Credit Identity Theft

Are you a victim of credit identity theft?  Maybe you discovered on your credit report that there are credit cards or loans that you did not open.  Did a credit card came in the mail that you did not apply for?  Or maybe you are getting phone calls from debt collectors in regards to accounts you did not open.  Possibly an imposter has gained your identity and is using your good credit score to buy things. This is a quick guide on how to regain your good financial status.

First, you want to call the police to report this crime.  By contacting the police, the credit bureaus must stop the reporting of incorrect information identified by the victim.  Law enforcement agencies can then obtain documents without a subpoena from the businesses where fraudulent accounts were opened.

Call the fraud department at all 3 credit reporting companies.  You can place a 7 year fraud alert on your name when you talk to them. You will then receive a free credit report from each agency.  Go over these with a fine tooth comb.   You will need to put in writing the fraudulent information you found on your report and send it to each credit reporting agency.

You will need to call the businesses where the identity thief opened accounts. Also send the businesses the information in writing.  The business will most likely ask you to complete fraud affidavits.  When the fraudulent account has been cleared ask for a letter stating that the account was closed and the debts were cleared from your credit record.

If a current account has been abused call the company who has the account and ask for a new card and a new account number.  Add a secure password to be able to access this account from now on.

If debt collectors call you in regards to the fraudulent accounts get the collectors business name, address and phone number.  Tell them you are a victim of credit identity theft.  Also put in writing to the debt collectors your situation.  Ask them to put in writing that your account was cleared and you do not owe the money.

Being a victim of credit identity theft is a growing crime.  Clearing your name can be a long process.  Make your accounts as secure as possible. Shred paperwork before putting it in the trash or to be recycled.

Credit Repair Scams

When it comes to repairing your credit score doing it yourself is the best way to attack the problem.  There are many people out there who would love to scam you out of your hard earned money by telling you they can repair your credit for you.  There is no quick fix in repairing your credit score.

There are some ways to tell if it is a scam you are being offered.  If the company wants you to pay upfront for their services do not do it.  A credit repair company cannot ask for payment until after they have completed the services they promised you they could do to help you.

A company has to tell you what you can do for free to help your credit.  If they do not tell you how you can help yourself then stay away from that service.  You can find how to do it yourself by researching it online.

If the service tells you not to contact the 3 credit reporting agencies run the other direction.  The 3 credit reporting agencies have to be told about how you are trying to correct your score. The service should want to help you in the right way.

If this service tells you to open a new credit identity by applying for an Employer Identification Number to use instead of your Social Security number hang up and report them to the police.  If you do this you will be breaking the law.  Mainly by misrepresenting your social security number.

A credit repair scam can be seen if they ask you to dispute everything in your credit history.  This is based on that if a company does not respond to a letter within thirty days then the bad information has to be removed  from the credit reporting companies.  It is highly unlikely that these companies will take more thank thirty days to respond.  You are wasting your time.  And wasting your money with the company who told you to do this.

The only people who can remove debt permanently from your credit record are the credit reporting companies or the creditor.  Contact your creditor personally to set up a payment plan.  If you received an unsolicited e-mail about credit repair remember, “If it’s too good to be true then it probably is.” Spam is spam.  It is unwanted advice. Only you can help yourself.

How To Read A Credit Report

How to Read a Credit Report

Have you ever wondered what actually drove your credit score? If so, you are among the millions of people who are confused about how to understand both their credit score and their credit report. There are five components of your credit history that determine what your personal credit score is.

Credit Report Categories

When you view your credit report, you will notice that it is divided into categories, beginning with your personal information. Your personal information includes all names used, present address and previous addresses. The remainder of your personal credit report is divided into 5 components, including:

·         Types of Credit- 10%

·         New Credit- 10%

·         Length of Credit History- 15%

·         Amounts Owed- 30%

·         Account History- 35%

Types of Credit- The kind of credit that you utilize comprise this portion of our credit report. Examples of types of credit are instalment loans, credit cards, lines of credit, mortgage loans and home equity loans and consumer loans.

New Credit- 10% of your credit report is derived from the number of recent accounts that you have opened, the proportion of new accounts to your total accounts, and the quantity of new credit inquiries.

Length of Credit History- The length of time that you have established credit history will work to improve your credit score. Also, the length of time that each account has been opened will impact your credit score. So, when possible, work to keep accounts open as long as possible and select accounts that you can repay and maintain rather than short term accounts that will see little use.

Amounts Owed- The total amount you owe on all accounts, the total amount owed on each account, the total percentage of credit available that is used and the total percentage of credit accounts that are used will impact this portion of your credit report.

Account History- Each account that is present on your credit report will impact this portion of your credit report. Your payment history for each debt, past due amounts, late payments and current payment status will be reported, affecting your overall credit score. Any public records or negative credit information impacts this portion of your credit report.

Each of these categories impacts your overall credit score. And, while there is a total impact percentage for each category, each category is important in generating the best possible credit score for yourself.

How to Correct Your Credit Report Errors

Checking your credit report at least yearly is crucial.  What do you do if you find an error on your report? Do not fret; the error can and will be corrected if the consumer reporting companies have made the error.

So, what steps should you take to correct errors made on your credit report?

First you should tell the consumer reporting companies in writing about what information you think is inaccurate.  Make sure you include your name, social security number, home address and date of birth whenever you send correspondence.  And, include a copy of your driver’s license as it could help in case of identity theft.

The letter that you send to the credit agency should include the company name and account number in question. Make sure you specify what the dispute is.  Do your research and gather any documentation that could help in your claim.  You need to include copies of documents as evidence to back up your claim. 

Send the letter certified mail and return receipt requested.  This way you will have proof that your letter was received.  This receipt from sending the letter certified mail will also be evidence of the 30 days they have to respond to your claim.  The companies will then investigate the errors you pointed out to them.  When the companies are done investigating your problem they have to give you a report of their findings in writing. If you have not heard back in 30 days then you can write them a letter stating that they need to complete the updating of your credit report that you requested.

The second step is to inform the creditor in writing that you are disputing an item.  Include copies of your evidence backing up your claim.  Most providers have a specific address to send disputes.  Attach copies of the information you sent to the consumer reporting companies.

You may receive computer calls from the consumer reporting companies during this process.  They are just trying to get you to give up on your request.

If the consumer reporting companies will not remove the disputed items, ask for the name, address and phone number of the creditor who reported the negative information. Start back at the beginning and start a second investigation, if necessary.

Don’t be afraid to correct the error or errors you find on your credit report.  Your credit history is vital for you to obtain loans and get good car insurance premiums.  Be proactive and check yours yearly.

What Causes you to be Denied for Credit?

If you have ever been denied for credit, you probably were wondering why. Your personal credit score is a reflection of your credit risk in the eyes of potential lenders. So, understanding how to determine why you were denied for credit will enable you to work on improving your credit score.

There are a variety of reasons that could cause you to be denied for credit, including:

1.      Credit Obligations that are Delinquent- Late payments, charge offs or judgements, tax liens, foreclosures and slow to pay credit history can cause not only your credit score to decline, but can cause you to be denied for credit.

2.      Incomplete or Inaccurate Credit Application Information- Potential lenders rely on the information you provide to them on the credit application to make their credit decisions. If information on the application does not match the information that they find on your credit report, it may cause your application to be denied. Be sure to check your credit application for accuracy before you submit it for consideration; it may save you from an un-necessary denial.

3.      A High Volume of Credit Inquiries- This is probably one of the most commonly overlooked areas of a person’s credit report. When a potential lender requests information about your credit history, it shows up as an inquiry on your credit report. There are two kinds of credit inquires, hard and soft inquiries. A hard inquiry is when a lender requests an actual copy of your credit report for review why a soft inquiry is a look into your personal information for pre-approval or for a promotional offer. Soft inquires do not impact your credit score while hard inquires if they occur too often can cause your credit score to decline.

4.      Credit Report Errors- While they do not occur commonly, errors can be present on your report, negatively impacting your score. The most common error is a name misspelling, so it is important to review your credit report regularly to ensure that all of the information is correct.

5.      Insufficient Credit History- If you have recently established credit history, or you do not have long term account history, it may make it challenging to build your personal credit. Work proactively to build your credit over time.

Work to proactively build your credit report over time and monitor your report to ensure that your personal score is as strong as possible.

Getting Out of Credit Card Debt

Credit card debts are something that, unfortunately, affects millions of people in the world. Recent statistics state that the amount of money that’s being charged on credit cards is well into the billions of dollars. While having a credit card in an emergency can be a great help, too many individuals find themselves way over their head in credit card debt and not knowing how to get out. Getting out of credit card debt is possible, especially if you have a plan and some determination.

Sit down with all your credit cards and add up the balances so you’ll have an idea where you’re at financially with your credit cards. There are two ways you can think about paying off the credit cards faster. You can send each credit card company a little more than the minimum due each month. However, if you’re over your head in debt with credit cards, you may be having difficulty making the minimum amount due much less an extra amount. Another option is to concentrate on one card first by sending them more than is required and pay less on the others. You may still find yourself past due with some but you’ll soon have at least one credit card paid off, which will be a great psychological boost for you. When one is paid off, concentrate on another and DO NOT start using the first one again. You may want to give it someone to hold until such time that you feel the will power to use it wisely.

If you are sincerely having difficulties making your monthly credit card payments, contact the credit card company and explain the situation to them and let them know you will be making a specific payment to them each month and always make that payment on time. Late fees and additional interest on credit card balances can easily make it seem like you’re going nowhere towards getting out of debt with your credit cards.

There are many credit card companies offering 0% introductory APR on balance transfers. If you can get a credit card like this that offers not only 0% intro APR but a lower interest rate after the intro period, you’ll be saving money. You can transfer the balances from all your credit cards with high interest onto the new credit card. By paying 0% or less interest, your payments will be less than they were before the transfer. Always make your payments as quickly as you can as you’re charged interest daily.

If all else fails, many credit card companies will offer settlements, allowing you to pay the credit card off for less than you owe. The downside of this is that the credit card will no longer be available for emergency purposes and your credit rating will go down due to the settlements. Consider this as a last option.

Why Knowing your Credit Score is Important

Your credit score says a lot about you to your creditors as far as what debts you have and how you pay these debts. Anytime you apply for any type of credit, whether it’s a loan, credit cards or even services with a satellite provider, someone will be looking at your credit report and your credit scores. Credit reports provide you with a number which is based on different factors on your credit report, including amount of debts, type of debts, balances and how they’ve been paid in the past (on time, past due, etc.). Many people don’t realize the importance of knowing their credit scores. Following are ten reasons why it’s important to know your credit score.

1. To prevent any possible identity theft. By looking at your credit score, you’ll know if there’s something you should be aware of and if this something is accurate. The inaccuracy may be something as simple as your name spelled wrong or an incorrect social security number but these discrepancies may indicate there are other errors.
2. You can compare your scores given by the 3 major credit card companies. Your credit report will be give by 3 agencies and while their scores may not be identical, they should be similar. If you notice a large difference, it’s reason for you to investigate why the difference.
3. Knowing your credit scores will let you know how you’ll look in the eyes of lenders if you’re considering getting a loan.
4. You may notice a debt that’s listed as unpaid even though you know it’s been paid in full. You can contact the creditor and ask them to make the correction. It’s better you realize this now than when you’re seeking credit and having to explain the debt.
5. You may find a long overdue debt that you thought was paid only to learn it’s still unpaid.
6. If there’s debts that aren’t yours, you can have them corrected, which often takes time. Occasionally members of the same family with the same name experience problems like this. You can write a letter to the credit bureau explaining the error along with proof. Because this may take time to get this corrected, it’s important to act on it as soon as possible.
7. You may have had debts that would improve your credit scores but aren’t even listed on your credit report.
8. Loans you may have had in the past may be listed incorrectly (e.g. mortgage loan listed as an installment, etc.). You may not put much importance on this but it can affect your credit scores.
9. If your scores are low, you can learn what’s causing them to be low and begin to correct them.
10. You’ll have the chance to increase your scores before you need to apply for a loan or any other credit in the future.

Top 10 Ways to Improve your Credit

Having good credit is very important today because your credit report is retrieved and viewed by more people than you may realize. Unlike years ago when your credit report was only retrieved if you applied for a loan or credit card, today many companies offering services that require monthly payments will request a copy of our credit report. These companies include telephone companies, cell phone companies, satellite or cable companies, book, music and movie clubs and more. If your credit is not listed with as high of a credit score as they’d like, you can be denied services from one of these companies, causing disappointment as well as possible embarrassment. There are ways to improve your credit, however, before you actually need to rely on it. Here are some simple ways to improve your credit.

1. Pay your bills on time. This is one of the most important ways of improving your credit. Past due loans or payments is the quickest way to lower credit scores.
2. If you’ve had past due accounts in the past, get them current and stay current. If you have numerous past due credit cards, try to concentrate on paying at least one off or on time. It’s better to have 2 cards showing up past due then 3. Many people that have numerous credit cards past due will attempt to send small amounts to each to show good faith, even though they’re still all being paid after they’re past due. This may be slowly paying down the balances but is not improving your credit scores.
3. If you’re considering paying off a collection agency, be aware that this will take 7 years to come off your credit report so try to pay off your account before it gets to a collection agency.
4. Consider seeking the help and advice of a credit counselor if you are having trouble keeping up with your bills. They’ll show you ways to improve your credit scores.
5. Keeping your balances low on credit cards can help because the higher the balances the lower your credit scores will be.
6. Consider transferring your credit card balances to one credit card or a consolidation loan. One payment even if you does become past due will not hurt as much as many past due accounts.
7. The more credit accounts you have open, the lower your scores will be so don’t open up numerous accounts just so you’ll have a large credit limit.
8. If you’re dealing with past accounts hurting your credit, consider opening one new account and paying it on time to increase your credit scores.
9. Make monthly payments on time rather than paying off an account shortly after getting it if you only have one or two accounts. A short credit history will not increase your scores as much as paying an account off in time but on time.
10.  If you have no credit, try to get at least one credit card or small loan to develop credit.

What is a Credit Report?

What is a Credit Report?

A credit report is a reflection of your overall credit risk in the eyes of potential lenders. When you apply for credit, potential lenders will review your score to make a decision with regards to whether credit will be extended, the amount to extend and the associated interest rate. As a borrower, it is important to understand your credit report and the components that comprise it so that you can proactively work to improve and maintain your personal score.

Credit reports contain four key sections including your personal information, your credit history, any public records and credit inquiries.

Identifying Information

The first portion of your credit report contains your personal information, including your current full name, your maiden name, any names previously used, your present address, current phone number, driver’s license and any known previous addresses. If you have been married, your spouse’s name may also be included. Only the information that has been reported to credit agencies will be included in this section.

Credit History

Each of the accounts that you have or have had in the past will be listed under this section. Each account listing will include the name of the credit, the amount of credit that has been extended, the amount of credit that has been used, payment history and any derogatory information regarding the account relationship.

Other information that may be included in this section of the credit report could include:

· When you opened the account

· The kind of credit account that it is

· How much is currently owed

· The highest amount ever used

· Your minimum payment amount and frequency of payment

· The current status of the account; current, late, active, inactive, open, closed

Public Records

If you have ever filed for bankruptcy, have a tax lien, have a tax judgement or a foreclosure it will be included in this section of your credit report.

Inquiries

When a lender places an inquiry to credit agencies with regard to your credit score and credit history, it will appear in this section of the report. There are two kinds of inquiries, hard and soft inquiries. A hard inquiry is when a lender requests a copy of your personal credit report and a soft inquiry is when someone requests information about your report for a credit offering or a pre-approval. Hard inquiries affect your credit score while soft inquires do not.

Credit And Debt

People like to spend money.  That is evident in the fact that in 2007, the United States, for the very first time, spent more money than was saved. Because of how easy it was to get credit and the low interest rates from the past years, many Americans have overextended themselves financially.  Many times, an over-extension will lead to situations of owing more money to lenders than can be repaid.  We all know how debt is caused, but how can it be corrected?  A few options include debt management programs, debt consolidation, and seeking the advice of financial planners.  Each of these programs is detailed below.

Debt management programs are offered by lenders to help meet the needs of debtors.  Such programs aim to gradually eliminate debt.  Debt management programs vary, but the common types of debt management programs include: debt counseling programs, debt consolidation programs and debt settlement programs.  There are many debt counseling programs provided by professionals who instruct on debt management. A debt counseling provider can point you towards the program suitable for your needs.

Debt consolidation is another option for solving financial problems.  Debt consolidation is the merging of all personal debts through various methods, including:  debt consolidation loans, debt consolidation mortgage, and through debt counseling.  Debt consolidation loans allow one to consolidate all loans into one manageable loan. Such programs create the opportunity to pay off all bills and loans in one easy installment.  It also offers the borrower more inexpensive debt resolution options.

Seeking the advice of a financial adviser is another way to help eliminate debt.  Financial advisers are professionals who give unbiased opinions on the financial affairs of their clients.  Financial Advisers will review your current financial standing and then suggest a solution to meet your financial objectives.  Financial advisers may also give solutions on matters such as investments, insurance, retirement planning, mortgages and tax matters.  One reason to consider employing a financial adviser is that they are not tied to any particular financial service or product, therefore helping their advice remain unbiased.

These methods of eliminating debt are tried and true.  If your debt is overwhelming, consider researching the above methods of eliminating debt and choose the one that is right for your situation.