Frequently Asked Questions about Credit Cards and Identity Theft

  • I have a credit card with my name on it, but it is actually my parents’ account number. Is this card building credit for me? No. You are considered an authorized user on the account, but your parents are the primary account holders. To build credit, you must be the primary account holder, or at least a joint account holder.
  • I have a credit card and am the primary account holder. How can I resist abusing it? Use your credit card to help you build credit by making small charges and paying them off in full each month. Stick to two expense categories only, such as gas and groceries, and don’t make any exceptions unless you have a serious emergency.
  • I choose the “credit” option every time I use my debit card. Is this building credit for me? No. Using the credit function of your debit card is more like writing an electronic check because you are still taking money directly out of your checking account. Even if your debit card has a major credit card (Visa, MasterCard, etc.) logo on it, it is not building credit for you.
  • I have a few store credit cards (Target, Best Buy, etc.). Are these accounts included on my credit report? Yes. However, though they will affect your credit score, store credit cards do not carry as much weight as major credit cards such as Visa or MasterCard. It is OK to have a few store credit cards, but a major credit card will do more to help you build credit.
  • Where can I apply for a major credit card? A good place to begin is your bank or credit union. Remember that you might have to prove your ability to make payments in order to obtain a card.
  • If one credit card will help me build credit, will several build my credit even more? Research shows that there is no benefit to having more than two major credit cards. And even if you’re able to pay the required monthly amounts, having too many accounts open can make you appear risky to the credit bureaus determining your credit score.
  • What if I forget and make a late payment? Is my credit score ruined? Your credit report reflects at least the past seven years of activity, but it puts the most emphasis on the most recent two years. In other words, the farther you get from your mistakes, the less impact they will have on your credit score. There is no quick fix for improving a credit score, so beware of advertisements that say otherwise.
  • If building credit is a wise decision, what’s so bad about using credit cards to buy some things that I really want but can’t afford right now? It is not wise to use credit cards to purchase things that you cannot afford. Living within your means is always the way to go.
  • What is identity theft? In this insidious and increasingly common crime, someone assumes your identity, secretly opens up accounts in your name, and has the bills sent to another address.
  • How can I protect myself from identity theft? Be password savvy. The more sensitive the information, the stronger your password should be. Aim for passwords with eight to fourteen characters, including numbers, both uppercase and lowercase letters, and, if allowed, a few special characters like @ and #. Never use an obvious number like your birthday or wedding anniversary. Don’t use the same username and password for every site. Change the password to your online credit card or bank account at least once a year. If you must keep a written record of your usernames and passwords, keep the list in a secure place at home, not in your wallet. Beware of scams. Don’t make yourself vulnerable. A few tips: Research a company or organization before submitting your résumé. Don’t e-mail any personal information (social security number, bank details, credit or debit card numbers, passwords, etc.) that could put you at risk of identity theft. Don’t answer questions about vital personal information over the phone if you didn’t originate the call. Don’t reply to e-mails, pop-ups, or text messages that ask you to reveal sensitive information. Don’t send sensitive data by e-mail. Call instead, and deal only with businesses you trust. Never click on links in unsolicited e-mails or paste URLs or lines of code into your browser bar. If an offer sounds too good to be true, it probably is.
  • Where can I get my credit report? You can keep an eye on your credit report by visiting the free (and safe) Web site annualcreditreport.com at least once a year. Regularly reviewing your credit history pays off in major ways. It alerts you to any new accounts that might have been opened in your name. It also lets you catch unauthorized activity on accounts that you’ve closed or haven’t used lately. Everyone is entitled to one free credit report a year from each of the three major credit bureaus.