5 (More) Things Your Credit Scores Won’t Tell You

November 21, 2014 by · Leave a Comment 

So here is the second half of the list from yesterday. Filled with nice little gems of information.

6. “It’s easier to ruin your score than improve it.”

Increasing a FICO score could be harder than lowering it. That’s partly because negative behavior, like missed payments, counts toward 35% of a consumer’s FICO score. In contrast, paying down debt helps boost a segment that accounts for 30% of the FICO score. The same is true with competitor VantageScore where payment history counts for 28% of the score while the percent of credit limit that’s used counts for 23% of the score.

FICO says score movement isn’t that clear cut. Sprauve says that borrowers can improve their FICO score through consistent positive behavior, such as paying all of their bills on time every time, keeping their balances low and only opening new credit when they need it.

Wrecking a score can also be a lot easier for a borrower with a high credit score. A borrower with a 780 score who’s 30 days behind on a payment will see their score tumble by up to 110 points, according to FICO. A borrower with a 680 score will drop by up to 80 points. The spread grows as the severity of events gets worse: In foreclosure, the 780 will fall up to 160 points while the 680 will shed up to 105 points. After filing for bankruptcy the 780 will tumble by as much as 240 points while the 680 will fall 150 points. “There’s more incentive for someone with a high score to not mess up,” says Paperno.

Sprauve says the lower score already reflects a person who is a greater risk because they have exhibited negative behavior previously. “If someone has maintained an impeccable credit history, their score is going to be hit harder the first time they trip up because statistically it is an indicator of increased risk,” he says, adding that low scores don’t stick around forever — depending on the next steps borrowers take. “They can begin to recover soon after by consistently demonstrating responsible credit management over time.”

7. “Some debts are better left unpaid than others.”

For all the talk about keeping debt to a minimum, wiping out mortgage or car loan debt might not raise a score at all. Ulzheimer says he paid off a $249,000 mortgage two years ago, which resulted in a meager four-point rise in his FICO score. In contrast, paying off all credit-card balances can boost a score by triple digits, he says, assuming no late payments or other credit problems. FICO’s Sprauve says, “Paying off the loan completely has small statistical value when predicting credit default risk.”

The rules change when borrowers are cash-strapped. If they can’t pay all their monthly bills, missing their mortgage payment could hurt their score more than missing a car or credit card payment, says Paperno. The larger the dollar amount of the past due debt, the bigger the initial hit to the credit score.

To be sure, what’s better for a credit score might not be better for borrowers. For example, advisers point out that they won’t have much time to catch up on car loans if they fall behind. Cars are being repossessed after 60 to 90 days of nonpayment.

8. “We’re sometimes wrong.”

After living in China for seven years, Lonnie Hedge returned to the U.S. last year and discovered that $8,000 in fraudulent charges were on his credit reports, and his credit score had dropped from the low-800s to the low-600s. Six months later, Hedge, a disabled veteran, says he’s still trying to clear up the error by contacting Equifax, where his score is the lowest, but has made no headway. He hasn’t been able to connect with the bureau on the phone. Even after mailing paperwork he says proves he didn’t make those charges, he says they have yet to be removed.

Daryl Toor, a spokesman for Equifax, says the bureau is focused on resolving disputes, though due to a variety of factors not often in its control, the amount of time it takes to help a consumer get resolution can vary.

Credit scores are determined by the information in consumers’ credit reports. Those reports aren’t always accurate and the repercussions can be severe: an error or fraudulent charges that are left unpaid can result in a lower credit score, which can derail borrowers’ attempts at getting credit. A report by consumer advocacy group U.S. Public Interest Research Group in 2004 found that 79% of credit reports contained an error. A separate report last year by the Policy Economic Research Council, which is funded by the credit industry, found approximately 0.5% of credit reports had material errors. The Federal Trade Commission will release its report on credit report accuracy later this year.

Debt counseling groups say they deal with errors often. “We probably see someone once a week who has something on their credit report reported incorrectly,” says Melissa Whittaker, branch manager at Augusta, Ga. nonprofit Consumer Credit Counseling Service. She says it’s often a creditor that hasn’t updated a late payment that was received, medical bills that patients assume their insurance has covered, or cases of identity theft.

This month, the Consumer Financial Protection Bureau announced plans to supervise the major credit reporting bureaus, such as Equifax, Experian and TransUnion, starting this fall. The CFPB says the move is partly in response to consumer filings about errors on credit reports.

9. “Our numbers don’t add up.”

The average FICO score — the number most lenders use to gauge a potential borrower’s credit-worthiness — stood at 690 in April, according to data released in July. That is roughly in line with both last year’s average score and the average in 2007, before the market meltdown and recession wiped out many Americans’ wealth.

Many credit pros say that data doesn’t make sense. Since 2007, nearly nine million homes have gone into foreclosure and over six million people have filed for personal bankruptcy — events that typically send FICO scores tumbling. Borrowers who previously had high FICO scores (above 750) may see their scores drop by more than 200 points in such events, says Ulzheimer. “Something stunning isn’t showing up in the data,” says Anthony Sanders, a professor of finance at George Mason University, who studies credit scores.

FICO defends its calculations. There are roughly 200 million U.S. consumers with a FICO score, so in order for the average score to change more noticeably, a much larger number of consumers on one end need to be affected, says Anthony Sprauve, a spokesman for myFICO.com, the consumer division of FICO. In addition, over the past several years, even though the average has stayed roughly the same, more consumers have moved away from the middle in both directions, Sprauve says. There are “two opposing forces at play,” Sprauve says.

10. “You can game the system.”

For years, financial planners have told their clients to pay off their debts before signing up for a mortgage. With less debt, they’ll have a better shot at having a higher credit score, which would in turn lead to a lower interest rate on their home loan. But just how much a certain action would boost their score was unknown to the consumer until after they actually implemented it.

Much of that mystery is gone now. A credit management software company in Baltimore, Md., called CreditXpert offers a simulator where consumers can plug in their credit information and run what-if tests, like paying down debt on one credit card or paying off a student loan to see to what degree each action could impact their credit score. David Chung, managing director of CreditXpert, says mortgage loan officers and brokers are using this system to help their clients. After reviewing an applicant’s credit scores, they run theoretical scenarios on CreditXpert’s simulator to see if paying down a certain debt (or another action) will raise a borrower’s credit score enough to qualify for a lower rate.

The incentive for the mortgage officers, he says, is to close the loan rather than lose it to a competitor, and to possibly gain referrals from satisfied customers. Donnelly, of the Mortgage Bankers Association of Washington, D.C., says some lenders don’t encourage their loan officers to use this since it could be seen as gaming the system. FICO’s Sprauve says the only simulator that’s based on the FICO scoring model is on its web site.

 

By ANNAMARIA ANDRIOTIS

http://www.smartmoney.com/borrow/credit-cards/10-things-credit-scores-wont-say-1343613009781/

 

Concerned how your damaged credit is affecting your job search?

November 20, 2014 by · 3 Comments 

It’s true that many companies assess a job candidate’s report before hiring, and having one that looks terrific rather than awful can work in your favor. But why would an employer pull your report in the first place?

They’d do it because they’re looking for objective insight into your character, financial responsibility and overall level of stability. After all, you may say you’re a perfectionist, but if they see a bunch of unpaid bills on your credit report, those words may not mean much.

Still, your concerns about the impact of your credit reports may be having at this stage may be unfounded, especially if you’ve yet to be invited in for a face-to-face interview.

There are many myths surrounding credit reports and employment.

Employers don’t randomly access credit reports from all job applicants. They only do so for those who are solid candidates. If they are pulling it, congratulations! They are doing a background check, and that is good news, as they are seriously considering you for the position. They won’t run it before you are a finalist. Not all occupations or industries are checking credit reports for new hires either. Most employers are looking at credit reports for people applying for positions that are clearly related to finance or have access to cash or credit. And in general, they don’t access credit reports for people applying for minimum wage jobs.

The only way an employer can pull your report is with your permission.

Do know, though, that a potential employer does not have access to the same type of reports that lenders do. The reports employers can see never include your credit scores or list your date of birth. All they can view is your credit history. In addition, these reports are considered “soft inquiries” and will not show as a “hard inquiry” to anyone else viewing your reports.

As for the real impact of your credit damage, employers are very sensitive to the fact that credit reports are not perfect. And everyone in the world knows there is a recession, and employers take that into consideration. It’s a misconception that people are being blacklisted because of their credit reports. However, if the employer makes an adverse decision based on your report, you have a right to know about it and get a copy of the report they used.

 

Military Members-Using a Credit Card Responsibly

November 19, 2014 by · Leave a Comment 

Using a Credit Card Responsibly

Military members are more likely to have a credit card than civilians.

They’re also less likely to pay their balance in full.

Those findings come from a 2010 survey conducted by the FINRA Investor Education Foundation. They also suggest that some military members may be struggling to stay afloat financially.

Credit cards come in handy for several types of purchases, but not for everything.

Carrying credit card balances can harm your credit score and make it difficult to secure car loans, home mortgages and other financial tools. And that means it’s important for U.S. service members and veterans to consider what charges, if any, they should put on a credit card.

Here are some major Do’s and Don’ts when it comes to using credit responsibly:

Don’t

  • Use a credit card to buy everyday things like groceries. If it’s a good that doesn’t last long or doesn’t cost three figures, then it probably doesn’t need a credit card to be bought.
  • Run your credit card to buy vices, such as alcohol.
  • Withdraw cash against your credit card. That’s an easy, quick way to build a large balance.

Do

  • Charge your credit card in the case of emergencies for unexpected travel, car, home or medical issues. These include airplane tickets, car rentals, hotel rooms and tradesman services such as plumbers or electricians.
  • Use a card that earns you worthwhile rewards. Some of the expenses listed above–airfare, car rentals and hotel reservations–often earn reward points or cash back.
  • Swipe your card when it can insure you against poor service. When paying for a service, such as plumbing work, a credit card can protect you against faulty work.
  • Use your card for expensive goods, online purchases, concert or sports tickets and gas.

Delivery insurance and protections against damaged or lost products are major benefits of buying with a credit card. Some credit card companies offer rewards for tickets, but find out which events are part of the rewards program. The same goes for gas purchases, which might earn 3 to 5 percent cash back.

Spend wisely and only when you know you’ll be able to pay off the balance without accruing interest or late fees. Know what to buy and what not to buy while keeping your cards’ balances at or below 30 percent of their credit limit.

Posted by Christian Loscial

 

Is your credit file thin? Try these steps to creating a good file

November 18, 2014 by · Leave a Comment 


Apply Now for a Public Savings Secured Visa

 

•Add an authorized user acct
Ask a friend/relative/business partner to add your name to one of their good credit card accts as an authorized user. This enables their good credit acct to reflect on your credit report and you automatically have their years of good paying history. This is an overnight success for your credit score. (Normally takes 30 days to get on the report.) Although it is good for score, lenders know that this is not your account and has no benefit through the lenders’ eyes.

• **Open a secured credit card account like the one above. This card is set up with no credit check. This account will take 4- 6 months to mature, but is a good way to invest in your credit. Try with your local bank to see if they offer one of these. Otherwise, go to credit cards.com click on left side column that says “cards for bad credit”. Open one of these to begin your credit history. Make sure you pick one that has the best deal for you financially, but more importantly, one that reports to all 3 credit bureaus.

• The 3rd option is something our company offers. For a fee of $495, we can have a credit account added to your report with a $5000 limit. This can only be used at an online e-books store and is set up for automatic approval.

• Whenever you add a new account to your credit report, the account needs time to age and add points to your scores. Generally, 4-6 months is that time frame.

 

8 credit score myths debunked

November 17, 2014 by · Leave a Comment 

8 credit score myths debunked

Misconceptions abound when it comes to the ways credit scores are determined. Here are some of the more egregious falsehoods surrounding the process

Myth No. 1

Every inquiry for credit costs five points

Fact No. 1

There is no fixed set number of points that a credit inquiry will cost. Generally speaking, inquires make a relatively minor contribution to overall scores. (up to 10%)

Myth No. 2

Part of my credit scores is calculated based on where I live.

Fact No. 2

Credit score calculations do not factor in where you live (city or ZIP code, for example). Effectively managing your credit, on the other hand, will result in higher scores — regardless of whether you live in Beverly Hills, Calif., or Zanesville, Ohio.

Myth No. 3

A bankruptcy will haunt my credit scores forever.

Fact No. 3

While most negative information must be removed from your credit report after seven years, the Fair Credit Reporting Act allows bankruptcy to be listed on your credit report for up to 10 years. It’s true a bankruptcy will negatively affect your scores, though the impact on your scores lessens over time as the bankruptcy ages

Myth No. 4

A short sale has less of an impact on a credit score than a foreclosure.

Fact No. 4

The presence of either a foreclosure or short sale information on a credit bureau report is considered negative, as it is predictive of future credit risk. Generally speaking, both will have a similar impact on a credit score. It’s what you had before the default that matters most (Good credit).

Myth No. 5

Making a lot of money results in higher credit scores.

Fact No. 5

Your income does not have a direct impact on credit bureau scores, as your income information is not recorded on your credit report. The scores focus on how you manage your credit, not on how you could manage your credit given your income.

Myth No. 6

Going to a credit counseling agency will hurt my scores

Fact No. 6

Not true. An indication that you are working with a professional credit counselor will not, in and of itself, hurt your credit scores. However, negotiated settlements on balances owed to your creditors may affect your scores if the lenders report them as such.

Myth No. 7

Carrying smaller balances on several credit cards is better than having a large balance on just one card.

Fact No. 7

Not always. A credit score will often consider the number of accounts or credit cards you carry that have a balance, in addition to your overall utilization of available credit. Thus, you may lose points for having a higher number of accounts with balances

Myth No. 8

850 is the perfect credit score.

Fact No. 8

While 850 may be the highest FICO score, it is not a “perfect” score. The “perfect score” is what a lender requires to approve you for the credit and credit terms you are seeking.

By Tom Quinn, for Credit.com

Credit Repair: The Truth About What Can and Cannot be Done

November 14, 2014 by · 1 Comment 

Credit Repair: The Truth About What Can and Cannot be Done

Contrary to what the credit bureaus would like you to believe, credit repair does work and can
work for 100% of people in most circumstances. This is, of course, provided you are getting the
best advice and have an experienced professional working on your case.
Any one with a credit score below 720 can benefit long-term from the advice and information
provided through credit repair; however, there are times when your own limitations make
adhering to this advice impossible. The two limiting factors are: (1) your financial situation and (2)
the time frame within you need to reach your results. It is possible to remove anything from a
credit report, even accurate items, if the creditor does not adhere to the law the outlines what
needs to be done and by when. Just because you have a certain type of account removed at one
time does not mean other, similar items are going to be able to be removed, even with the same
circumstances. A hit-or-miss aspect exists in credit repair, because credit repair relies not only
on the strategies of the person attempting to repair the credit, but also on the effectiveness or
ineffectiveness of the creditors and credit bureaus in adhering to the laws. Sometimes you want
the creditor and credit bureaus to follow the law, sometimes you don’t-it all depends on
your particular situation.
The reason credit repair has received such a bad name is due to the abundance of scam
artists who flock to the easy money made available by people desperate for this type of service.
This unfortunate reality leads the credit bureaus and the FTC to make blanket, untrue statements
such as, “Credit repair does not work ever and there is nothing a credit repair company can do for
you that you can’t do for yourself.” Given that more than 80% of credit repair companies are scam
artists, promising the world and then disappearing when you pay, the credit bureaus and the FTC
are forced to make such bold statements. It would be impossible for them to explain the truth to
consumers without causing them to make a bad choice that would result in the getting scammed.
As a result, the credit bureaus and the FTC must adhere to the “credit repair does not work”
position.

As I have stated, credit repair does work, but…don’t let anyone tell you that credit repair is effective every time. Its success varies with the number of players in the game, some of whom never perform consistently. Even if you have a true master of credit repair on your side, you have to take into account that sometimes the other players perform in a way that throws your master off his game. Take Kobe Bryant. Although he has the ability to win every game for his team, there are going to be times when the other team has a formation that takes him off his game and causes his results to be less than optimal. Given that fact, you still cannot predict to any level of certainty whether or not he will perform well or poorly the next time he faces that team. Credit repair is similar. Sometimes the opposing side shows up strong, other times they don’t. Even if you follow the same approach with every situation that arises when doing credit repair, your results will still vary due to the other players involved. So the next time someone tells you they can get everything repaired on your credit, run the other way, because, at best, the pendulum will swing widely both ways for the same situation.

Credit repair limitations occur almost 100% of the time under the following situations. These situations make it nearly impossible for credit repair to help someone needing results within six months to a year. Please keep in mind even when you can’t be helped in the short term, the advice that can be given now, if coming from a professional, can prevent you from making a mistake in the near future that may worsen your situation. Here are examples of situations where not much can be done with-in a six to twelve month period.

1. If more than 50% of the negative accounts showing on the credit report appear as unpaid collections, charge-offs, repossessions, or foreclosures and you do not have the money to either pay the accounts in full or settle them. Due to the negative accounts remaining unpaid, these items will simply reappear on your report once removed. Any negatives, even unpaid accounts, can be removed-but, unless the negative account is current, paid or settled, it will simply reappear in 10-90 days.

The only way to prevent this is to bring the account current by paying the past due amount, or, in the case of a collection, charge-off, repossession, or foreclosure, pay the balance in full or settle it for pennies on the dollar. Unpaid accounts that do not have collection, charge-off, repossession or foreclosure status require only that the past due balance be paid to be considered current. Unless the negative account is a public record, the only way to keep it from being re-reported is to make sure the status is “current, paid, settled, transferred or sold.” In other words, if deleted, any negative account that does not show one of those five statuses will most likely get re-reported, unless the account is a public record.

Public records are the only negative items that do not need to be paid to prevent re-reporting. Because they are only reported once, public records, such as unpaid judgments and tax liens, can remain unpaid and yet will not reappear once they are removed. In fact, the only time they reappear is when the initial reason for removal was the public record agency failing to respond the credit bureaus’ verification request with-in the 30 day period outlined by the Fair Credit Reporting Act, in which case the credit bureau would reinsert the public record if and when the public record agency responds to the credit bureaus after that 30 day period.

2. Credit repair is nearly impossible if you can’t pay your minimum monthly payments and you keep adding new late payments to your report. This is a “spinning wheels” scenario that rarely yields much improvement to your credit score.

In conclusion, you can repair your credit if you hire a pro and listen to his or her professional advice. The effectiveness of the credit repair depends not only on the skill of the professional you hire and your ability to cooperate with his or her advice, but also, a little luck.

 

Why Credit Repair?

November 13, 2014 by · Leave a Comment 

“If you think nobody cares if you’re alive, try missing a couple of car payments.” Earl Wilson

What’s your score? How healthy is your credit? Are you sure about that?

As a credit restoration business, we are often amazed that people have no clue what their credit profile looks like until they get turned down for a loan. They have no idea as to why a clean credit history and high scores are necessary. Let’s take a minute to see what one has to lose by not having a good credit history.

For starters, having good credit will help determine whether or not you will get the financing you are seeking. When you apply for a loan, whether a mortgage, car loan or new credit card, your lender is going to check your credit to get an idea of whether you’ve been responsible with your use of credit in the past. They will also evaluate your current financial position. They will want to see if you are currently paying your bills on time, in order to decide whether you have the ability to carry the loan you are trying to acquire. If your credit history or your credit scores are in bad shape, then the prospective lender is all but guaranteed to deny your application.

If you have bad credit and you somehow get lucky enough to acquire a new loan, you better believe that loan is going to come with highly unfavorable terms. Specifically, the loan you receive is going to come attached with a very high interest rate. A high interest rate hurts your financial position in two ways:

  • Your monthly payments will be considerably higher
  • A high interest rate compounds over time, so when you finally pay off your loan you will have spent 2 or 3 times more than you would have if you had qualified for a lower interest rate

As if these financial realities weren’t bleak enough, your credit plays an increasingly important role in seemingly unrelated areas of your life. For example, poor credit is now being used as a disqualifying factor for everything from getting a job to acquiring a new apartment as well as determining the rates you receive for various insurances.

All of this is to say nothing about the emotional toll that poor credit will have on you with. Guilt and feelings of being out of control, will add to the financial burden of poor credit. When you take these factors into consideration, it’s clear improving your credit is one of the wisest decisions you will ever make.

The ever important part of all of this is to take that first step. It is but 1 step that begins the journey of 100 miles. Let us help you through your journey as guided support. Call us today at (909) 570-9048 to learn how you can reach your goals.

 

Why credit scores are different

November 7, 2014 by · Leave a Comment 

 

 

 

 

 

 

 

 

Many consumers go beyond getting their free annual credit report from the nationwide credit reporting agencies, Equifax, Experian and TransUnion. These consumers pay for monthly subscriptions to a credit monitoring service with the goal of knowing their credit score at any point in time and receiving alerts when someone uses their personal information or accesses their credit history. It takes many people by surprise when they purchase credit scores just before applying for credit only to find the lender’s credit score disclosure does not match. Why is that the case, and what can you do?

What Credit Scores Tell Consumers and Lenders
Credit monitoring services and nationwide credit reporting agencies make money by selling credit scores to consumers, lenders and other businesses that use credit scores for decision-making. You, as a buyer, borrower or consumer, can buy educational credit scores from a credit monitoring service. Educational credit scores help you prepare to apply for loans, manage your debts and eliminate fraud or identity theft. Mortgage lenders, auto loan companies, credit card providers, insurance companies, landlords and employers buy credit scores from credit reporting agencies. Credit scores help them determine if you will pay your bill on time, in full, every month; predict if and when you might fall delinquent on your accounts; or evaluate if and when you are likely to default on your credit obligations. Whatever they’re being used for, credit scores should be based on the same information for both lender and customer, so why are scores from different sources so different? Two reasons credit scores differ are discrepancies in reporting methods and different scoring models.

Issues with Reporting Methods
Common discrepancies in reporting methods include:

  • Consistency – not all data furnishers give information to all credit reporting agencies.
  • Timing – data furnishers may provide the same information to all agencies but at different time schedules.
  • Accuracy – changing personal information, i.e. names or addresses, has to be matched to the correct credit file.
  • Privacy – Credit reporting agencies do not cross-share details on inquiries and information with each other.

Lenders and other creditors can choose what information to report, when to report it and which agencies to report to. Some lenders report monthly to all three agencies. Other creditors, like collection agencies, may report quarterly or only when there is activity on your account. Some agencies only report to a single credit reporting agency. A one-week difference in reporting information to the agencies could make a difference in your score from each one. Since reporting agencies do not cross share information with each other, the report and score you buy may not contain the same information that the lender report and score contains.

Scoring Models
Each credit reporting or monitoring agency uses a different method to calculate your score. They base these calculations on complex mathematics, statistical or algorithmic models. Scoring models are proprietary systems and are protected by trademarks, patents and copyrights.

There are three types of credit scores that credit providers purchase:

  • Generic scores – predict general payment performance
  • Industry scores – predict performance on specific type of credit
  • Custom scores – predict performance by company’s customer base

Generic credit scores are used by credit monitoring services to educate you, the consumer. You can use a credit monitoring service to learn how to get your score from what it is today to where you need it to be in the future. You can also use this service find out how late payments, opening new accounts or paying off debts may change your scores over time. Again, these are educational items and there is no guarantee you will achieve a certain score at any time.
Industry credit scores tell, for example, car lenders how you have paid your car loan, but that score may be different from a mortgage or credit card score. If you have had an automobile repossession, your auto industry score may be low in comparison to your mortgage industry score if you have never had mortgage delinquencies. Lenders may have their own in-house system to calculate a custom score based on their specific credit products and customer base. These scores often rank you in comparison to other customers and may work more like a grading curve than a general purpose credit score.

Take an Active Role in Providing Your Own Credit Information
You cannot control what credit scores you or a lender will get at any time, but you can know what information is in your credit file and keep it up to date. Make sure your name, address, birth date, Social Security number and employment information are current and correct. If you have a common name make sure other people’s information is not in your credit report. If you have received collection agency notices, check for reporting with the original creditor. Duplicate items can affect your credit score. When you correct or dispute an item, make sure you do it with all three bureaus, Equifax, Experian and TransUnion.

The Bottom Line
Finally, educate yourself about the different types of credit scores, credit reporting agencies and credit monitoring services in the market. Visit their websites to learn about their scores and services. Here is a list of providers most often used by consumers and industry.

CreditXpert Score Affinion www.privacyguard.com www.identitysecure.com
Experian PLUS Score Experian www.experian.com www.freecreditscore.com www.freecreditreport.com www.familysecure.com
Equifax Credit Score Equifax www.equifax.com
FICO Score EquifaxFICO www.equifax.com www.myfico.com
VantageScore TransUnionVertrue www.transunion.com www.truecredit.com www.privacymatters.com
www.freescore.com
www.creditdiagnosis.com
www.creditadapter.com

Read more @:sfgatedotcom

 

 

10 Ways to Protect Yourself From ID Theft

November 6, 2014 by · Leave a Comment 


10 things to know about ID theft

You can protect yourself against identity thieves by understanding how they work, then taking the appropriate precautions with your credit card accounts.
Identity theft is often in the news, but there are a lot of misconceptions swirling around about how to best protect yourself.
While some identity thieves focus on getting your credit cards and maxing them out before you even realize they’re missing, an increasing number are using one piece of information about you — often a credit card number — to steal your entire identity.
Though many folks worry about keeping their credit card information secure when shopping online, the top methods that identity thieves use to steal personal data are still low-tech, according to Justin Yurek, the president of ID Watchdog, an identity theft-monitoring firm. “Watch your personal documents, be careful to whom you give out your data over the phone, and be careful of mail theft,” he says.
Indeed, a February 2009 study by Javelin Strategy & Research found that of the 9.9 million identity-theft cases reported in 2008 — resulting in a loss of $48 billion — online theft accounted for only 11% of incidents. Stolen wallets, checkbooks and credit and debit cards made up almost half.
No one is immune to identity theft, but armed with a little knowledge about how identity thieves operate — and a little common sense — you can stay one step ahead of them.
1. Thieves don’t need your credit card number to steal it. Conversely, they don’t need your credit card to steal your identity. Identity thieves are crafty; sometimes all they need is one piece of information about you, and they can easily gain access to the rest. As a result, says Heather Wells, a recovery manager at ID Experts, an identity-protection company, it’s crucial to lock up important documents at home. “Secure birth certificates, Social Security cards, passports — in a safe deposit box or in a safe hidden at home,” she says. “And that includes credit cards when not in use.”
2. The nonfinancial personal information you reveal online is often enough for a thief. Beware of seemingly innocent personal facts that a thief could use to steal your identity. For example, never list your full birthdate on Facebook or any other social-networking website. And don’t list your home address or telephone number on any website you use for personal or business reasons, including job-search sites.
3. Be careful with your snail mail. “Follow your billing cycles closely,” says Lucy Duni, a vice president of consumer education at TrueCredit. “If a credit card or other bill hasn’t arrived, it may mean that an identity thief has gotten hold of your account and changed your billing address.” Al Marcella, a professor at Webster University’s School of Business and Technology in St. Louis and an expert on identity theft, suggests that when you order new checks, pick them up at the bank instead of shipping them to your home. “Stolen checks can be altered and cashed by fraudsters,” says Duni. And never place outgoing mail in your mailbox or door slot for a carrier to pick up. Anyone can grab it and get your credit card numbers and other financial information. Bring it to the post office yourself.
4. Review bank and credit card statements monthly — and preferably more often. Watch for charges for less than a dollar or two from unfamiliar companies or individuals. Thieves who are planning to purchase a block of stolen credit card numbers often first test to check that the accounts haven’t been canceled by aware customers. They do so by sending a small charge through, sometimes for only a few pennies. If the first charge succeeds, they’ll buy the stolen data and make a much larger charge or purchase. They’re guessing — often correctly — that most cardholders won’t notice such a tiny charge. In addition, many of the fraud alerts you can set on your accounts aren’t triggered by small dollar amounts. Reviewing your credit report on a regular basis is also a good idea, but usually by the time a fraudulent transaction reaches your credit report, it’s too late.
5. If an ATM or store terminal looks funny, don’t use it. “Make sure there is no device attached to any ATM card slot you use,” says Wells. “As a general rule, the mouth of a card receptacle on an ATM machine should be flush with the machine or have only a very slight lip.” If it looks or feels different when you swipe your card, or has an extra piece of plastic sticking out from the card slot, it may be a skimmer, an electronic device placed there by thieves that captures your credit card information when you swipe it. If you notice it after you’ve already inserted your card, you should alert your bank so it can watch for any fraudulent charges to your account.
6. Identity thieves love travelers and tourists. Scott Stevenson, the founder and CEO of Eliminate ID Theft, an ID theft protection company, said that when traveling, you should be alert to strangers hovering when you use a credit card at an ATM or phone, and to avoid public wireless Internet connections unless you have beefed-up security protection.
7. Identity thieves are sneaky; you need to be sneaky, too. There are a few simple things you can do to protect your credit card in case it falls into the wrong hands. “Sign your credit card with a Sharpie so your signature can’t be erased and written over,” suggests Echo Montgomery Garrett, a writer in Marietta, Ga. Consultant Sarah Browne of Carmel, Calif., had all but one credit card stolen from a hotel room. The card that was spared still had the “please activate” sticker on it. Though Browne had activated the card, she forgot to remove the sticker. “The thieves must have known that you have to activate a new card from the phone number listed with the credit card company, so they didn’t bother with it,” she said. Since then, she leaves the activation stickers on all of her cards. Indeed, when a thief struck a second time at a public function, Browne’s stickered cards were again left untouched.
8. Pay attention at the checkout line. If a cashier or salesperson takes your card and either turns away from you or takes too long to conduct what is usually a normal transaction, she may be scanning your card into a handheld skimming terminal to harvest the information. Thieves don’t need a handheld scanner to capture your information. According to Mark Cravens, the “Anti-Scam Doctor” and author of “The Ten Commandments of Investing,” they can take a picture of the front and back of your card with a cellphone or merely swap out cards. “Look at your card when they hand it back and make sure it’s yours, and not another gold, silver, or blue card that looks like yours,” he says. “You may not notice they swapped your card for days.”
9. Go paperless in as many ways as possible. Sandy Shore, a training manager with Novadebt, a nonprofit, New Jersey-based credit-counseling agency, suggests clients cut back on the mail they receive from banks and financial institutions by discontinuing paper bills and statements. “Access your financial statements at the issuer’s website instead,” she says. This strategy has the added bonus of an environmental benefit. Similarly, Vaclav Vincalek, the president of Pacific Coast Information Systems, an IT security firm, recommends that whatever paper receipts and financial statements you do receive go through the shredder instead of into the wastebasket. “Never throw away a credit card slip,” he says. “Instead, shred anything that has any number, name, address on it.”
10. Identity theft insurance can pay off, but you need to read the fine print. Several companies offer identity theft insurance, which covers the money you shell out to repair your identity. This includes whatever you spend on phone calls, making copies of documents and mailing them, hiring an attorney and, in some cases, lost wages. However, the insurance — which costs about $50 a year — does not reimburse you for funds you lost. Your current homeowners policy may include identity theft insurance in your package, so check first before signing up with an outside company. Also, some companies are starting to offer identity theft insurance as an employee benefit.
This article was reported by Lisa Rogak for CreditCards.com

Credit 101 Part 3 Your Credit Profile

November 5, 2014 by · Leave a Comment 

 

This is part 3 in a series of videos on the basics of credit, that is Credit 101. What is your credit profile? How do we explain what makes up your scores? This is something that should be taught in high school. A brief explanation of credit. Interview between Adam Villaneda and Cesar Marrufo. Elite Financial, LLC credit repair in Yucaipa, California. Learn how to fix your bad credit report and position yourself to purchase a home. I do NOT own rights to this music and am not claiming that I do.