With identity theft crimes continuing to rise, watching your credit report can help you make sure that no one is using your good name to do bad things.
Credit monitoring can’t actually prevent identity theft, but it can help you remedy the situation before it gets out of hand.
You typically pay a small monthly fee to your Bank or Credit Card Company for the credit monitoring service. A computer makes routine checks on your credit report to see if anything has changed. A credit monitoring service automatically notifies you by phone or e-mail every time the service detects something new on your report. This might include recent credit increase, accounts open, address changes or other new and unusual information that could be a sign of identity theft. If you know the activities are legitimate, you can simply ignore the alert. But, if you sense that something’s not right, you can take action immediately. Some credit monitoring services even guide you through the right channels to dispute the false information and clear your name.
Even if you don’t sign up for credit monitoring, make it a point to check your report on your own at least once a year at annualcreditreport.com
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Official documents may be a bit confusing for some people and credit reports fit into this category too. A better understanding of what these credit reports contain may help you use it to your advantage.
The most important part of your credit report is your FICO score and it should be prominently displayed in any credit report you review. If you have a high FICO score than you can get better deals and a better interest rates. Your FICO score is used by many people or companies to see what kind of financial person you are.
The form of a credit report may vary from one credit reporting agency to another. Usually the first section of your report contains all your personal information: name, address, birthday, social security number and so on. The second section of your report usually contains information that is available to the public like court records, foreclosures, bankruptcies. The third section may interest you the most because it contains all your credit payment information. It doesn’t display your on time payments but it does report on your mistakes and delinquencies. If this section is relatively empty it means that you’re probably are in good shape. The fourth and last section typically contains information on anyone that has inquired into your credit rating like a credit card company or bank. It is useful because it shows others who need information about you.
Know that you have a clearer image of what your credit report contains you can better understand it and keep an eye on your FICO score.
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The credit system isn’t a two way conversation between your lenders and the credit bureaus, it should also involve you. You have the right to question any information in your credit report that is inaccurate, untimely, misleading, incomplete, ambiguous, unverifiable, biased or unclear. Any questionable item that cannot be verified must be removed.
Justin R. Padawer, psychologist and consumer advocate explains this system. There are three consumer report agencies Equifax, Experian and Trans Union, but neither is official, they are not under the government’s wing. They are privately owned and they buy and sell our information for a profit. The laws that can be applied to these so called agencies are laws that protect consumers, or consumer protection statutes. They work to place limits upon the credit bureaus. So when a lender tells you that they can’t remove something from your credit report for seven years, by law, they are either misinformed or they are lying. The Fair Credit Reporting Act places limits on the amount of time something can be reported but it doesn’t stipulate that something must be reported.
Besides the act mentioned there is also the Fair Credit Billing Act, the Fair Debt Practices Act, and the Truth in Lending Act. They are all created to help any customer improve their credit rating. Even if these laws give you the possibility to address credit issues on your own it is a long and hard road to acting on them. You also have the possibility to address a specialized firm to fight the system for you. Correcting your credit or errors on your credit report is possible, and also credit report negatives can be removed from your credit report.
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If you have a few dings (or more than a few) on your credit report, it can be difficult to obtain any type of credit. Even if you do find someone willing to lend to you, the types of credit cards and loans that are available to you may have such high interest rates that they are unaffordable. Like many with less than perfect credit, you may be looking into credit repair to see if it can help your situation. Below are three of the most commonly asked questions about credit repair.
Can a Company REALLY Remove Negative Information from my Credit Report?
Despite the many companies that promise to do so, the fact is that negative information that is correct cannot be removed from your credit report.
Typically, items remain on a credit report for a period of seven years. In some cases, as with bankruptcies, it may remain for as long as ten years.
Unless an item is on your credit report by mistake, there is no way to have it removed. Unfortunately, many “credit repair” companies make claims that they simply cannot keep. They charge upfront fees and then do very little – if anything – to actually change your credit score or report.
A Credit Repair Company is Asking Me to Do Something Unethical. Might I Be Breaking the Law if I Go Along With It?
This question can be a bit tricky to answer. It depends on exactly what you are being asked to do. Some of the methods used by these companies are unethical, and some could be illegal. Obviously, doing something that is unethical, such as lying about whether an item on your credit report is correct, is not the way to go about raising your credit score. That being said, not all such methods would constitute breaking the law.
The best way to avoid crossing the line is to avoid taking any steps that involve having to lie about what should or should not be on your credit report.
Sure, it will take longer to bring your score up, but at least you will be going about it the right way.
Is There Any Way to Raise My Score?
Because many of the promises made by those who claim they can raise your credit score turn out to be lies, you need to figure out how you CAN raise your score. You may be disappointed to learn that there is no way to quickly cause your credit score to jump up. There are, however, steps that you can take to ensure that you get back on the right track to having healthy credit.
The first is to pull your report from all three of the major credit bureaus to make sure that there are no mistakes. Errors on credit reports are a lot more common than many people think. If there is a legitimate error on yours, simply file a grievance and the credit bureau will do an investigation. If it turns out that the item was there by mistake, it will be removed.
Another way to raise your score is to try and keep your credit card balances at no more than 30% of the available limit. For example, if your credit limit is $9,000, work to keep your balance below $3,000. The less of your available credit that you use, the higher your score will be.
Another way that you may be able to raise your score is to appeal directly to the creditor who has placed a negative item on your report. In some cases, you may be able to convince them to remove the negative item in return for paying your balance off in full. Creditors are under no obligation to do this, and the truth is that most will not. Still, it never hurts to ask, especially if you are willing and able to pay your balance off in full.
While it would be great if there were some quick and easy fix to a low credit score, the fact is that the only path to credit repair is a slow and steady one. Be diligent to make all payments on time and to avoid using all of your available credit.
It isn’t always easy, but those steps truly are the path to a good credit score that can save you thousands of dollars in interest on your future purchases.
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As the number of cases of identity theft continue to rise, more and more people are interested in learning all that they can about this crime and about how they can protect themselves from being a victim. Below are three of the most commonly asked questions about ID theft.
How Can I Protect Myself?
This is probably the number one question that people have when it comes to ID theft. About a decade ago, people were still printing their social security numbers directly on their checks. While most people would no longer dream of being that careless with their personal information, there is a lot more to protecting yourself.
As technology improves, criminals are finding more ways to steal a person’s identity with less and less information. Some criminals have been able to start the process of stealing a victim’s identity with nothing more than their name, birth date and address.
There are many, many steps that one can take in order to try and protect their identity. The problem with most of them is that if you neglect to do one little thing, you can still become a victim. The good news is that there is one simple thing that you can do that can protect you from most of the problems associated with ID theft.
By putting a lock on your credit report, it will be virtually impossible for anyone to obtain credit in your name. That means that even if someone has all of your personal information that they still will be unable to use it to obtain credit cards, open bank accounts or get a loan.
You should not that should you want to apply for credit that you will need to take the lock off long enough for the potential lender to check your credit. Then you can put the lock right back on.
Of course, a lock on your credit will not stop anyone from using your name in other ways, such as to obtain employment or when dealing with law enforcement. For those reasons, you should still take other steps to protect yourself as well.
Aren’t Rich People the Only Ones that Need to Worry about ID Theft?
While this is a fairly common misconception, the answer is an emphatic NO. Victims of ID theft cross all socioeconomic lines, and everyone needs to take steps to protect themselves.
Sure, the stories about ID theft that make the news often involve people who were able to purchase million dollar homes based on someone else’s financial information. Unfortunately, for every one of those stories there are thousands about average people who were victims of this type of crime.
I’m a Victim. What Should I Do?
If you suspect you have become a victim of identity theft, you must act immediately. First, contact police to file a report. Next, contact all of the three major credit bureaus to inform them of your situation. They will place an alert on your credit report so that no further credit will be able to be obtained. While most lenders take heed of such alerts, some do not. You will need to start monitoring your credit very closely to make sure that no new loans or other types of accounts have been opened. You should also ask that a lock be placed on your credit, so that no one will be able to open any type of accounts in the future.
Next, you will need to send a letter to each of your legitimate creditors and those to which the criminal opened an account.
For your legitimate accounts, simply inform them that you have been a victim so that they can more closely watch for suspicious activity. For accounts that are not yours, you will need to send an affidavit in order to begin the process of having the items removed from your credit report.
Unfortunately, it can take months and even years to fully sort through the mess left behind by the person that stole your identity. You should keep a copy of the affidavit on your person at all times as it is not uncommon for these thieves to use someone else’s identity when they have run ins with law enforcement.
Obviously, the best thing that you can do when it comes to ID theft is try to ensure that it doesn’t happen to you. Put a lock on your credit and protect all of your personal information. Too many people become victims each year. Don’t be one of them.
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