What’s in your credit report?

When is the last time you checked your credit report? Nearly two-thirds of adults have not ordered a copy of their credit report in the past year, according to The 2009 Consumer Financial Literacy Survey, released in late April and commissioned by The National Foundation for Credit Counseling. And 1 in 4 adults admit to not paying all of their bills on time, one major behavior leading to a bad credit score.

As many Americans get some spring cleaning done around the house, it’s also an ideal time to make your financial house shine-especially if a car or house loan is on the horizon. Banks are less willing to lend in this current economical climate. That hits home for the average consumer when a loan is denied or the offered interest rate is high.

Although credit isn’t the only factor in loan eligibility, it’s worth making an effort to stay on top of it. That goes for those with good credit, too. While 680 used to be the threshold to “good credit” and the best mortgage rates, now anyone with a score of less than 720 can get socked with fees. Every point in your credit score can make a big difference between paying low and high interest rates.

As can every error on your credit report. Always check your credit report regularly to make sure there are no errors that can end up costing you a lot more than just a bad credit score.

Spring into action – Here are eight insider tips for the task:

1. Gather your tools – There’s no reason to put off checking your credit.  Reviewing your credit won’t hurt your credit, despite a common misconception that it will (although ordering multiple copies can affect your score). Bear in mind that credit reports don’t always include your credit score. And the three main credit scoring bureaus don’t receive identical data, so each score will be a little different.
2. Check your report for potential inaccuracies – According to a Public Interest Research Group study, one in four credit reports contains serious errors. Disputes should include the item name, account number associated, the error, and the requested changes. Always request an updated credit report showing the mistaken items removed or corrected.
3. Examine your revolving debts – “Revolving accounts include all major credit cards, store charge cards, and store lines of credit. Each is assigned a maximum credit limit-but everyone should aim to only use 30% of total credit at once. When that’s not possible, “getting the balances below 50% is also beneficial to your score.

   Caution: Credit card companies have been lowering limits, so your credit score could fall even if your balance doesn’t increase.

4. Pay on time -Twenty-two percent of consumers are paying more bills late these days, especially on utilities, according to a Western Union online survey this year of more than 3,000 respondents. Even a $10 missed payment can hurt your credit score for a long time. Using such tools as automatic bill-payments can help you hit those deadlines, Lin says. Even paying your bills on time for a month can hike a modest credit score by 20 points.
5. Hold your cards - The average consumer has eight or nine credit cards, but that’s too many, experts agree closing unused accounts isn’t the answer. That affects the ratio between available credit and open balances. Closing an old account could also shorten your payment history, causing a negative impact. The longer you hold a card, the more valuable it is in your credit score determination.
6. Befriend your creditors – If you can’t keep up with your payments, ignoring creditors’ calls, letters, or knocks on the door in the hopes that they’ll just go away is not the solution. Be proactive: Call your creditors to explain your situation — you’ve lost your job, for example, or fallen ill – and what you intend to do to recover. Then ask for assistance, such as a reduction in your interest rate, or a temporary moratorium on principal payment. Creditors don’t want to repossess assets or foreclose if they don’t have to.
7. Keep on scrubbing – Building a great credit score is like building a resume. It takes time and patience to form the right financial habits needed to getting your credit in shape.
8. Sweep away the doldrums – The simplest step you can take is also, in some ways, the toughest. Building pristine credit could take years, but most people can reach creditworthy levels by simply making all delinquent debts current and maintaining that on-time payment history.
9. Get proactive identity theft protection – Checkout our top rated identity theft protection services to help stop identity theft impacting your credit before it happens from TrustedID, Identity Guard, LifeLock, ProtectMyID, and ID Patrol from Equifax.

Identity Theft Protection

Identity theft protection is an on-going battle as your Social Security number, bank account numbers, and personal information are all an identity thief needs to steal your identity. The identity thieves come up with new scams all the time to try to get their hands on your personal data and then use it for their financial gain. Here are the most popular types of identity theft that you need to be aware of and get proactive identity theft protection in place to prevent it.

Mailbox Raiding & Dumpster Diving Identity Theft
Mail from banks, institutions, and even new credit card offers contain valuable personal information which identity thieves can use to drain accounts and open new credit cards in your name. They get the information by stealing mail right out of your mailbox, or as in the case of dumpster diving, out of the trash after it has been thrown out.

Phishing Identity Theft
If you’ve ever received an email from a “bank” or other financial institution asking for account information, identity thieves could have been phishing for your identity. Clicking on their link will send you to a site that looks the same as the actual institution, but actually belongs to the identity thief. When you enter your information, the thief has stolen your identity.

Vishing Identity Theft
A combination of the words “voice” and “phishing,” vishing is like phishing, except the thieves use the phone instead of email. Identity thieves may leave a message pretending to be your bank or some other company. When you call back, they’ll steal your personal information.

Medical Benefits Fraud Identity Theft
Increasingly, identity thieves have started seeking treatment using another person’s name and medical insurance information. They can get it by stealing your wallet or hacking into a doctor’s or hospital’s computer system.

Spyware Identity Theft
Spyware is a malicious computer program that installs itself on your PC and then allows thieves to record your personal information – like a credit card or debit card number, password, or Social Security number.

Skimming Identity Theft
Skimming is a way for a thief to get your ATM or credit card information by installing their own card reader on an ATM machine. When you pass your card through the skimming device, it records your card information.

Corporate Data Breach Identity Theft
Trusted businesses, like your employer, your local bank, and other organizations have a great deal of your personal information stored on their computers. Thieves can gain access to this information by hacking into the network, by posing as a business partner, or after an employee loses a computer, disk or box of files.

Social Networking Sites Identity Theft
Identity thieves are using social networking sites like Facebook and MySpace® to find out your personal information. Identity Thieves use the information they find on the site to pretend to be someone they’re not and coax other information out of you – like your Social Security number.

Child Identity Theft
Child identity theft works the same way as it does for adults: the identity thief acquires a child’s personal information, then creates fraudulent accounts in their name. But because children usually don’t have financial accounts until they are older, no one may find out about the theft for many years, allowing the problems to be greatly compounded.

Senior Identity Theft
Seniors are particularly vulnerable to identity theft, because most have significant accumulated wealth, and are often unable to monitor their accounts carefully. Many are also less knowledgeable about technology, and more trusting of strangers and marketers, increasing their vulnerability.

Student Identity Theft
College students are another high-risk group. School registration days and frequent unsolicited offers for new credit cards provide many opportunities to share personal information and Social Security numbers. Combine that with frequent address changes and unforwarded mail makes students a group ripe for picking by identity thieves.

Five Ways to Protect Against Identity Theft this Tax Season

Here are our five recommendatations for protecting yourself against identity theft this tax season. 

1. Guard your mail. Once your mail leaves your hands, it’s at the mercy of the people who handle it – so make sure you get it in the hands of the right people. Take your sensitive mail directly to the post office and make sure that when you check your mail, you don’t leave it in your mailbox – you retrieve it as soon as possible after it’s delivered or consider a locking mailbox.
2. Don’t keep tax information loose around the house or car. Let’s face it: there aren’t many places you’ll keep your tax information except a few places, like the house, car, or office. So make sure you don’t get cavalier about these locations. Make sure you can lock important documents away at home and that you protect them in your car and office.
3. Only deal with legitimate government organizations. Whether you like it or not, you have to pay your taxes and you have to report your information to the government. But you don’t have to report it to just about everybody else, so protect your information by dealing directly with the IRS and worrying less about third parties.
4. Protect your Social Security Number. Your social security number is a big target for identity thieves, and since taxes contain your SSN, you’re going to want to be careful about making sure they’re secure. Do a search on your computer for your SSN and archive any documents onto a CD and delete the files from your computer.
5. GetProactive identity theft protection. Checkout our top rated identity theft protection services to help stop identity theft before it happens from TrustedID, Identity Guard, LifeLock, ProtectMyID, and ID Patrol from Equifax.

Beware of 2010 Census Scams

The Census Bureau uses trained employees to conduct a variety of household telephone interviews, in-person interviews, and through the mail. However, identity thieves are using the 2010 Census as an opportunity to come up with new scams to help steal people identities.  If you are contacted for any of the following reasons — Do Not Participate.

Beware of the following 2010 Census Scams

•The Census Bureau does NOT conduct the 2010 Census via the Internet
•The Census Bureau does not send emails about participating in the 2010 Census
•The Census Bureau never:
-Asks for your full social security number
-Asks for money or a donation
-Sends requests on behalf of a political party
-Requests PIN codes, passwords or similar access information for credit cards, banks or other financial accounts.

Be proactive against identity theft

Identity theft victims lose a great deal of time, money and peace of mind. In addition, it can take years to repair damaged credit and your good reputation. Therefore, it is wise to take a few simple preventative steps to protect yourself as much as possible before it happens.

• Keep an eye on your mail. Know when your account statements come; pay attention to your finances; obtain a copy of your Equifax 3-in-1 Credit Monitoring; and make sure you check for fraud regularly.

• Proactive identity theft protection. Checkout our top rated identity theft protection services to help stop identity theft before it happens from TrustedID, Identity Guard, LifeLock, ProtectMyID, and ID Patrol from Equifax.

Understanding Your Credit Report and Credit Score

The three major credit reporting agencies (CRAs) — Equifax, Experian, and TransUnion — collect information about you and your financial history and summarizes it in your credit report. Your credit report includes the following data: 

• Personal information
  Your name (and any names you’ve used in the past), Social Security number, current and past addresses, and employment information.
• Credit history
  Status of credit lines and loans in your name, including banks, credit card issuers, retailers, Internet and cell phone service providers, and other lenders.
• Inquiries
  Records of everyone who’s accessed your report in the last two years, including lenders you’ve applied to for loans and those who have requested your file to offer you preapproved credit.
• Information in the public record
  Any tax liens, bankruptcies, and monetary judgments against you, while most of the negative information on your credit report is dropped after seven years, a bankruptcy may stay on your credit report for ten years.

Anyone with a legitimate business need can request a copy of your report, including lenders, landlords, current and potential employers, and government and licensing agencies. Because your credit report is used in so many different ways, you’ll want to make sure it’s an accurate reflection of your financial history. We recommend that you check your reports for accuracy at least once a year. You should also request copies a few months before you make a major purchase, such as a new house, car or apply for a job.

What’s the credit score?
The credit bureaus also assign you a credit score based on your credit report — a number from 300 to 850 that reflects its assessment of the risk you pose to potential lenders. Many lenders prefer credit scores to credit reports since they boil a lot of complex information down to a single number. Credit scores can also speed the application process for a loan, since lenders can make credit decisions based on them almost instantly.

Every lender sets its own threshold for an acceptable score — there is no single cut-off for receiving credit — and determines the interest rate you qualify for. In general, the best — or lowest — interest rates go to people with the highest scores. The top 20% of credit reports receive scores over 780, while the lowest 20% receive scores under 620. Although you can obtain free annual copies of your credit report, you’ll have to pay a modest fee to obtain your score.