National Credit Education Month

March is National Credit Education Month

As a nation, we don’t need an act of Congress or a presidential proclamation to want to dedicate one month a year to learning more about credit and its role in our lives. While there is currently no official government designation of March as being National Credit Education Month, many in the finance industry have focused on credit education during the third month of each year. In fact, we should be open to learning about credit year-round, like taking a course such as our free Credit to You Credit Basics workshop, having your credit report analyzed by an accredited financial counselor, or accepting and participating in a credit-building challenge like the one that follows.

A Brief History of the National Credit Education Month

National Credit Education Month is an annual event observed in the United States every March to educate people about credit and the importance of good credit management. The event was first established in 1989 by the National Foundation for Credit Counseling (NFCC), a nonprofit organization that provides financial counseling and education services to consumers. During National Credit Education Month, the NFCC and other organizations offer educational resources such as workshops, webinars, and seminars to help consumers learn about budgeting, saving, debt management, credit scores, and credit reports. The event also serves as a reminder to consumers to review their credit reports and check for errors or inaccuracies. The goal of the event is to encourage people to take a fresh look at their credit and finances and to make positive changes.

The Challenge: Improve Your Credit In One Month

In honor of National Credit Education Month which occurs every March, Money Fit offers the following tips, one for each day of the month, to help people to not only understand their consumer credit reports and scores but to know how and when to build them. You don’t have to wait until March to use these credit-building tips and can apply them in order any time you’re able to.

Day One:

Pulling Your Free Credit Report
If you have not pulled your reports from in the past twelve months, do so to start off your National Credit Education Month properly. Not only is this a free service (no debit or credit card required) resulting from the 2003 passage of the F.A.C.T. Act, but you can take advantage of this service every twelve months from each of the three major consumer reporting agencies (Equifax, Experian, TransUnion).

Be prepared to type in your name, current address, recent address if you have not lived at your current address for more than two years, your social security number, and your date of birth. In our experience, roughly one in three consumers will need to request at least one of their three reports by phone (877-322-8228) or by mail (download a printable form here:

After receiving your reports (whether online or by mail), keep them in a safe and secure location. If you save them to your phone or computer, add a password to the report files so no one else can access them. As for yourself, you will want to access them regularly throughout the rest of this month as you complete the rest of the daily tasks so you can become the master of your own credit.

Please note that your free credit report will not include a credit score. We will address credit scores over the next three days.

Day Two:

FICO Credit Score

FICO (pronounced f-EYE-ko) is the name of the credit score that holds a monopoly on credit-based decisions in this country. From 85% to 95% of all decisions involving a credit score will be based on a FICO score.

Like any credit score, the FICO score attempts to predict your likelihood of making your future debt payments on time. To do this, it uses information from your credit history collected by the consumer reporting agencies (Equifax, Experian, TransUnion), because the best predictor of future behavior is past behavior. So, if the information is not on your credit report, it is not a factor in your credit score (see March 19 task for the first of the growing exceptions).

FICO is the only credit score that really matters when it comes to applying for loans. None of the free scores you get online or through your bank or credit card company are used by lenders for loan qualification purposes. Even the free FICO scores are usually an older version of FICO that lenders do not use.

The most important factors in your FICO score are those that are the most reliable predictors of your future debt payment activity. These include your history of payments (especially your recent payments), your total balances, and your individual account balances (especially when compared to their credit limits/original loan balances), how long you have had credit, what you are doing with new credit (applications and payments), and what types of loans and credit lines you have.

The most common FICO score ranges from 300 on the low end to 850 on the high end. Most lenders consider a score of 750 or 760 on up to be excellent credit, meaning they will offer their best interest rates in these score ranges. Otherwise, your score means more to your potential lender than it should to you. The lower your score, the more likely you are to have to pay higher interest rates or even be denied a loan.

Your credit score has nothing to do with your income, your gender, your marital status, your first language, or any other common discriminatory factor. It is completely based on your history of credit usage. If you have never had credit before, look at the recommendations for building your credit starting with the March 19 tip.

Day Three:


While FICO holds the monopoly on credit scores used in credit-based decisions, VantageScores have monopolized the free credit score craze since the mid-2010s. Most free credit scores you will pull for tomorrow’s task will be a VantageScore 3.0 or 4.0.

In the early 2000s, the three consumer reporting agencies (Equifax, Experian, and TransUnion) partnered to develop a credit score to compete with FICO. Originally scaled similarly to school grades to be more consumer-friendly, VantageScore versions 3.0 and 4.0 now use a score range similar to FICO’s 300-850. Although scoring factors differ in some details, scores roughly equate to FICO scores, so a VantageScore in the mid-to-upper-700s or 800s can be considered an excellent score.

Although growing in use among creditors, VantageScores still primarily serve an educational role for consumers. Take advantage of free credit score opportunities to better understand your current credit rating. Viewing your own credit score will not hurt or affect you in any way in regard to your credit rating.

Day Four:

Free Credit Scores

Today, your task is to check out your free credit scores to get an idea of what your credit rating is. First, check with your current bank, credit union, or credit card companies to see if they already offer a free credit score. If not, consider signing up for one or more of the following accounts, none of which will hurt your credit rating*:

Most of these services offer educational information about your credit score, including charts that show you where your score falls. Ignore charts that compare you to other consumers. You only care what lenders (and potential lenders) think of your score. Credit scores are not graded on the curve.

*Do NOT use any service that requires you to enter your credit card or debit card information. You should not pay for your “free” credit scores. Some services may require you to sign up for a free account.

Day Five:

Setting a Credit Score Goal

Your task today is to set a goal to improve your credit score. Now that you know where your credit score stands after pulling it yesterday and knowing that better credit means lower interest rates on mortgages and other loans, commit today to improve your credit starting now. Beginning with tasks on March 19, you will have the opportunity to take small steps each day to improve your credit rating.

In the meantime, decide what you would like your credit score to be a year from now. Be realistic, understanding that it is highly unlikely you can go from a credit score of 500 to 800 in just one year without extensive focus and effort. 100 to 150 points is a very realistic goal if you establish positive credit-building habits.

Once you have a goal in mind, write it down and post it on your bathroom mirror, your bedstand, or somewhere else you will see it regularly. Consider sharing your goal with a family member or friend and reporting your progress to him or her regularly. Doing so can nearly double your chances of achieving your goal.

Day Six:

Consumer Reporting Agencies (CRAs)

As mentioned previously, Consumer Reporting Agencies (CRAs) are for-profit businesses that collect and distribute the credit-related information of consumers for legitimate business purposes. Despite being known as credit bureaus, CRAs are not government agencies or departments, although they are highly regulated by several major consumer laws enacted since the 1970s.

The oldest CRA is Equifax, headquartered in Atlanta, Georgia. Founded in the 1890s, Equifax collects and makes available credit information for both consumers and businesses.

Experian was originally part of TRW Information Systems and came into being in 1968. However, Experian’s founding is considered 1996, the year TRW sold it to two private equity firms who sold it a month later to a British retailing group. Again in 2006, Experian was split off and is now an independent public company, headquartered in Dublin, Ireland. Like Equifax, Experian collects and distributes credit information for both consumers and businesses.

The smallest of the “Big Three” credit bureaus, TransUnion was also founded in 1968. As the name suggests, TransUnion originally worked with the railroad industry. Becoming a publicly-traded company in just 2015, TransUnion has its headquarters in Chicago, Illinois. TransUnion collects and distributes credit-based information of consumers. While it does not offer credit reports or ratings for businesses, TransUnion does offer data-driven technology services to businesses.

Many small regional consumer reporting agencies still exist around the country, but these three are the only major national agencies you usually need to concern yourself with.

Day Seven:

Installment Loans

Your credit rating is based on your history of payments to your current and previous lenders, from home and car loans to credit cards and store cards. You will likely have different types of credit and loans on your credit report.

Today’s learning topic is the installment loan. Examples of installment loans include most home mortgages and car loans, as well as most student loans and personal (“signature”) loans.

An installment loan starts with a fixed amount of money lent to the borrower, usually for a specific purpose (e.g. home, car, school). The terms of an installment loan also specify a fixed monthly payment and payment day (e.g. the 1st of every month) along with a set payoff date in the future. Together, these terms are known as the amortization schedule, or the details of how much you pay to the lender each month, how much goes to the balance, how much goes to interest, and when the balance is scheduled to hit $0.

Some installment loans may include terms that allow the payment to vary from year to year (e.g. ARMs or Adjustable Rate Mortgages), sometimes even including a single final “balloon payment” that is many times greater than the regular monthly payment.

Most financial counselors consider standard installment loans to be the easiest to repay since the monthly payment is set and easily remembered. This is the case, even though installment loans typically include some of the household’s largest monthly payments (e.g. mortgage, car loan, student loan).

Day Eight:

Revolving Credit

Today’s topic revolves around another type of credit: Revolving Credit. Credit cards are the most well-known examples of revolving credit. A revolving credit line establishes a limit to how much you can borrow at any given time. It also identifies your monthly interest rates, a minimum payment, and penalties for missing such payments.’

Unlike installment credit, revolving credit does not have a set payoff date. You can use your revolving credit, pay all or some of it off, use more of it again next month, pay some or all of that balance off the following month, and continue doing so as long as you want.

Because of the uncertainty of the monthly payment on revolving credit accounts, they can easily become a thorn in your financial side without proper discipline, leading to overwhelming balances whose minimum payments become impossible to pay in full.

Because of the additional discipline required to manage credit cards properly, credit scores tend to weigh activity on credit cards more heavily than activity on installment loans.

Day Nine:

Home Equity Line of Credit (HELOC) and Home Equity Loan (HEL)

A subset of revolving credit, a home equity line of credit (HELOC) combines the revolving aspects of a credit card with the secured asset of a home. Homeowners whose home is worth more than what they owe have “equity” in the home. That equity can be used as security against which to borrow money from lenders.

For example, if your home is worth $200,000 but the balance on your first mortgage is $150,000, then you have $50,000 of equity in your home (use our calculator here). Lenders are usually willing to offer you a revolving line of credit of about 80% of your equity ($40,000 in this case) that you can use now or in the future, all at once or a little at a time.

Unlike credit cards that are typically unsecured by the property, HELOCs are tied to your home. If you do not repay as agreed, the lender has certain rights to your home, including the right to foreclose on it.

A home equity loan (HEL) differs from a HELOC in that it is an installment loan. Like a HELOC, a HEL is lent against the equity you have in your home. However, HELs require a set monthly payment, typically a set interest rate, and have a set payoff date. For these reasons, HELs tend to call fewer financial troubles than HELOCs for homeowners.

Day Ten:

Payment History

Having pulled your credit report(s), you have likely reviewed over and wondered what you should be looking for. Over the next six days, you will learn about various types of data include don your credit report and how it might affect your credit rating.

Since your history of payment (also known as your pattern of payments) has the greatest impact of all factors on your credit rating, we will start there.

While each of the three consumer reporting agencies (CRAs) provides your credit report in a different format, each lists your history of payments in a table below your account details. The table shows each month’s payment status for the past two to three years, indicating whether the payment was on-time, 30+ days late, 60+ days late, 90+ days late, or more. Sometimes you will see an “X’ in the box, either meaning there was no payment due or the creditor did not report any data for that month.

Although your report will only show the individual payment status for the past two to three years, if you have made a late payment at any time during the past seven years, that late payment is still be reported to the credit bureaus and still playing a role in your credit score. However, the further in the past such late payments are, the less they hurt.

Day Eleven:

Account Status

Looking over your credit report, you may notice accounts that are listed as Open, Paid as Agreed, Closed/Paid Never Late, Settled, Paid for Less than Full Balance, Collections, Charged Off, Included in Bankruptcy, and #Days Past Due, to name just a few more common account descriptions. Your reported status for each account can have a positive or negative effect on your credit rating. Any time you have an open account and are paying as agreed, credit scoring models assume you will continue to behave similarly in the future and will reward you accordingly with a higher credit rating.

Conversely, recent accounts that have gone to collections, been included in a bankruptcy, been settled for less than what was owed, are past due, or have been charged off* will generate downward pressure on your credit rating, resulting in a lower score.

*Charging off a debt is an internal action by the creditor. Basically, the creditor is telling the IRS they do not expect the balance owed to ever be repaid, so they do not want to pay taxes on it.

Day Twelve:

Hard Inquiries

Each report will have a section for inquiries, which is then divided into subsections. An inquiry is a note indicating an organization has accessed your credit report. The first sub-section of inquiries is the Hard or Active Inquiry section. Hard inquiries are generated when you apply for a loan or credit account.

The potential lender, as part of the qualification process, pulls your credit report and score in order to decide whether to approve your application. Such pulls are listed in your Hard Inquiries section.

All inquiries remain on your credit report for 24 months. Hard inquiries may have a small, negative effect on your credit rating, typically 1% to 2% maximum, or 5 to 10 points. After six months, though, the negative effects begin to diminish until they have no effect at all on your credit rating after 12 months.

Day Thirteen:

Soft Inquiries

Yesterday, you read about Hard Inquiries generated whenever you apply for a loan or credit account. All other inquiries are considered Soft, or passive, Inquiries. Depending upon the Consumer Reporting Agency report, your soft inquiries may be divided into Promotional Inquiries, Account Review Inquiries, or just general Soft Inquiries.

Soft inquiries never have an effect on your credit rating. They are listed for your information only. You should want to know who is looking at your credit report and when.

Any creditors you already have accounts with will likely check your report from time to time. Such inquiries will be listed under “Account Reviews.” Besides creditors, you might also see your insurance companies here.

Promotional Inquiries list any company that acquires a mailing list from the CRA with the intention of sending a promotional offer, usually in the mail. If you prefer to block all promotional offers, you may make a request at or by calling 1-888-567-8688. You will need to provide your name, social security number, and address. Opting out online or by phone allows you to opt out for up to five years. To opt out permanently, you will start your request online and print and mail the form once completed.

Day Fourteen:

Public Records

Every credit report will have a section for “Public Records.” Historically, this section listed any bankruptcies you might have filed in the past seven to ten years, any financial judgments against you, and any tax liens filed against you.

As of 2018, only bankruptcies are listed under Public Records. If you see any other information, regardless of its accuracy, you should consider disputing the item to have it removed (see March 17 for details).

A Chapter 7 “liquidation” bankruptcy will remain on your credit report for ten years, while a Chapter 13 “repayment” bankruptcy will remain on your credit report for seven years. Bankruptcy is the single most damaging item you can have on your credit report. When bankruptcy is listed on your credit report, your score might decrease by as much as 30% to 35%.

Regardless of the chapter of bankruptcy, you have filed, the further in the past the bankruptcy is, the less it hurts your score. Bankruptcy is not the end of your good credit. With appropriate credit-building efforts, it is very possible to rebuild your credit within even two or three years to the point of qualifying for a home mortgage with a reasonable interest rate.

Day Fifteen:


For whatever reason, the general public overwhelmingly believes that collection accounts are the worst thing that could happen to your credit rating. As noted yesterday, bankruptcy holds that distinction.

Individually, a collection account might drop your credit score from 1% to 3%, or 5 to 15 points. Collections remain on your credit report for seven years from the original date the account changed from “late payment” to “delinquent” (usually 6 or 7 months after the most recent missed payment).

Be aware that many collection agencies try to restart the sever-year credit-reporting period when they acquire the account, regardless of how long ago the most recent missed payment occurred. Use the information on March 17 to dispute such inaccuracies.

You should also know that paying off a collection account will not remove it from your credit report. It will continue to report as a collection account but will show a $0 balance. The most recent credit scoring models from both FICO and VantageScore ignore collection accounts that are paid in full, creating an incentive to pay off your collection accounts. However, older models (which are still very common) will still count the collection account against you, even with a $0 balance.

Day Sixteen:

Identifying Errors

Depending upon the study you read, anywhere from 60% to 90% of all credit reports have some sort of error on them. If you have been reviewing your credit report according to this schedule, you have likely come across an error or two already.

Most errors involve misspellings or transposed digits on addresses, names, or phone numbers. Such errors have no effect on your credit rating.

However, between one-in-four and one-in-twenty reports (again, depending upon the study your read) contain such a severe error in your account details that it would lead you to have a credit application denied for no other reason.

As you review your credit report, circle or otherwise note errors that have anything to do with your payment history, the account status, the account ownership (e.g. you do not recognize the account), or even who is looking at your credit report (Hard Inquiries, in particular). These are the types of errors you will want to dispute using tomorrow’s instructions. For now, make a note of the error and, if you have any, gather documentation proving the error (e.g. payment receipts for late payment errors).

Day Seventeen:

Dispute Error

This is a big credit day! You have been looking over your credit for two and a half weeks and have likely found an error or two you would like to remove from your report.

First, even if the error is common to all three CRA reports, you must dispute the error individually with Equifax, Experian, and TransUnion. One exception to this rule has to do with consumers who have passed away (e.g. you are checking your late spouse’s credit to learn which accounts to close). If you report such an event to one CRA, they must report it to the other two. Still, you would be wise to consider confirming such disputes with all three CRAs.

To dispute an error, while you may do so by mail and you may even find many templates online, the easiest and by far quickest and most effective way to do so is directly through the CRAs’ home pages. Go to,, or, look for “Dispute” and click the link.

Next, you will either need to log into or create a free account with the CRA or enter the report number on which you found the error.

Once you bring up your credit report, click the “Start a New Dispute” link and navigate to the item you want to dispute.

After you click on the error, the CRA will offer you a dropdown list of reasons why you are disputing the item. Choose the description that best describes your reason for the dispute. If none of the reasons fit your situation (either fully or in part), you may also add a brief argument for your dispute.

Before submitting the dispute, you can also upload any relevant documentation you might have in support of your dispute.

Submit the dispute. Next, you will be notified by email of any activity regarding this dispute. The creditor has 30 days from the day you dispute the error to respond. If the creditor feels they have documentation proving the item is accurate, they will deny the dispute. They may also remove the item if they cannot prove its accuracy. If, after 30 days, the creditor has not responded, the item will automatically be removed.

If the creditor denies your dispute, your next step is to contact that creditor directly and request copies of their proof. You should also be prepared to share your own documentation of the error if you have any.

Day Eighteen:

Do Not Close Old Accounts

Many consumers are tempted to start closing old, unused accounts when they begin their credit-building (or rebuilding) journey. Closing old accounts will often hurt your credit rating by eliminating some of your credit limits, thereby increasing your credit utilization ratio.

Today, your task is to identify your oldest revolving account on your report. This is likely to be a credit card or a store card.

Next, set up a plan to use that card once every couple of years, paying it off immediately and in full, to keep it open and active on your report.

If it is a store card, make one purchase at that store of something you need anyway. Then, stop at the customer service desk on the way out and pay it off in full.

If your oldest account is a credit card, make one small purchase on it once every year or two to keep it active. The purchase can even be a pack of gum. It does not matter how much you charge on the card, just that you have activity. Pay it off, of course, in full immediately.

Day Nineteen:

Experian Boost

In March 2019, Experian launched and began marketing a revolutionary new credit-building product called Boost. Although FICO had begun piloting a scoring model that incorporated savings account balances and trends, Boost was the first major product to incorporate monthly bill payments like electricity, heating, and even cell phones into a consumer’s credit activity.

The best part? Experian Boost is absolutely free to sign up for and use. There are no hidden costs or fees. Moreover, Boost can have an immediate effect on your score, averaging 15 points per consumer.

The downsides? Boost still does not connect to checking accounts at all credit unions and banks nationwide, so you may not be able to use the product. Additionally, Boost is an Experian product. Neither Equifax nor TransUnion have a similar product yet.

Day Twenty:

Authorized User

For decades, credit card companies have offered “authorized user” cards to family members of their cardholders. Authorized users can receive a free credit card with their name on it. The Authorized user can use the card but is not responsible for the payments. That responsibility remains with the account cardholder. Yet, the authorized user receives a boost from the cardholder’s credit rating.

An authorized user card is an ideal way to help young people, especially, build their credit rating. If you are the account cardholder, you can either log in to your account online or call your card company directly to request the card. The card company usually reserves fees only for lost card replacement and other uncommon scenarios.

If you would like to take advantage of being an authorized user, you might assure your family member that you need not even see the card, let alone use it, to inherit a bit of his or her good credit. The card can even be shredded, and you can still benefit.

Plus, if anything ever happened to the cardholder’s credit rating in a negative way, negative information is generally not reported to the authorized user’s account. If it does get through the CRAs filters and ends up on your report, a simple dispute (March 17) will remove the negative information.

Day Twenty-One:

Automate Payments

Because the history of payments to your creditors is the most important factor in your credit rating, ensuring future payments arrive on time is critical. Today’s task involves setting up a system to all but guarantee those payments get reported on time.

Many consumers are uncomfortable setting up automatic bill payments or giving the credit card company access to draw their monthly payments directly from their checking accounts. This can be particularly true for households struggling to afford living expenses, let alone credit card payments.

That said, this first option is for those who have no problem with the thought of automated monthly payments. The second option is for those who are uncomfortable mixing automated credit card payments with other bills coming out of their checking account.

  • Log in to your credit card account and navigate to your payment options. All major credit card companies will have a link to set up automated monthly payments. Typically, you can choose to set up a monthly payment to cover the minimum balance due, the full statement balance, or some amount in between. Obviously, if you can afford it, pay off the balance in full every month. Otherwise, determine how much you can afford to pay and set the payment for the due date. Next, be sure to manage your checking account such that there are enough funds to cover the monthly payment on the due date.

  • If you dislike the idea of having automated payments come out of your checking account because of the potential for overdraft, consider opening a second checking account at the same bank or credit union. Most will not charge you any additional fees. Then, set up automated payments out of this new, second checking account using the method noted above. Next, after each payday, transfer the required payment amount into the new account so there is money there to cover your credit card bill. This method separated automated payments from day-to-day payments and expenses, minimizing the chances of over-drafting your account. To take this one step further, you can even set up automated transfers from your first checking account to the new account for a couple of days after payday.

Day Twenty-Two:

Pay Down Balances

Your credit card and loan balances play an important role in your credit rating. If you have credit cards with balances at their limits (“maxed out”), this will drag down your credit scores. The idea here is that you have no wiggle room for emergencies.

Whether you pay down your balances in one fell swoop (e.g. using a tax refund or the proceeds of a vehicle sale) or you make slow but steady progress against your balances, your task today is to make a plan to attack your debt balances. You have many alternatives for attacking your debt, from do-it-yourself methods to third-party professionals.

If you choose to accelerate your debt repayment on your own, consider one of the four do-it-yourself debt elimination options: the Debt Avalanche, the Debt Landslide, the Debt Snowball, and the Debt Cascade. Each has its own pros and cons, so consider them carefully before proceeding (just don’t delay… any of the four options is better than no action at all). Each relies on you making no more purchases on your credit card(s) while also making minimum payments on all but one of your credit accounts (your “focus account”) while adding any available cash to the payment on the focus account.

Debt Avalanche: If you feel you have sufficient discipline, focus your extra payments on your account with the highest interest rate first. This will save you more money over time in interest and have you paid off sooner than any other approach.

Debt Landslide: If you want to accelerate your credit-building efforts, focus your extra payments on your newest credit account. Activity (payments, balances, etc.) on new accounts has a greater effect on your credit score than activity on older accounts.

Debt Snowball: If you feel a quick and easy win will keep you motivated, focus your extra payments on your smallest balance first. This method can lead to a quick payoff on one of your accounts, providing a motivational boost to keep you focused. After paying off one or two accounts, switch to either the Avalanche or the Landslide method.

Debt Cascade: If you have absolutely no extra cash to spend beyond your minimum payments, set your current minimum payments to become your future minimum payments as well. Each month, your creditors will ask for smaller and smaller minimum payments. Instead of paying these decreasing monthly payments, you will continue to pay your original minimum payments. After three or four months, you will likely have between $10 and $25 between your “set” payments and the minimum payments your creditors are requesting. Use that $10 to $25 to switch to the Avalanche, Landslide, or Snowball method outlined above.

Third-Party Option #1 – Debt Management through a Credit Counselor: If your interest rates are in the upper teens or above, you are dealing with late or over-limit fees, or if you just need someone to help you through your debt elimination strategy, contact a nonprofit credit counseling agency like Money Fit. Credit counselors work with your current creditors to lower your interest rates into the 2%, 5% or 8% ranges so you can be paid off sooner. As FICO notes, credit counseling is not a factor in the FICO scoring model.

Third-Party Option #2 – Debt Settlement: Be highly suspicious of any organization, whether law office or nonprofit, promising to get you out of half of our debts. This is called debt settlement or debt negotiation, and its success rate is extraordinarily low. Even worse, many organizations advertising such services online and even on TV or the radio are fly-by-night outfits that are here to take your money today but will be gone tomorrow before offering you any assistance. Even the largest and most established settlement companies have been accused by federal regulators of using deceptive practices to mislead potential clients.

Third-Party Option #3 – Bankruptcy: If your debts are such that you have tried for years without success to make headway, you are at risk of losing your home, or your wages are garnished and you cannot pay for even your basic living expenses if may be time to consider meeting with a bankruptcy attorney and an approved credit counseling agency to get you the certificate you will need if you file for bankruptcy. No doubt, bankruptcy will hurt your credit, but if it is your only option, the sooner you take care of it the sooner you can start to rebuild your credit rating.

Whichever path you choose, choose one. Get started today to lower your debt balances and get on the path to better credit.

Day Twenty-Three:

One Small Monthly Step

Today’s credit-building task is easy. Choose a credit card you currently have without a balance and set it up to pay one small monthly bill such as Disney+, Netflix, Hulu Plus, or your Cell Phone. Then, set up your credit card account to pay the full bill every month on the due date automatically. This one action will keep your credit card active while also generating positive purchases and payment activities on your credit report.

That was easy!

Day Twenty-Four:

Start Local before Moving to National Options

If you have no credit or perhaps just one credit account and you have struggled to qualify for a credit card, consider starting local. Look for local or regional stores and shops that offer in-house financings, such as tire shops or gas stations. You might also consider national retail clothing and discount stores (e.g. JC Penney, Kohl’s, Target) where credit qualifications are less demanding than those of national credit card companies.

If you need tires for your car or truck anyway, consider applying for a line of credit at a local tire shop. Then, immediately set up your payment account and pay off all but $50 or so. Then, make payments for the next six months until the account is paid in full. This method provides the required six months of payments to generate a credit score while also minimizing the interest you pay on the tires.

If you choose to apply for a store card, you will likely qualify for a bonus discount for opening the account. Only do this if you were planning to buy something at that store anyway. Then, once you make the purchase, stop at the customer service desk to pay off the balance in full before ever leaving the store. In this way, you do not walk out of the store with a balance on your card that you fail to remember until the bill arrives, leaving you to squeak by on minimum payments.

Day Twenty-Five:

No-Fee Innovative Cards

Another innovative product to launch in the late 2010s is the Petal Card. Like Experian’s Boost product (March 19), Petal is a great credit-building product for individuals with little or no credit history. Petal can use information such as activity and balances from your checking and savings accounts to qualify you for their credit card, in case you have no credit score. However, a poor score resulting from negative activity such as bankruptcy may still disqualify you from this card.

Do not apply for a card just to build your credit. Slow and steady wins the race. Petal is just another option of many to help you start building or rebuilding your credit. Like yesterday’s recommendations, if you do go with a card like Petal, only put one small monthly payment on the card and pay it off in full every month. Do not carry the card around with you “in case of emergencies.” That is a recipe for financial disaster. Finally, never carry a balance on such cards, because they charge rather high-interest rates.

Day Twenty-Six:

Secured Credit Card

Turning to a secured credit card should be among your last options because it nearly always involves an annual fee. If you have tried to qualify for loans or cards in the past and nothing seems to work, your task today may be to research the best-secured credit card for you.

A secured credit card requires the cardholder to deposit a specific amount (usually $300 to $800) into a savings account that then serves as security for the credit card. If you make all payments on time, after a year or so, you should be able to convert the secured card to a standard card and get your deposited savings back.

If you miss a payment, the payment is usually taken out of your savings deposit, and the card is closed until you replenish the savings funds. Such activity defeats the purpose of a secured credit card, so if you start to miss payments, avoid additional high fees and interest by closing the account. You may need more time to grow your income, discipline your spending or otherwise get your finances in order.

Finally, before choosing a secured credit card, get it in writing that the issuer will report your card activity to the consumer reporting agencies so it will build your credit history.

Day Twenty-Seven:

Credit Builder Loan

Today’s task is for individuals who can’t come up with a deposit for a secured credit card but still want to build or rebuild their credit. Some banks and credit unions offer “credit builder loans” that most people with steady employment can qualify for. When doing your research, be aware that even many employees at these banks and credit unions do not know about their credit builder loans because they do not promote them.

When you are approved for a credit builder loan, the bank or credit union places the loan funds in a secured savings account in your name, usually between $500 and $1,000. You then make regular monthly payments to the bank or credit union until the loan is repaid in full, usually over a 12-month period. There are no pre-payment penalties if you choose to pay off the loan early.

Here is the drawback: the interest charged on the loan is usually ten times the interest you earn on the savings account. Still, at a typical 8% to 12% annual interest rate, these loans are legitimate options for anyone who has few others.

Day Twenty-Eight:

Secure Your Accounts with Passwords

This may not seem like a credit-building activity, but adding secure passwords to your credit accounts can minimize the possibility of major fraud in your accounts. Fraudulent activities can negatively affect your credit rating.

Your credit-building task today requires you to set unique, high-security passwords for all your financial accounts. If you have the same password for all your accounts, one careless moment such as leaving your phone screen uncovered while you log into your bank account on campus or using an unsecured public Wi-Fi (e.g. at a coffee shop) might mean all your accounts are immediately at risk.

Consider using a password vault that stores all your passwords behind a single, secure password. Examples include DashLane and LastPass. Password vaults usually have a free version to keep your passwords safe, while also offering premium plans that can fill in your login scripts for you on your home computer or your phone (no more remembering or even typing in passwords)

Do NOT use the password vaults on your Internet browsers.

Day Twenty-Nine:

Freeze Your Own Credit

As of the fall of 2018, you have the right to place a freeze on your credit report at no charge, at any time, as many times as you like. Today’s task asks you to place a freeze on your reports – or at least seriously consider doing so.

A credit freeze prohibits any new lenders from seeing your credit report without you thawing the report (also free). It does not negatively affect your credit score, nor does it prohibit current creditors from doing account reviews.

A credit freeze will keep any legitimate lender from opening a fraudulent account in your name. Even if a fraudster has your name, social security number, date of birth, and address when they apply for an account in your name, the creditor will still need to check your credit report first before completing the application. If your credit is frozen, the application will be denied, plain and simple.

To freeze your credit, you must visit each of the CRAs (,, to make the request online. You will be required to open an account with each of the CRAs if you have not already done so. Do not be surprised if one or more of them ask you to complete the process by snail mail.

Once your report is frozen, you can thaw it at any time. For example, if you are getting ready to apply for a home mortgage, you can thaw your credit reports for one day, three days, or a week or more (very customizable) so the lender can check your report before it automatically refreezes on the date you specify.

Day Thirty:

Freeze Your Dependents’ Credit

Like yesterday’s task, today’s task involves freezing credit reports. The same 2018 law that gives you the right to freeze your own reports also gives you the right to freeze your dependent’s reports (if he or she is under 16 years of age) as well as the reports of any protected adult for whom you are a legal guardian.

Understanding the power of freezing your report should hopefully motivate you to protect your loved one’s reports as well. Even though the most common identity theft for minors originates with their parents and extended family, you still want to minimize the chances of someone using your child’s name and social security to open, use, and abuse a credit or utility account.

Day Thirty-One:

Shred It!

Now that the month is over and you have learned your credit report information inside and out, it is time to shred all your reports. Do not throw them away in the regular trash. Even if your social security number is not on your reports, the information they contain can be used by savvy fraudsters to access your current accounts or even open new accounts (unless, of course, you have frozen your reports).

Do NOT simply tear up your reports and throw them away. Dumpster divers and fraudsters are patient and meticulous if the information is valuable to them. Instead, send your reports through a cross-cut shredder so none of your information can possibly be read, stolen, or used to commit identity theft or fraud against you.

Once you have completed this final task, I hope to see you again soon at the Money Fit Academy to continue your credit education. Have a happy and credit-healthy rest of the year.

About the Author

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Client Credit Report Authorization

You hereby authorize and instruct Debt Reduction Services, Inc. (DRS, dba Money Fit by DRS) and/or its assigned agents to:
  • Obtain and review your credit report, and
  • Request verifications of your income and rental history, and any other information deemed necessary for improving your housing situation (for example, verifying your annual property tax obligations and homeowner’s insurance fees)
Your credit report will be obtained from a credit reporting agency chosen by DRS. You understand and agree that DRS intends to use the credit report evaluate your financial readiness to purchase or rent a home and/or to engage in post-purchase counseling activities and not to grant credit. You understand you may ask any questions pertaining to your credit report. However, while DRS will review the information with you, the company is not able to furnish you with a copy of your credit profile. You hereby authorize DRS to share your information from your credit report and any information that you provided (including any computations and assessments produced) with the entities listed below to help DRS determine your viable financial options.
  • Banks
  • Counseling Agencies
  • Debt Collectors
  • Landlords
  • Lenders
  • Mortgage Servicers
  • Property Management Companies
  • Public Housing Authorities
  • Social Service Agencies
Entities such as mortgage lenders and/or counseling agencies may contact your DRS counselor to evaluate the options for which you may be eligible. In connection with such evaluation, you authorize the credit reporting and/or financial agencies to release information and cooperate with your DRS counselor. No information will be discussed about you with entities not directly involved in your efforts to improve your housing situation. You hereby authorize the release of your information to program monitoring organizations of DRS, including but not limited to, Federal, State, and nonprofit partners for program review, monitoring, auditing, research, and/or oversight purposes. In addition, you authorize DRS to have your credit report pulled two additional times to conduct program evaluations. You also agree to keep DRS informed of any changes in address, telephone number, job status, marital status, or other conditions which may affect your eligibility for a program you have applied for or a counseling service that you are seeking. Finally, you understand that you may revoke consent to these disclosures by notifying DRS in writing.

Client Privacy, Data Security, and Client Rights Policy

NOTE: This sheet is to inform new or returning clients about our services, records, fees, and limitations that may affect you as a consumer of our services. This form also discloses how we might release your information to other agencies and/or regulators. If you do not understand a statement, please ask a Debt Reduction Services (DRS) counselor for assistance.

Debt Reduction Services, Inc. (DRS) has put into place policies and procedures to protect the security and confidentiality of your nonpublic personal information. This notice explains our online information practices and how we use and maintain your information to conduct our financial education and credit counseling sessions and to fulfill information and question requests. This privacy policy complies with federal laws and regulations.

To provide our financial education and credit counseling services, we collect nonpublic personal information about you as follows: 1) Information we receive from you, 2) Information about your transactions with us or others, and 3) Information we receive from your creditors or a consumer reporting agency. We do not share this information with outside parties.

We use non-identifying and aggregate information to better design our website and services, but we do not disclose anything that could be used to identify you as an individual.

You hereby authorize DRS, when necessary, to share your nonpublic personal, financial, credit, and any information that you provided (including any computations and assessments produced) with the following entities in order to help DRS provide you with appropriate counseling or guide you to appropriate services: third parties such as government agencies, your lender(s), your creditor(s), and nonprofit housing-related and other financial agencies as permitted by law, including the U.S. Department of Housing and Urban Development.

To prevent unauthorized access, maintain data accuracy, and ensure the correct use of information, we have put in place appropriate physical, electronic, and managerial procedures to safeguard and secure the information we collect online. We limit access to your nonpublic personal information to our employees, contractors and agents who need such access to provide products or services to you or for other legitimate business purposes.

Debt Reduction Services, Inc. complies with the privacy requirements set forth in the HUD housing counseling agency handbook 7610.1 (05/2010), including the sections 2-2 Mc, 3-1 H(2), 3-3, 5-3 F, and Attachment A.5. At all times, we will comply with all additional laws and regulations to which we are subject regarding the collection, use, and disclosure of individually identifiable information.

  1. Services: DRS provides the following housing-related services: counseling that includes Homeless Assistance, Rental Topics, Pre-purchase/Homebuying, and Home Maintenance and Financial Management for Homeowners (Non-Delinquency Post-Purchase); Education courses that include Financial literacy (including home affordability, budgeting, and understanding use of credit), Predatory lending, loan scam or other fraud prevention, Fair housing, Rental topics, Pre-purchase homebuyer education, Non-delinquency post-purchase workshop (including home maintenance and/or financial management for homeowners), and other workshops not listed above.

Please refer to for details of our services.

  1. Limits: Our services are limited to our normal weekday business hours. We do not provide individual counseling or education services after hours or on weekends, although our education courses are available 24/7.
  2. Fees: We do not charge fees for our financial management counseling and education. However, if you use them, you may have to pay for our Debt Management Program, Student Loan Counseling, Bankruptcy Certificate Services or certain financial education courses (homebuyer education, rental topics, fair housing, predatory lending, and post-purchase-non-delinquency including home maintenance and/or financial management for homeowners).
  3. Records: We maintain records of the services you receive, including notes about your progress or other relevant information to your work with us. You have the right to access and view your records by making a request to your counselor.
  4. Confidentiality: We respect your privacy and offer our services in confidence with the understanding that we may share such information with auditors and government regulators. Certain laws or situations may also lead to disclosing confidential issues, such as those involving potential child abuse or neglect, threats to harm self or others, or court subpoenas.
  5. Refusal of Services: You have the right to refuse services without any penalty or loss.
  6. Disclosure of Policies and Practices: You will be provided our agency disclosure statement.
  7. Sharing of Information: Sometimes we will need to contact other agencies or we may need to share your information, including your records, with other agencies or with regulators. We will do this only if you sign this form that gives us permission except for limited reasons; please see # 5 above for examples of such situations.
  8. Other: You have the right to be treated with respect by our staff, and we expect the same from you in return. We encourage you to always ask questions if something is not clear. We also encouraged you to express your thoughts and advocate throughout our services.

You acknowledge that this authorization will remain in effect for the duration of time that DRS serves as your housing counselor or financial education provider. You also acknowledge that should you wish to terminate this authorization, you will notify DRS in writing.

Disclosure  Statement

NOTE: If you have an impairment, disability, language barrier, or otherwise require an alternative means of completing this form or accessing information about our counseling services, please communicate with your DRS representative about arranging alternative accommodations.

Program Disclosure Form

Disclosure to Client for HUD Housing Counseling Services

Debt Reduction Services, Inc. and its financial education arm, Money Fit by DRS, offer the following housing counseling and educational services related to housing, personal finance, and bankruptcy certificates to consumers:
  • Housing Education Courses: DRS offers many online self-guided education programs classified as Financial, Budgeting, and Credit Workshops (FBC), Fair Housing Pre-Purchase Education Workshops (FHW), Homelessness Prevention Workshops (HMW), Non-Delinquency Post Purchase Workshops (NDW), Predatory Lending Education Workshops (PLW), Pre-purchase Homebuyer Education Workshops (PPW), and Rental Housing Workshops (RHW). These courses help participants increase their knowledge of and skills in personal finance, including home affordability, budgeting, and understanding the use of credit, as well as predatory lending, loan scams, and other fraud prevention topics, fair housing, rental topics, pre-purchase homebuyer education, non-delinquency post-purchase topics including home maintenance and/or financial management for homeowners, homeless prevention workshop, and other workshops not listed above relating to personal finance and housing. Course details are found below under “Housing Workshops.”
  • Home Equity Conversation Mortgage (HECM) Counseling (RMC): Via telephone and virtual platforms, we offer the required HECM counseling nationwide in addition to in-person counseling in Boise, Idaho. We also offer in-home counseling options in thirty counties across southern Idaho for an additional fee to cover our travel and additional staff time costs.
  • Home Maintenance and Financial Management for Homeowners (Non-Delinquency Post-Purchase) (FBC): Clients receive counseling and materials on the proper maintenance of their home and mortgage refinancing. Clients can find help and resources by phone, in our Boise office, or virtually on all topics related to stabilizing their long-term homeownership.
  • Services for Homeless Counseling (HMC): Clients receive phone, virtual, or in-person (Boise) counseling to evaluate their current housing needs, identify barriers to and goals for housing stability, establish a path to self-sufficiency, and connect with emergency shelters, income-appropriate housing, and/or other community resources (e.g. mental healthcare, job training, transportation, etc.).
  • Pre-Purchase Counseling (PPC): Clients receive counseling through the entire homebuying process. Assistance may involve creating a sustainable household budget, understanding mortgage options, building their credit rating, and putting together a realistic action plan to set and achieve homeownership goals.  Additionally, clients will receive materials and resources about home inspections and other homeownership topics relevant to successfully maintaining a home.
  • Rental Housing Counseling (RHC): Via phone, in-person appointments (Boise, ID), or virtual platforms, clients receive housing counseling relevant to renting, including rent subsidies from HUD or other government and assistance programs. Topics can also address issues and concerns having to do with fair housing, landlord and tenant laws, lease terms, rent delinquency, household budgeting, and finding alternate housing.
DRS also offers the following services:
  • A Debt Management Program (DMP) for consumers struggling to pay their credit cards, collections, medical debts, personal loans, old utility bills, and past-due cell phone accounts;
  • The Budget Briefing and Debtor Education Certificates that are required during the Bankruptcy filing process;
  • A Student Loan Repayment Plan Counseling and application service.

Relationships with Industry Partners

Through such services, DRS has established financial relationships with hundreds of banks, credit unions, and creditors such as American Express, Bank of America, Barclays, Capital One, Chase, Citibank, Credit One, Discover, Synchrony, US Bank, USAA, Wells Fargo, and others.

No Client Obligation

The client is not obligated to receive, purchase or utilize any other services offered by DRS or its exclusive partners to receive financial education or housing counseling services. Alternatives: As a condition of our counseling services, in alignment with meeting our client services goals, and in compliance with HUD’s Housing Counseling Program requirements, we may provide information on alternative services, programs, and products available to you, if applicable and known by our staff. Alternative DMP services include negotiating better repayment terms directly with your individual creditors, paying your debts as agreed, or, in extreme cases, filing for personal bankruptcy. Alternative credit and education services can be found through or the Jump$tart Clearinghouse of online financial education resources. Housing counseling alternatives can be found through HUD at
Finally, you understand that you may revoke consent to these disclosures by notifying DRS in writing.

Housing Counseling and Education Fee Schedule


Online Education Program Fees*

Homebuyer Education Course: $59 per participant

  • Self-paced course available here, our online housing counseling and education center. Certificates will be automatically generated upon completion of the course (approximately 6-8 hours)

RentalFair HousingPredatory Lending / HOEPAPost-Purchase (Non-delinquency post-purchase workshop, including home maintenance and/or financial management for homeowners) Online Workshops: $49 per participant

  • Approximately 1 hour each

Other Self-Guided Financial Literacy Webinars (e.g. creditbudgetinghomeless preventiondebt prevention): $0

One-on-one Counseling Fees*

Pre-purchase Homebuying Counseling, Rental Counseling, Post-purchase Ownership Maintenance and Financial Management: $75

  • Session by the hour

Reverse Mortgage/HECM Counseling with Required Certificate:

  • $200†

Credit Report Fee: Paid Directly by Client

*Fees for all but our online education courses and workshops can be paid online by debit card, credit card, or PayPal or in person by cash, check or money order to: “Debt Reduction Services, Inc.” Registration fees are non-refundable 24 hours or less before the start of an in-person course or workshop. Certificates are non-transferable

*Fees may be waived for households with income of 150% or less of that identified on the US Department of Health and Human Services Poverty Guidelines Page

†Home visit counseling is available in 30 southern Idaho counties for potential HECM borrowers at additional costs to cover our travel (IRS reimbursement rates apply) and staff time ($50 per hour or fraction there).

Housing Counseling and Education Fee Schedule


Online Education Program Fees*

Homebuyer Education Course: $59 per participant

  • Self-paced course available here, our online housing counseling and education center. Certificates will be automatically generated upon completion of the course (approximately 6-8 hours)

RentalFair HousingPredatory Lending / HOEPAPost-Purchase (Non-delinquency post-purchase workshop, including home maintenance and/or financial management for homeowners) Online Workshops: $49 per participant

  • Approximately 1 hour each

Other Self-Guided Financial Literacy Webinars (e.g. creditbudgetinghomeless preventiondebt prevention): $0

One-on-one Counseling Fees*

Pre-purchase Homebuying Counseling, Rental Counseling, Post-purchase Ownership Maintenance and Financial Management: $75

  • Session by the hour

Reverse Mortgage/HECM Counseling with Required Certificate:

  • $200†

Credit Report Fee: Paid Directly by Client

*Fees for all but our online education courses and workshops can be paid online by debit card, credit card, or PayPal or in person by cash, check or money order to: “Debt Reduction Services, Inc.” Registration fees are non-refundable 24 hours or less before the start of an in-person course or workshop. Certificates are non-transferable

*Fees may be waived for households with income of 150% or less of that identified on the US Department of Health and Human Services Poverty Guidelines Page

†Home visit counseling is available in 30 southern Idaho counties for potential HECM borrowers at additional costs to cover our travel (IRS reimbursement rates apply) and staff time ($50 per hour or fraction there).