no credit yet, you may have no report. That’s normal.
If someone used your name or number
Section titled “If someone used your name or number”This happens more than people think, sometimes even by a parent. You did not cause it, and you can fix it.
Credit freeze (all three companies) A freeze locks your credit report. No one can open new credit in your name while it’s locked. You can lift it for a short time when you want to apply for something yourself.
- Cost: Free. A freeze does not hurt your credit score.
- Who can use it: Anyone
- How to start: Contact each company. You need to freeze all three.
- Good to know: Each company will ask you to prove who you are. Online, you’ll make an account and a password. Keep the login somewhere safe.
IdentityTheft.gov The Federal Trade Commission’s (FTC) site for reporting identity theft. You tell it what happened. It makes you a step-by-step recovery plan, with letters already filled in to send to companies.
- Cost: Free
- Who can use it: Anyone whose information was misused
- How to start: Go to the website and choose what happened. Or call 1-877-438-4338. Press 3 to report in another language.
- Good to know: If the person was a family member, you get to choose your next steps. See Watch out for below.
Fix an error on your credit report (CFPB) The Consumer Financial Protection Bureau (CFPB) is a government agency. This guide shows how to dispute (challenge) something wrong on your report. It has sample letters.
- Cost: Free
- Who can use it: Anyone
- How to start: First write to the credit company that shows the error. Then write to the company that reported it, like a bank or card company.
- Good to know: Send copies of papers that back you up, not originals. Certified mail gives you proof that you sent it.
Talk to a nonprofit credit counselor
Section titled “Talk to a nonprofit credit counselor”National Foundation for Credit Counseling (NFCC) A national network of nonprofit credit counselors. They can look at your debts with you and explain your choices.
- Cost: The first talk is free. A debt repayment plan has a fee. Ask about it before you agree.
- Who can use it: Anyone in the U.S.
- How to start: Call 1-800-388-2227.
- Good to know: If anyone pushes you to stop paying your bills, the FTC calls that a warning sign.
Financial Counseling Association of America (FCAA) A nonprofit association of credit counseling agencies across all 50 states. Fill out a short form and a member agency will contact you.
- Cost: The first talk is free. Some services have fees.
- Who can use it: Anyone in the U.S.
- How to start: Use “Find a Credit Counselor” on the website, or call 1-800-450-1794.
- Good to know: You’ll give your state, ZIP code, and how to reach you.
If a company treats you unfairly
Section titled “If a company treats you unfairly”CFPB complaint You can complain about a bank, credit card, credit report, debt collector, or loan. The CFPB sends your complaint to the company. The company is asked to respond, most within 15 days.
- Cost: Free
- Who can use it: Anyone
- How to start: File online, or call 1-855-411-2372, Monday to Friday, 9 a.m. to 6 p.m. Eastern Time.
- Good to know: For a credit report error, dispute it with the credit company first. Then you can complain if it isn’t fixed.
If you only do one thing first
Section titled “If you only do one thing first”Get your free credit reports from AnnualCreditReport.com. You’ll learn if your record is a clean, empty slate, or if someone has opened accounts in your name. Either way, you’ll know where you stand.
Watch out for
Section titled “Watch out for”- Credit repair companies that want money first. No one can legally remove true, recent information from your report. You can fix real errors yourself, for free.
- Debt relief that asks for fees up front. The FTC says only scammers charge before they settle any of your debts. Be careful if anyone tells you to stop talking to the companies you owe.
- “New credit identity” offers. Anyone who sells you a “CPN” or new number to hide bad credit is setting you up for fraud.
- Paying only the minimum on a card. Interest keeps growing on what’s left. If you use a card, try to pay the full balance each month.
- Surprise calls offering to lower your rates. Hang up. Call the number on the back of your card if you have questions.
- Hard choices when it’s family. Some fixes involve a police report or naming the person. That can feel scary or unsafe. You can freeze your credit first, which needs no report. Then talk with a legal aid office or advocate before your next step.