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Money MattersBank accounts Different banks and credit unions have different requirements for opening an account. At a minimum, you must have a form of identification and proof of address. You must also have a valid Social Security number or Taxpayer Identification Number. Anyone, regardless of immigration status, can get a Taxpayer Identification Number (TIN). File IRS form W-7, together with a copy of a government-issued photo ID, such as the page of your passport that has your name and photo, or a “matricula consular” or other national ID card. Send the W-7 to the IRS with your tax return. See information on filing tax returns in the “Your Rights and Duties” section of this Guide. You may want to open the account with a cash deposit so that you have immediate access to the funds. You may want to open the account with a cash deposit so that you have immediate access to the funds. Getting a bank account in your name will give you options with your money. Certain types of accounts, such as savings, earn interest on deposits. A checking account will allow you to buy things if you have no cash. Different types of accounts will have different features. Consider them all. For example, some checking accounts require a minimum balance to earn interest. Sometimes a fee is imposed if you write a check without sufficient funds to cover it (an "overdraft" or "bouncing a check"). In other cases, overdraft is available up to a specified amount. Sometimes, the bank will impose a per-check fee. In others cases you will be able to write a specified number of checks for a monthly fee. Access to credit It is illegal to deny credit to someone on the basis of her race, sex, sexual orientation color, religion, national origin, marital status, disability, age (unless you are under 18) or because she receives public assistance. However, some government programs, including student loans, are available only to citizens, permanent residents, refugees and asylees. In addition, a lender may deny an application for credit if her remedies and rights to be repaid are limited because of an applicant's residency or citizenship. (Some credit card companies require you to provide proof that you have your “green card” or are a refugee or asylee.) Finally, in some cases there are embargoes on doing business with citizens of certain countries. Building good credit Lenders will not ordinarily loan to someone who has held a job for less than a year and has no prior credit history. Bad credit, by falling behind on payments or defaulting on a loan, will also make it difficult to get loans. In order to build up good credit, you have several options. Once you have held a job for a year or so, you can apply for a personal loan from your bank. If you make all the payments on time and pay off the loan, you will start establishing good credit. Alternatively, you can have someone with good credit "co-sign" a loan with you. The co-signer, however, will be liable for the debt if you default. Finally, you can get a credit card. Credit Cards Anyone may apply to get a credit card. Credit cards allow you to make purchases and pay for them later. Credit card companies charge interest on the balance you maintain on your credit card. There are some things to consider when deciding whether to get a credit card:
Credit Reports A credit report or "consumer report," contains information about your credit. The information is on file with a credit bureau, or "consumer reporting agency." The data consists of your "track record" of payments on charge accounts, loans and credit card accounts. Credit report companies are listed in the "Resources" section. If you apply to a company for credit, the company will often obtain a credit report in order to decide whether to lend money or extend a line of credit to you. The company may obtain the information from the credit bureau in writing, electronically or by telephone. You can get the information on your credit report by requesting a copy of your report online, by mail or by telephone. You have the right to get your credit report for free one time each year. See resources below. Credit reports are not always accurate. You should check yours at least once a year and before applying for a loan. If you wish to challenge any information in the report, you can request a form from the credit report agency. Fill it out and return it to the company. The company has 30 days to investigate the matter and inform you of the results. Consumer and Debt Collection If you cannot pay your bills, your creditors may report the debt to a debt collection agency. Bill collectors may then call you to try to collect on the debt. To stop these phone calls you can write the collection agency and ask them to stop calling you. If you ask them to stop, they must. This request only stops the calls, not the debt. The company you owe money to still has the right to contact you. You still have a legal obligation to pay the debt. If you cannot pay your bills, you may want to write to your creditors and explain why you have fallen behind. Often creditors will work out smaller monthly payments for your debts if they are aware of special circumstances. If you are in default on a bill, you have the right to be notified of the default. You then have 14 days to cure the default before the creditor can proceed against you. Resources You can go here to get your free credit report: www.annualcreditreport.com More reliable information about credit cards and credit reports: Maine Bureau of Consumer Credit Protection www.maine.gov/pfr/consumercredit/consumer_info.htm National Consumer Law Center (many topics in several language) www.consumerlaw.org/initiatives/seniors_initiative/information.shtml Federal Trade Commission Credit and Loan information www.ftc.gov/bcp/menus/consumer/credit.shtm Debt Collection in Maine www.ptla.org/cliented/debt.htm June 2009 |
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