Reading Time: 4 minutes

Credit is an important part of life for many adults, but it can feel confusing or
overwhelming, especially if you’ve had some setbacks.

Whether you’re just starting out, trying to bounce back after a rough patch, or simply want to keep your credit in great shape, this is your go-to guide on all things credit.

What is credit and why does it matter?

Credit is your ability to borrow money or access goods and services with the
understanding that you’ll pay for them later. Your credit history and score show how
trustworthy you are when it comes to borrowing and repaying money.

Good credit can help you qualify for loans, get better interest rates, rent an apartment,
or even set up a phone plan, whereas poor credit can make these things harder or more
expensive.

Remember, “credit is a tool, not a measurement of your value,” says LaDaisha
Washington, financial mentor with UW Credit Union, adding “good credit saves you real
money.”

How do I build credit?

“You need to have credit to build credit,” says Mike Hruska, another financial mentor with UW Credit Union.

New to credit or starting over? You’ve got this. These simple steps can help you build a solid foundation:

• Start with a secured credit card, says Washington. A secured card requires a small deposit (often $100 to $500), which becomes your credit limit. Use the card for small purchases that you can pay off monthly and show lenders you’re responsible.
  
  
• Always make payments on time. Both Washington and Hruska echo this top tip. Even if you can only afford the minimum payment, always pay by the due date.
  
  
• Keep your credit utilization low is another tip shared by Washington and Hruska. Keep credit utilization, which is the percentage of your credit limit you’re using, under 30%. For example, if you have a $1,000 limit, keep your balance under $300.
  
  
• Diversify your credit mix (over time). Lenders like to see a mix of credit types (credit card, car loans, mortgages, etc.) says Washington. Don’t rush to open lots of accounts before you need them but, as your financial goals evolve, having more than one type of credit can help your score.

How do I maintain good credit?

Consistency and smart habits will help you continue to build and maintain your credit. 

• Set up automatic payments or reminders on your phone to pay your bill on time. The later the late payment and the more times it happens, the more your credit score may go down, says Hruska. Don’t let it happen to you!
  
  
• Don’t max out your cards. Staying well below your limit (ideally under 30%) shows lenders you’re not overextended, says Washington.
  
  
• Manage a healthy mix. Try to have a variety of credit types as you build your credit, but only take on what you need and can manage.
  
  
• Limit inquiries. Applying for lots of new credit at once can make you look risky. Only apply for new accounts when you really need them and do your research tomake sure each account is a good fit.

How do I come back from bad credit?

Each person’s situation is unique and credit scores can be negatively impacted for a
number of reasons, says Hruska, but don’t despair. There are steps you can take to
recover:

• Catch up on late payments. Bring any late accounts current as soon as
  possible.
  
  
• Set up automatic payments. This can help prevent future late payments and
  keep your accounts on track.
  
  
• Lower your utilization. Try to pay down balances to under 30% of your credit
  limit. If possible, ask for a credit limit increase (but don’t use the extra credit to
  spend more).
  
  
• Work through the negatives. Dispute any errors you spot on your credit report,
  and pay off items in collections if you can.
  
  
• Be patient and consistent. Credit repair takes time. Most negative marks fade
  after 3–6 months of good behavior, but bigger issues like bankruptcy or
  foreclosure can take 7–10 years to fully disappear. Keep making those small
  positive steps – they’ll add up over time.
  
  
• Ask for help. Many financial institutions and nonprofits offer credit counseling
  and advice. UW Credit Union’s free credit consultations can help you make a
  plan for your finances.

True or false?

There’s a lot of bad information about credit out there:

• “Checking your own credit hurts your score.” – False! Looking at your own credit report or using credit monitoring services only counts as a “soft” inquiry and does not affect your score. In fact, it’s smart to check your credit regularly. You can get a free copy of your credit report every year at annualcreditreport.com.
  
  
• “Carrying a balance helps build credit.” – False! You don’t need to carry a balance or pay interest to build credit. Using your card and paying it off in full each month is the best approach.
  
  
• “Closing old accounts improves your score.” – False! Closing old credit accounts can actually hurt your score because it lowers your total available credit and shortens your credit history. It’s usually better to keep old accounts open, even if you don’t use them, as long as they don’t have annual fees.

Building, maintaining and improving your credit is a journey, not a race. With some
simple habits and a little patience, you can boost your score and open up new
opportunities. It’s never too late — or too early — to take control of your financial health,
and you’ve already taken the first step by learning more. And remember we are here for
you if you have questions or want support.

How to make your credit work for you is a post from Wisconsin Watch, a non-profit investigative news site covering Wisconsin since 2009. Please consider making a contribution to support our journalism.

Reading Time: 4 minutes

Wisconsinites lost $109 million to fraudsters in 2024, according to the Federal Trade Commission.

As our use of technology to manage our money increases, so does the potential for fraud. Financial scams are constantly evolving, so it’s important to stay informed.
Here’s how you can avoid becoming a victim.

Imposter scams from an organization

The most common type of fraud, imposter scams have common themes:

• Someone calls claiming to be from your financial institution, credit card company, the county sheriff, the IRS, a charity or a similar type of trusted entity.
• Using “spoofing” technology, they make it look like the call is coming from a legitimate institution.
• The caller tries to convince you to send money as a donation, to cover fraudulent charges on your account or because of a violation or debt you’ve incurred.
• They ask you for personal information like verification codes or login credentials.
• They create a sense of urgency.

If you receive a phone call like this, especially if it’s unsolicited or unexpected, pause. Do not feel pressured to respond right away. 

Hang up and contact the organization the caller says they represent using a verified number from a legitimate website – or send a secure message through the legitimate organization’s app or website. It’s unlikely that government officials and agencies would call you about official business or ask you to wire money or purchase gift cards.

Imposter scams from a loved one

Beware of calls from people attempting to sound like a family member such as a grandchild or relative asking you to wire money or provide credit card numbers to help them get out of trouble. 

These calls often occur late at night to confuse the call recipient and may use enhanced technology to mimic a loved one’s voice.

Resist the pressure to act immediately. Instead, end the call and independently contact the person who allegedly made the call, in order to verify the details.

Romance scams

Sweetheart scammers pretend to fall in love with people in order to win their trust and steal their money. These scams may unfold over a year or more. They are often initiated on dating websites and apps, or via social media. 

Common reasons for requesting money include airline tickets, tuition, medical costs or paying off debt.

Even if someone has professed their love to you or you feel like you’ve established a bond, be reasonably cautious before reacting. Don’t wire money to someone you’ve never met, or someone you’ve only known for a short amount of time.

Phishing and smishing

Using email (phishing) or texts (smishing), scammers send messages that appear to be from your financial institution, popular merchants or someone you know. They create a sense of urgency to convince you to click a link, open an attachment, take an action such as wiring money or share confidential information like account numbers, login credentials or personal information.

Red flags to watch for:

• Email addresses with domain names (the segment after the “@” symbol) that don’t match the company’s real domain, which is typically the homepage of the company’s website.
• Generic greetings (“Hello user”).
• Frequent misspellings, bad grammar or word choices that seem off.
• Links or attachments that stress acting quickly.

Never click the link or open the attachment. This is a common tactic for downloading malware or spyware to your device and tracking your confidential information.

When in doubt, conduct an online search to verify the website or phone number, and independently contact the entity to confirm the validity of the email or text you received.

Ransomware

Ransomware is a kind of software that holds your device hostage by restricting access until you pay a ransom. Ransomware spreads to your devices when you click on an infected email attachment or a link that leads to a contaminated file or website. Ransomware also can affect a network of computers in the workplace or be passed around on a contaminated thumb drive.

• Never click on attachments or links in unsolicited emails or texts. 
• Avoid using thumb drives from others.
• Run antivirus software to search for and remove malicious software on your computer.

Employment scams

If you receive an unsolicited job offer that seems too good to be true, it probably is. Scammers may pose as employers or recruiters, offering exceptional employment opportunities, including working from home. But once you get the job, you’re asked to deposit an official-looking paycheck in your account and wire a portion of the money to someone else for business purposes.

Before you commit to an employment situation:

• Research the company on trustworthy public websites to make sure it’s legitimate.
• If the job is for a well-known organization, double-check its website to confirm the job is posted there. 
• Avoid on-the-spot job offers, especially when they don’t involve interviews.
• Always get job details and an offer in writing before taking next steps.

Fake check and overpayment scams

These scams might begin with a merchant reaching out to say you’ve overpaid for something and they need to issue you a credit. However, when you initiate the credit process, suddenly the $50 you were supposed to be credited shows as $50,000 and now they’re instructing you to send that money back.

Or someone messages you on Instagram about using your photo or modeling, then they “accidentally” send you a check for too much and ask you to send back the extra money. 

Just like with imposter scams, pause before agreeing to do anything with your money. Don’t send money back to someone who sent you a check. If a company claims they need to access your account to process a refund, hang up and do some research to determine if this is a legitimate situation.

Overall, following a few basic rules can help you avoid being the victim of financial fraud: 

• Always listen to your intuition if something feels off.
• Take time to thoughtfully respond rather than reflexively react.
• Never share account details or personal information. 
• Create a unique username and password for every online account.

You’ve worked hard to earn a living, build your savings and pursue your financial goals. Stay up to date and be aware of ways to protect what you’ve achieved by taking smart steps to avoid the growing number of financial scams out there.

Protect your hard-earned money from scammers is a post from Wisconsin Watch, a non-profit investigative news site covering Wisconsin since 2009. Please consider making a contribution to support our journalism.