Here is something you need to know about opting out of those credit card offers ; aka Junkmail
Recently, we have received information from our clients about a data breach in the County of San Bernardino, State of California. Here are 4 steps to take if you feel you identity information has been breached…Direct from the FTC Website
Identity Crisis… What to Do If Your Identity is Stolen
“I don’t remember opening that credit card account. And I certainly didn’t buy those items I’m being billed for.”
Maybe you never opened that account, but someone else did…someone who used your name and personal information to commit fraud. When an imposter co-opts your name, your Social Security number (SSN), your credit card number, or some other piece of your personal information for their use – in short, when someone appropriates your personal information without your knowledge – it’s a crime.
The biggest problem? You may not know your identity’s been stolen until you notice that something’s amiss: you may get bills for a credit card account you never opened; your credit report may include debts you never knew you had; a billing cycle may pass without your receiving a statement; or you may see charges on your bills that you didn’t sign for, didn’t authorize, and don’t know anything about.
First Things First
If you’re a victim of identity theft, the Federal Trade Commission (FTC), the nation’s consumer protection agency, recommends that you take the following four steps as soon as possible, and keep records of your conversations and copies of all correspondence.
1. Place a fraud alert on your credit reports, and review your reports.
Fraud alerts can help prevent an identity thief from opening any more accounts in your name. Contact the toll-free fraud number of any of the three nationwide consumer reporting companies to place a fraud alert on your credit report. You need to contact only one of the three companies to place an alert. The company you call is required to contact the other two, which will then place an alert on their versions of your report.
- TransUnion: 1-800-680-7289; www.transunion.com; Fraud Victim Assistance Division, P.O. Box 6790, Fullerton, CA 92834-6790
- Equifax: 1-800-525-6285; www.equifax.com; P.O. Box 740241, Atlanta, GA 30374- 0241
- Experian: 1-888-EXPERIAN (397-3742); www.experian.com; P.O. Box 9554, Allen, TX 75013
Once you place the fraud alert on your file, you’re entitled to order free copies of your credit reports; if you ask, only the last four digits of your SSN will appear on your credit reports. Once you get your credit reports, review them carefully. Look for inquiries from companies you haven’t contacted; accounts you didn’t open; and debts on your accounts that you can’t explain. Check that information like your SSN, address(es), and name or initials are correct. If you find fraudulent or inaccurate information, get it removed. See the FTC’s comprehensive identity theft recovery guide, Take Charge: Fighting Back Against Identity Theft, at www.ftc.gov/idtheft to learn how. Continue to check your credit reports periodically, especially for the first year after you discover the identity theft, to make sure no new fraudulent activity has occurred.
There are two types of fraud alerts: an initial alert and an extended alert.
n An initial alert stays on your credit report for at least 90 days. You may ask that an initial fraud alert be placed on your credit report if you suspect you have been, or are about to be, a victim of identity theft.
- An initial alert is appropriate if your wallet has been stolen or if you’ve been taken in by a “phishing” scam. Phishing occurs when scam artists steal personal information from you by sending email that claims to be from a legitimate company and says you have a problem with your account. When you place an initial fraud alert on your credit report, you’re entitled to one free credit report from each of the three nationwide consumer reporting companies.
- An extended alert stays on your credit report for seven years. You can have an extended alert placed on your credit report if you’ve been a victim of identity theft and you provide the consumer reporting company with an “identity theft report.” When you place an extended alert on your credit report, you’re entitled to two free credit reports within twelve months, after placing the alert, from each of the three nationwide consumer reporting companies. In addition, the consumer reporting companies will remove your name from marketing lists for prescreened credit offers for five years unless you ask them to put your name back on the list before then.
To place either of these alerts on your credit report, or to have them removed, you will be required to provide appropriate proof of your identity, which may include your SSN, name, address, and other personal information the consumer reporting company requests.
When a business sees the alert on your credit report, they must verify your identity before issuing you credit. As part of this verification process, the business may try to contact you directly. This may cause some delays if you’re trying to obtain credit. To compensate for possible delays, you may wish to include a cell phone number, where you can be reached easily, in your alert. Remember to keep all contact information in your alert current.
The Identity Theft Report
An identity theft report may have two parts:
Part One is a copy of a report filed with a local, state, or federal law enforcement agency like your local police department, your State Attorney General, the FBI, the U.S. Secret Service, the FTC, or the U.S. Postal Inspection Service. When you file a report, provide as much information as you can about the crime, including anything you know about the dates of the identity theft, the fraudulent accounts opened, and the alleged identity thief.
Part Two of an identity theft report depends on the policies of the consumer reporting company and the information provider (the business that sent the information to the consumer reporting company). They may ask you to provide information or documentation to verify your identity theft in addition to that included in the law enforcement report. They must make their request within 15 days of receiving your law enforcement report, or, if you already have an extended fraud alert on your credit report, the date you submit your request to the credit reporting company for information blocking. The consumer reporting company and the information provider then have 15 more days to work with you to make sure your identity theft report contains everything they need. They are entitled to take five days to review any information you give them. For example, if you give them information 11 days after they request it, they do not have to make a final decision until 16 days after they asked you for that information. If you give them any information after the 15-day deadline, they can reject your identity theft report as incomplete, and you will have to resubmit it with the correct information.
Most federal and state agencies and some local police departments offer only “automated” reports – a report that does not require a face-to-face meeting with a law enforcement officer. Automated reports may be submitted online, or by telephone or mail. If you have a choice, do not use an automated report. The reason? It’s more difficult for the consumer reporting company or information provider to verify the information. Unless you are asking a consumer reporting company to place an extended fraud alert on your credit report, you probably will have to provide additional information or documentation if you use an automated report.
2. Close the accounts that you know, or believe, have been tampered with or opened fraudulently.
Call and speak with someone in the security or fraud department of each company. Follow up in writing, and include copies (NOT originals) of supporting documents. It’s important to notify credit card companies and banks in writing. Send your letters by certified mail, and request a return receipt so you can document what the company received and when. Keep a file of your correspondence and enclosures.
When you open new accounts, use new Personal Identification Numbers (PINs) and passwords. Avoid using easily available information like your mother’s maiden name, your birth date, the last four digits of your SSN or your phone number, or a series of consecutive numbers.
If the identity thief has made charges or debits to your accounts, or to fraudulently opened accounts, ask the company for the forms to dispute those transactions. Also request the transaction records relating to the identity theft, such as the fraudulent credit application.
Once you have resolved your identity theft dispute with the company, ask for a letter stating that the company has closed the disputed accounts and has discharged the fraudulent debts. This letter can help you if errors relating to this account reappear on your credit report or you are contacted again about the fraudulent debt.
3. File a report with your local police or the police in the community where the identity theft took place.
Then, get a copy of the police report or at the very least, the number of the report. It can help you deal with creditors who need proof of the crime. If the police are reluctant to take your report, ask to file a “Miscellaneous Incidents” report, or try another jurisdiction, like your state police. You also can check with your state Attorney General’s office to find out if state law requires the police to take reports for identity theft. Check the Blue Pages of your telephone directory for the phone number or check www.naag.org for a list of state Attorneys General.
4. File a complaint with the Federal Trade Commission.
By sharing your identity theft complaint with the FTC, you will provide important information that can help law enforcement officials across the nation track down identity thieves and stop them. The FTC can refer victims’ complaints to other government agencies and companies for further action, as well as investigate companies for violations of laws the agency enforces.
You can file a complaint online at www.ftc.gov/idtheft, by phone at 1-877-IDTHEFT (438-4338); TTY: 1-866-653- 4261, or by mail: Identity Theft Clearinghouse, Federal Trade Commission, 600 Pennsylvania Avenue, NW, Washington, DC 20580. Be sure to call the Hotline to update your complaint if you have any additional information or problems.
Next, Take Control
Although identity thieves can wreak havoc on your personal finances, there are some things you can do to take control of the situation. Here’s how to handle some of the most common forms of identity theft.
If an identity thief has stolen your mail for access to new credit cards, bank and credit card statements, pre-approved credit offers, and tax information or falsified change-of-address forms, (s)he has committed a crime. Report it to your local postal inspector.
If you discover that an identity thief has changed the billing address on an existing credit card account, close the account. When you open a new account, ask that a password be used before any inquiries or changes can be made on the account. Avoid using easily available information like your mother’s maiden name, your birth date, the last four digits of your SSN or your phone number, or a series of consecutive numbers. Avoid the same information and numbers when you create a Personal Identification Number (PIN).
If you have reason to believe that an identity thief has accessed your bank accounts, checking account, or used your ATM card, close the accounts immediately. When you open new accounts, insist on password-only access. If your checks have been stolen or misused, stop payment. If your ATM card has been lost, stolen, or otherwise compromised, cancel the card and get another with a new PIN.
If an identity thief has established new phone or wireless service in your name and is making unauthorized calls that appear to come from – and are billed to – your cellular phone, or is using your calling card and PIN, contact your service provider immediately to cancel the account and calling card. Get new accounts and new PINs.
If it appears that someone is using your SSN when applying for a job, get in touch with the Social Security Administration to verify the accuracy of your reported earnings and that your name is reported correctly. Call 1-800-772-1213 to check your Social Security Statement.
If you suspect that your name or SSN is being used by an identity thief to get a driver’s license, report it to your Department of Motor Vehicles. Also, if your state uses your SSN as your driver’s license number, ask to substitute another number.
Once resolved, most cases of identity theft stay resolved. But occasionally, some victims have recurring problems. To stay on top of the situation, continue to monitor your credit reports and read your financial account statements promptly and carefully. You may want to review your credit reports once every three months in the first year of the theft, and once a year thereafter. Stay alert for other signs of identity theft, like:
- failing to receive bills or other mail. Follow up with creditors if your bills don’t arrive on time. A missing bill could mean an identity thief has taken over your account and changed your billing address to cover his tracks.
- receiving credit cards that you didn’t apply for.
- being denied credit, or being offered less favorable credit terms, like a high interest rate, for no apparent reason.
- getting calls or letters from debt collectors or businesses about merchandise or services you didn’t buy.
Get Your Credit Report
Order a copy of your credit report from the three nationwide consumer reporting companies every year to check on their accuracy and whether they include only those debts and loans you’ve incurred. This could be very important if you’re considering a major purchase, such as a house or a car.
An amendment to the federal Fair Credit Reporting Act requires each of the major nationwide consumer reporting companies to provide you with a free copy of your credit reports, at your request, once every 12 months.
To order your free annual report from one or all of the nationwide consumer reporting companies, visit www.annualcreditreport.com, call toll-free 1-877-322-8228, or complete the Annual Credit Report Request Form and mail it to: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281. The form is at the back of this brochure; or you can print it from ftc.gov/credit. Do not contact the three nationwide consumer reporting companies individually. They provide free annual credit reports only through www.annualcreditreport.com, 1-877-322-8228, and Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281.
For more information, see Your Access to Free Credit Reports at ftc.gov/credit. The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint or to get free information on consumer issues, visit ftc.gov or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.
Chart Your Course of Action
The FTC works to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot, stop and avoid them. To file a complaint or get free information on consumer issues, visit ftc.gov or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. Watch a video, How to File a Complaint, at ftc.gov/video to learn more. The FTC enters consumer complaints into the Consumer Sentinel Network, a secure online database and investigative tool used by hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.
Do you know what type of information is on your credit report?
With all the credit reporting and scoring advice circulating the internet, sometimes it’s refreshing — and helpful — to just get down to the very basics. Namely: what exactly is in your credit report, and what isn’t?
Credit reports are generally broken down into five to seven areas, depending on what credit report you’re looking at and whether it’s a “consumer” version or a “users” version. Here’s are the sections and what you’re likely to find in each:
Personal Identification Data
This is where you’re going to find your name, any variations of your name, current and former addresses, date of birth, social security number, and perhaps your current or previous employer.
This is a list of who pulled your credit reports and on what date. The “consumer” version of the credit report is going to have all of your inquiries. The “user” version is only going to have hard inquires.
There is a separate section on a credit report for 3rd party collections. This is not the internal collection department at your bank or credit card issuer. This is when your creditors have either sold or consigned your delinquent debts to an outside company for collection efforts.
The trade section is going to make up the bulk of your credit report. This is where all of your accounts with lenders are going to show up. Some times they’re called “trade lines” as well.
On some old credit report formats the Public Records’ section also houses 3rd party collections despite the fact that a collection is hardly a public record. In the newer consumer versions they are called out as their own unique item leaving the public record section to only house liens, judgments and bankruptcies.
You might not know this but you have the right to add a short statement to your credit reports. In most states this is limited to no more than 100 words so you’ll need to bust out your best Twitter or text messaging skills to fit an explanation of why you stopped paying on your credit cards.
So now that we know what you WILL see on your credit reports, let’s address what you probably won’t see on your credit reports.
Under most circumstances you won’t see…
These were reported at one time but only when they went delinquent. Do you remember when gyms would sign people up for 3-5 year contracts and if you decided you were buff enough and cancelled they’d try and hit you up for the full amount?
You won’t normally see your gas, power, cable, or telephone service account on your credit reports while they’re in good standing. There are some exceptions. I’ve seen NICOR accounts on credit reports reporting month after month just like any other loan. NICOR is a gas provider in Illinois. Most of the time if you see these types of accounts on a credit report it’s because they’ve been sent to collections and the collector is reporting it.
You’ll rarely, if ever, see your rental payments on your credit report because most landlords don’t have accounts with the credit reporting agencies and they are unable to report. Even if you are living in an apartment complex with hundreds or thousands of units it’s unlikely you’ll ever see the payments on your credit reports. Of course if you default on your lease they’ll turn it over to a collection agency and you’ll see that on your credit reports lickety split.
Almost all insurance companies will allow you to pay your insurance premium in installments. I’m quite certain most people would consider that a form of extending credit, and I’d agree with them. However, insurance companies do not report the installment payments to the credit reporting agencies. If you don’t pay them they’ll just cancel your coverage. And of course driving without insurance is illegal. Talk about the ultimate leverage over their borrowers!
by JohnUlzheimer for Mint.com
How Can I Stop The Credit Card Offers?
Everyday millions of consumers get home from work to find a small stack of credit card offers in their mailbox. These offers, many of them from the same credit card issuers who sent you an offer last month, purport to offer you new credit cards. These are called “pre-approved offers of credit” and account for hundreds of millions of dollars in revenue not for the credit card issuers…but for the credit reporting agencies.
The credit reporting agencies, in addition to selling credit reports and credit scores, sell lists of consumer names and addresses to credit card issuers so they can send you those offers. The list of consumers has been “screened” by the credit reporting agencies and meets certain minimum credit score requirements. For example, a bank can buy a list of consumers who have FICO scores greater than 650, thus eliminating very risky prospective customers.
Thankfully there is a way to have your name removed from those screened lists. And, even better news, it’s free to do so. By going to this site you can have your name removed for 5 years or even permanently. But don’t worry, you can always opt back in if your mailbox starts having separation anxiety.
Opting out is easy, but giving out the amount of information you’ll be asked to give is going to be hard. You’ve got to provide your name, address, Social Security Number, Date of Birth and your phone number. They need this information to ensure the correct credit file has been “blocked” for screening purposes.
Some people don’t like the opting out idea because they can get a proxy of their credit scores by the offers they’re receiving. For example, if you’re getting Platinum style offers then you’ve got great credit scores. If you’re getting “classic” card offers with limits of “up to” $1,000 then your scores aren’t that great.
Just because you’ve opted out it doesn’t mean you’re going to stop getting offers. First off, your name is probably already on several pre-screened lists and you can’t get your name off of them after the list has been delivered to the lender. And, opting out just gets your name removed from screened lists sold by the credit bureaus. It doesn’t remove your name from other lists that are sold by other companies.
Finally, the website I sent you to is the legitimate unified “opt out” site sponsored by the national credit reporting agencies pursuant to Federal law. There are companies who, for a fee, will opt you out. Don’t get tempted into thinking you have to pay for this.
Here is a bit of information I found- By the Numbers
Credit-Savings-Mortgage, By The Numbers
That’s the credit score you need to qualify for the lowest interest rate on a new home or car. It makes a huge difference: On a $300,000 mortgage, someone with a score of 760 or higher could get the best rate of 3.24 percent, which works out to roughly $1,304 a month. But if your score drops 100 points, your payment will shoot up another $100. Ouch. The best ways to raise your number? Pay all your bills on time and pay down your debt–those two things make up 65 percent of your score. To make sure there are no errors dragging you down, get your credit reports annually from each of the major credit-reporting agencies (Experian, TransUnion, and Equifax) for free at annualcreditreport.com
This is the national average for credit card interest rates. If you’ve got a card in your wallet with a higher rate, pay that balance off first, because you’re getting slammed with major charges. The good news: Interest rates are generally negotiable. If you regularly pay at least the minimum on time, try haggling your way to a better rate, or consider moving the balance to your card with the lowest one–but do that only if you won’t get socked with hefty fees for the transfer.
That’s the maximum percentage of your take-home pay that should go toward housing, including mortgage payments, insurance, and property taxes. Pre-recession, many experts put the figure at 33 percent, but in this unpredictable job market, that’s too high. If you and your spouse make a combined $80,000, keep your new-home budget under $200,000. And if your housing expenses top the 25-percent mark, refinance your mortgage to lower your interest rate. You’ll feel a huge financial lift once you can truly afford the roof over your head.
That’s the amount to sock away each week in a savings account reserved for emergencies. You should have a six- to nine-month reserve in case you lose your job or face some other budget-blowing problem, but that goal can seem overwhelming. So start small with $50 a week. In one year, that’s more than $2,500 saved, which will put you ahead of many households. One recent poll found that roughly one in four Americans wouldn’t be able to come up with $2,000 in 30 days if they needed it. Start saving now.
The number of savings goals you should have. A recent University of Toronto study found that people who limit themselves to three goals under one theme–say, long-term saving–are three times more likely to say they’ll save than those who have myriad competing goals, such as retirement, a super-luxe vacation, a new home, and college funds for your kids. We say: Focus on retirement and an emergency fund, and the last one is up to you–so pick something worth it!
•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.
College and Your Credit
Life After High School: Credit Lessons They Won’t Teach You in College
Graduation season is just around the corner— a time when high school seniors across the country will walk down the aisle to accept their diplomas and officially enter the world of adulthood. Many of these smart young adults will spend the next four plus years in college, working hard to earn a degree and all the benefits that a bright and successful future has to offer.
Every year I make it a point to speak with high school seniors heading off to college, and every year my message remains the same. In school, you can screw up on a test and if you study hard and focus, you can make up for it on the next test. If you screw up on a mid-term, you can study harder and make up for it on the final.
But in the financial/credit world if you screw up, it’s not a quick and easy fix and it can end up costing you for years to come. Unfortunately, Credit 101 isn’t a course you’ll find in your college curriculum, which is why my goal here is to empower you with the knowledge and knowhow to avoid these costly mistakes. Without further ado, here’s are a few of the most important credit lessons I think every high school senior should know before heading off to college.
I. Laws in place to protect students from predatory marketing
In the past, college campuses and college students specifically were fair game for credit card companies. Credit card companies were notorious for targeting college students with aggressive marketing tactics, making it nearly impossible to walk around a college campus without being solicited to apply for a credit card in exchange for free “swag.” This swag was usually some type of college themed marketing freebie used to entice students to apply for a new credit card.
To add insult to injury, these credit card offers were insanely easy to qualify for – if you had a pulse and were currently enrolled as a student, there was a pretty good chance you’d qualify. No job? No income? No problem! Predatory credit card marketing practices and college campuses went hand in hand and students were considered fair game.
Credit card companies are smart. They saw the future potential for college students to become lifelong customers — especially if they could convince you to sign up and become the first credit card in your wallet. Afterall, you’re working hard for that bright and successful future – a future with lots of potential, a future with a great job and an even better paycheck, the perfect customer with which to build a lifelong financial relationship.
Thankfully, the rules have changed and with the new Credit Card Accountability Responsibility and Disclosure Act of 2009 (informally referred to as the “CARD Act”) now in place, many of these older predatory practices are now illegal or restricted. To protect students and consumers under the age of 21, credit card issuers must now:
- Obtain proof of income before issuing a credit card to consumers under 21 years of age. If you don’t have an income, a credit card co-signer is required in order for the application to be approved.
- Obtain prior consent before sending pre-approved credit card offers to anyone under the age of 21.
- Obtain written permission to increase credit limits on accounts with co-signers for accountholders under the age of 21.
- Cease all predatory lending practices and aggressive marketing tactics on or near college campuses.
II. Avoiding credit card company traps and marketing even with CARD Act regulations
The CARD Act has made great strides in protecting students from predatory credit card practices. Still, young people have to watch out for remaining credit card traps. The most important advice I can give is that you read and fully understand the terms and conditions before you apply for a card. Here are a couple of the most important things to watch out for:
- Introductory teaser rates. Don’t be fooled by the 0% introductory teaser incentives. These offers can be great deals but introductory rates are temporary and you’ll want to pay close attention to the ongoing rate after the intro period expires.
- Annual fees. Many cards, especially those that offer rewards or cash back incentives, also include annual fees. In many cases the annual fee is waived the first year but it’ll kick in every year thereafter so it’s something to pay attention to, especially when there are a number of other credit cards on the market that don’t carry an annual fee. Be aware of all possible credit card fees before you make a selection.
- Prepaid debit cards vs. credit cards. Prepaid cards have grown in popularity, especially with college students. Be aware that prepaid cards of any variety are not credit cards. Often these cards are marketed as a safe way for students to build and establish credit but the truth is that they do no such thing because like debit cards, prepaid cards are not reported to your credit reports.
III. Building credit in college
Another question that almost every student faces is; “How do I get credit when everyone wants to see how I’ve managed?” You actually have a few pretty decent options:
- Start with a secured credit card. A secured card works just like a regular credit card except for the fact that the credit limit is backed or “secured” by a cash deposit that you make with a bank in exchange for the card. For example, if you opened a secured credit card with a $500 cash deposit, the bank would issue a credit card with a $500 credit limit. The drawbacks to secured cards are their low credit limits and fairly high interest rates. Your goal should be to manage the account wisely in order to build and establish credit, and then upgrade and move on to a traditional credit card. And, if possible, always pay your bill in full each month to avoid interest costs.
- Become an authorized user on someone else’s credit card. As an authorized user you get a credit card with your name, granting you full “authorization” to use the card just like the primary cardholder. When someone adds you as an authorized user on their credit card, you essentially get all of the benefits of the primary cardholder but without any of the liability. You’re not responsible for the monthly payment and you have no obligation to pay the bill. Authorized users benefit from the primary cardholder’s credit history because credit card issuers will typically report the account to the authorized user’s credit reports.
If the account is well-established, with a long standing history of on time payments and has a low balance in relation to the credit limit, your credit and credit scores will surely benefit as a result. The opposite is also true. If the primary cardholder misses a payment or maxes out the credit limit, your credit will suffer too. If things go awry with the primary cardholder’s management of the account you can have your name removed from the account and it will then be removed from your credit reports. Being an authorized user on a credit card is like having a credit card with training wheels.
- Get a Co-Signer to vouch for you. A co-signer is someone who signs on a loan with you, accepting equal liability for the loan on your behalf. If you’re unable to make a payment, the co-signer is liable, right along with you. This means that if you miss a payment or default on the loan, both you and the co-signer’s credit will suffer. I’m including this option so that you know it exists but it’s not an option I like and it’s one I’d strongly advise against. Simply put, there are other, smarter options that work just as well — without the drawbacks and unnecessary risk for the co-signer.
IV. How to avoid leaving college with massive credit card debt
This is my final piece of advice and it’s actually quite simple. It’s sticking to it that’s the tricky part. If you want to avoid leaving college with massive amounts of credit card debt all you have to do is watch your credit card spending and only spend what you can comfortably afford to pay off in full at the end of each month when the bill arrives. If you follow this one simple rule, credit card debt is a problem you’ll never have to worry about.
Credit should not be feared and those who demonize credit cards and banks are ignoring the fact that when we get into debt it’s a voluntary act. Further, we need access to competitively priced credit, including credit cards. They provide for portable capacity and offer significant protections against fraud thanks to Federal law.
The golden rule is to always remember to use credit cards wisely. Manage the account responsibly by making every payment on time and never carrying a balance from one month to the next. Your efforts will be rewarded and your credit scores will shine.
Article by John Ulzheimer
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:
- 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.
- 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
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.
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