Financial Education

Building Your Credit History

Your credit is the key to success. Protect it.

Introduction to Credit

Do you want to purchase a house, car or maybe even pay for your children's college? Your credit history is the most important tool when you are ready to take these financial steps. When you use credit successfully, you will enjoy great financial advantages in the long run.

Benefits of Good Credit

  • Enjoy lower interest rates
  • Better financing options
  • Ease of opening credit when you need it


Your Credit Report

What is a credit report?

Your credit report is a summary of your financial activities and includes information about your credit accounts and/or loans, pending balances, and your payment history. This information is provided by the companies you have a financial relationship with. The information itself is organized and filed by the credit reporting agencies.

Who can access my report?

The information on your report is confidential and is only provided to other people or companies that have a legitimate reason to request this information, such as:

  • Companies where you have an account or have applied for credit
  • Employers where you have applied for work or for promotion/retention purposes
  • Insurance companies to open a policy or renew an existing policy
  • Federal agencies review your financial status to determine eligibility for federal benefits

Your Credit History

Make your payments on time

It is very easy to skip a payment. But skipping payments may lower your credit score dramatically.

Don't open multiple accounts too quickly

It is important that your history show reliability and stability. When you open too many accounts in a short period of time you risk overextending your ability to repay your debt.

Review your credit report regularly

Review your credit report at least once a year to ensure that all the information reported is correct.

Contact your creditors

If you are having trouble making a payment, call the creditor. More often than not, these companies have special programs that will help you during a difficult period and avoid negative reporting.

How to get credit

When you establish credit, you will have the ease of purchasing a product or service today and paying it in the future. To open credit and, more importantly, maintain a good credit history keep the following advice in mind:

  • Keep an open checking or savings account
  • To demonstrate stability avoid frequently changing your address or job
  • Make your payments on time
  • Keep accounts for basic services, such as the phone or electricity, in your name

To start building credit, consider applying for a store credit card or a secured credit card. This way you'll establish a small credit line and can begin building your credit.

Credit tools

Creating a budget helps you better organize your finances. This way you'll have better control of your income and expenses and will be able to plan reaching your financial goals.

Step# 1 - Calculate your income

Starting with the amount of your paycheck for the month, add all the sources of income that you recieve each month including rent, child or spousal support, pensions, or interest earned.

Step# 2 - Calculate your expenses

Write down all the expenses you have in a month. For example, rent or mortgage payments, household expenses such as groceries, basic services, transportation, insurance and most importantly how much you save. This is a way to start, remember that each family is different and expenses can vary from home to home.

Step# 3 - Reconcile

After gathering this information you will need to keep track of your real spending in order to compare to your budget. This way, you will be able to see the difference between what you think you spend and what you actually spend.

Types of Credit

Pay-as-you-go Accounts

Products and services are paid in one full payment, within a predetermined time frame, after the purchase of the product/service. These type of accounts do not typically generate interest fees. Examples include: Utilities such as electricity, water as well as medical services.

Installment

Products and services are paid at pre-set intervals and for pre-set amounts. Usually includes interest. This type of credit includes car loans and large appliances, as well loans from commercial banks, finance companies, for consumers, savings and loans companies, and credit unions. It is also possible to request a loan for a specific purpose and the consumer agrees to pay the debt in full within two or more payments at a specified date.

Revolving

You can buy several items within a short period of time using this type of credit as long as the total purchased amount does not exceed the assigned credit limit. Payments are made at regular intervals and the payments may be equal to or greater than the suggested minimum payment. Interest is calculated on the remaining balance. Examples of this type of credit include: credit cards which may be issued by a bank or a store.

Credit Cards

What are the advantages and disadvantages of getting a credit card?

Advantages

  • The convenience of buying what you need today and paying in the future
  • Budgeting is easier because your statement will detail all the account activity for the month
  • You can consolidate all your accounts into one payment
  • It is safer because you no longer have to carry cash

Disadvantages

  • You may end up paying more for your purchases when finance charges are included
  • Some credit cards have additional costs such as annual fees
  • You may overspend if you do not keep track of your spending habits
  • It is easier to make unplanned purchases

What is identity theft?

Identity theft occurs when a person gathers your personal information such as your name, social security number, or your date of birth and uses this information to open credit accounts without your permission.

Every year, the number of people affected by identity theft increases dramatically. Clearing the damage to your credit report takes months-sometimes years, as well cost you money. Victims of this kind of theft may be denied loans and even employment opportunities when decisions are based on wrong information.


Identity Theft

  • Four of every five victims do not know how their information was stolen
  • One of every 10 cases is not discovered for two years or more
  • To avoid being discovered, thieves may use a child's information or use a deceased person's identity

How does identity theft occur?

Theft of a wallet or purse

Starting with the amount of your paycheck for the month, add all the sources of income that you recieve each month including rent, child or spousal support, pensions, or interest earned.

Mail theft

Your bills, statements, pre-approved credit card offers, and other documents may contain personal information.

On your computer

A computer virus can easily transmit your personal information to an unknown party.

Identity theft within a group

This may happen at work, stores you visit, schools, hospitals, etc. When a business' customer file is stolen, a thief has access to the personal information of a large group of people.

Fraud

An identity thief poses as a legitimate representative of a company to gather personal information.


How to avoid identity theft?

Review your accounts

Save your receipts and review your accounts each month. This way you'll be able to reconcile your spending and easily recognize any unexplained transactions.

Request a credit report

At least once a year, request a copy of your credit report and review the information for accuracy.

Protect your information

Do not give your personal information over the phone, by mail or over the Internet unless you have initiated the transaction by contacting the Customer Service number that appears on a bill. Sometimes, thieves will pose as company representatives to gather your information.

Your social security number

Do not carry your Social Security number in your bag, keep it in a safe location. At the same time, take a few minutes to find out how the companies you have business with use your information and what steps are taken to keep your information safe.


How to avoid identity theft?

If you are a victim of identity theft take the following steps:

1) Document your actions. Write down the time and how long you took to resolve your identity theft. In some cases, the person found guilty of the theft will be ordered to repay you for your financial loss, including lost wages. Keep copies of all your correspondence and register all the calls you place including the time as well as the name of the person you spoke to.

2) Contact the police. Open a police report, this way the police may begin a criminal investigation. You will also need information from the police report to clear your information.

3) Notify the credit agencies about the theft. The credit agencies fraud departments will place a fraud alert flag on your report.

4) Notify your bank and credit card companies. If the thief has gained access to these accounts, you can change the account number, suspend unpaid checks, and assign passwords. It is very important, if you decide to close the account, that the company report the account as closed at customer request.


Testimonials

Hear from others that have already used ADIR Global Protection.

Customer:: Mr. Rodolfo Leocadio
Event Unemployment

The economy made finding work difficult for Mr. Leocadio, forcing him to move from his home in Riverside, CA to Boardman, OR. Unable to complete his Curacao payments he called ADIR Global Protection to activate his protection plan. Our expert made applying as easy and convenient as possible. The required forms were faxed along with detailed activation instructions. Mr. Leocadio's request was processed the following day.

I was very pleased with the service I received. Being out of work for several months, ADIR Global Protection suspended my payments and I was able to continue paying at a later time. I appreciate all your help.


Customer: Mrs. Oralia Sziarra
Event Loss of a direct family member.

When Mrs. Oralia Sziarra's husband passed away in 2010 she was able to activate ADIR Global Protection for two months. Today, she keeps her account current by making her normal monthly payments.

You helped me in my moment of need. When my husband passed away, I didn't have any money and you helped me suspend my payments until I got back on my feet. It was a great help and I shared my experience with other people. It's very stressful knowing you have bills to pay but don't have the money to pay them and don't know what else to do. You were the only ones that helped me during that difficult period. Thank you.


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