We’ve written many times about the difference between FICO scores and FAKO scores – the ones that the credit bureaus advertise a lot that are not an equal comparison to the score that a lender sees.  So when your actual FICO scores are on sale, we want to make sure you know about it.

They usually cost about $16 each and until March 31st, they are only $11 and change!  Not only do you get your TransUnion and Equifax FICO score, you also get your TransUnion and Equifax credit reports.  AND purchasing these reports and scores does NOT count against your scores because it is a Soft Inquiry.  You can read more about Inquiries here.

When you go to the MyFICO site, click on the top left tab that says ‘FICO Scores and Credit Reports’, then click on the Buy Now tab to the right of FICO Standard.  You will be asked to create an account to get your reports and scores.  Before checkout, it asks for a discount code; put in MyFICOis9 to save 30% off the regular price.

A FICO sale is a great opportunity to monitor your credit to check for errors and signs of identity theft.  When you find an error on one of your reports, send in correction requests to all three credit bureaus.  This article has tips on how to dispute inaccurate items on your credit. 

Remember that our credit consulting services are available to anyone in the U.S. or Canada.  We can provide your Credit Check-up using your latest FICO credit report with a complete analysis and your personal credit building plan starting at only $100.  Contact us today to get yours.

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Remember, your truly FREE reports are at annualcreditreport.com.  You are entitled to three per year at no cost; that is one from each of the three credit bureaus.  They’ll all try to sell you something on the way to getting your free report, even through the official government mandated website.  Just click on the NO or NO THANKS button and continue on your way.

If you do decide to sign up for anything when you’re online, read the fine print.  If you have questions, email or call the company for clarification and ask where on their site that information is so you have a copy in writing. 

When you give a credit card number for any automatic billing, ask about the cancellation procedure.  We have had many clients with recurring automatic billing that they have attempted to cancel and are still being charged for. 

When you do contact the company to cancel a recurring charge, get written confirmation that the automatic billing will be stopped and be sure the date of the cancellation is clearly stated.  And then keep the paper!  

Read your account statements and monitor your credit report regularly to be sure that you are not losing money or paying extra for something you really don’t want, need or have previously cancelled.

Contact us for information on getting your Credit Check Up to learn how to build better credit scores.

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This month’s topic is Tax Law.

WHEN:  The first Tuesday of every month.   March 2, 2010 from 4:30 to 6 :30 only – Arizona local time.

HOW:  Call 602-258-1212 to ask your questions on this month’s topic.

WHO: Open to the public.  The volunteer lawyers are in Arizona and have answers pertaining to Arizona law.

For more information, visit the State Bar of Arizona’s website.

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The two sites being advertised the heaviest right now are the freescore and freecreditreport websites.   Experian, one of the three major credit bureaus, owns the company advertising the free credit reports.  The free score site is a subsidiary of Vertrue Inc., which this Wall Street Journal article states has had numerous consumer complaints with the Better Business Bureau.

Neither of them offer FICO scores, which is the scoring formula that the majority of lenders use.

And neither of them are FREE!  You get the ‘free score’ or ‘free reports’ after enrolling with… or signing up for….. 

Remember, if you have to give credit card information to get something, IT ISN’T FREE.

WHAT TO DO

For much less than the several hundred dollars per year they charge, you can check your own reports.   Go to www.annualcreditreport.com to get the no-cost reports you’re entitled to each year.  Because we all get three of them, one from each bureau, you can monitor them throughout the year by checking a different one every four months.  Couples with shared accounts can utilize their combined 6 reports each year to check a different one every two months for year-round, effective monitoring. 

Look for accounts you don’t recognize, balances on closed accounts, late payments on accounts that were never late, unknown addresses, incorrect birthdays and social security numbers, and misspelled names.  This article has information on how to request correction of the errors you find.

To get your scores, we strongly recommend that you only pay for FICO scores.  Any other scores are not an apples-to-apples comparison close to the scores that lenders use.  You can go right to the FICO source to get your TransUnion and Equifax FICO scores, with the credit reports, by clicking here.  They are $16 each and you can contact us for current discounts.

NOTE: In February 2009, Experian took away the consumers’ right to get their own Experian FICO score.

Some people have their friend or relative in the banking or mortgage industry get their credit report with scores for them.  This does show actual FICO scores, and they are the exact ones that lender uses.  However, having a company obtain your credit report will result in a Hard Inquiry that counts against your scores.  Checking your own reports and scores is a Soft Inquiry and does not count against you.

SUMMARY
The companies that advertise “free” scores and/or reports, are counting on most people signing up and then NOT canceling their subscription before the trial period ends.  It may be 3, 4, or even 6 months before someone decides they are not using the service and want out.  By then, the company made some money and the consumer spent some on a product they may not have used or even understood.

Be very careful when enrolling in any of these “free” services.  Be sure you read all of the fine print, be sure you have an exit strategy in mind going into it, and mark your calendar or planner with the date you intend to cancel.

It DOES pay to learn about your credit and your scores.  However, you don’t have to pay to just to see your credit report.  And you can pay a lot less than $30 a month to get your true FICO scores.

Thanks, David, for a great question.

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- Always protect your ATM card the same as you would protect your cash.  If you have not yet copied the contents of your wallet, it’s time to do so.  Click here for more info.

- Protect your Personal Identification Number, your PIN.  Do not give the number to anyone else, do not write it down and on the card or in your wallet, do not use your birthday or street address for a PIN number. 

NOTE: ATM fraud is often committed by someone who knows the ATM cardholder. 

- Always take your receipt.  Even if the transaction was not completed, keep all papers associated with your ATM card.  When you’re ready to throw them away at home, shred them.

- Watch for unusual or bulkyATM machines.  In an ATM scam called “skimming”, the thieves attach a realistic looking electronic device to the ATM that can capture card information and PINS.  If the ATM is odd-looking to you, don’t use it.

- Practice personal safety, too.  Have everything ready when you get to the machine, don’t get your wallet out to retrieve the card while standing there.  Cover the keypad when entering your PIN.  Lock your car when you walk up to a machine.  Only use machines with ample lighting after dark.  Use common safety sense.

We all love the convenience of electronic banking.  Make sure you take measures to protect your finances and personal information at all times.

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The heavily advertised “free” reports you see on television and online are NOT your free annual reports the law provides for.  Prior to Congress passing these laws, the only way consumers could get copies of their credit reports was to pay for them.  So naturally when they became available for free, the credit bureaus developed ways to capture some of their lost credit report income.  Guess who actually is behind the singing pirates and freecreditreport.com??  Yep, Experian, one of the major credit bureaus.  They even offer opportunities for you to spend money when obtaining your FREE reports!

Their are only two legitimate websites to get your free, annual reports that you are entitled to by law:  www.annualcreditreport.com and www.ftc.gov.

NOTE: The Federal Trade Commission will direct consumers to annualcreditreport.com.

When you log onto the site to get your report, you will be asked to enter personal identification information, including your Social Security number.  Make sure your computer’s security systems are updated and look up at the website address line.  It should have an https://, not just http://.  The “S” means it is a secure site.  Knowing that you initiated the contact yourself and double checking for a secure site greatly reduces the likelihood of being on a phony site.

WHAT TO DO
Your free reports are FREE.  The credit bureaus will ‘offer’ lots of different items for purchase.  These include monitoring services and scores.  And these advertised items are right up front, before you can even get to your credit report.  Just say NO.  Sometimes the button says “NO THANKS”; whatever it says, click it to save yourself some money and get to your free annual report.

NOTE: The credit scores offered by the credit bureaus are usually NOT actual FICO scores, the ones that most financial companies use.  These ‘consumer education’ scores are not an apples-to-apples comparison with what your lender sees – save your money, don’t buy them.  You can get your actual FICO scores here.   They are $16 each and include a full report; contact us for discount codes.

Remember, any time you have to give credit card information for something “FREE”, it isn’t free!  With determination and a small amount of time, you can check your own credit reports at no cost. 

We recommend checking one of your three free ones every four months; this gives you regular, periodic monitoring throughout the year.  Simply mark your calendar or planner to log on and get  your credit report.    When reviewing your credit report, look for unknown accounts, unusual or incorrect balances on your existing accounts, inquiries for new credit that you don’t recognize, extra social security numbers or names that don’t belong to you.  Click here for tips on what to do when you find errors on your reports.

We offer a Credit Analysis for only $100 that includes a review of your current credit report and provides you with strategies to positively impact and build your credit scores.  Contact us today to order yours.

Thanks, David, for a great question that led to this article!

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1) Keep your personal and tax information locked up.  Whether it is at the office or at home, don’t leave your pile of tax documents out in plain sight.  Your W-2 or 1099 have your social security number on it, as do any year-end interest and dividend statements from banks and financial institutions.

2) When you take your tax information anywhere, keep it with you.  Do not leave your briefcase or file folders in your vehicle in plain sight.  At the very least lock them in your trunk.  Carrying them with you may seem inconvenient, however dealing with identity theft is truly a time consuming inconvenience.

3) Keep all of your computer security updated; this includes your firewall, anti-spyware and anti-virus programs.  Many people store sensitive and tax data on their home computers thereby making computer security a priority.  When you electronically file your taxes, be sure to use a strong, distinct password – NOT your usual password that you use on all your other accounts.  After your return is sent, you may want to store the tax file on a CD or flash drive that you can lock up rather than leaving all of that information on the computer.

4) Do some background checks on the tax preparer you hire by checking with the Better Business Bureau; make sure they are certified in their field, ask for references.  Ask how your tax information will be stored and how many people have access to it.  If stored electronically, will it be encrypted?  You have a right to ask these questions ahead of time to safeguard your information.

5) Conduct your tax business with privacy.  Some businesses are set up in shopping centers or public areas, which are not typically sound proof or protected from a hopeful thief with binoculars.

6) Be sure to place your outgoing mail in a secure, locked box.  You may want to take your tax documents directly to a post office and place them in the indoor mail slot.  Thieves know that there is an enormous amount of personal information going into the mail system at this time of year.  Minimize your risk by going directly to the source.  At the very least use an official blue USPS mailbox toward the end of the day right before the last pickup so your info is not sitting there for very long. 

7) After you file your taxes, shred any statements or paperwork you do not need to keep.  Store your tax returns in a sturdy safe or locked file cabinet along with your other sensitive documents.  Most people have the required seven year’s worth of tax returns on hand and ID thieves know it, so keep them locked up and hard to get to.  Consider using a different label on the box as a distraction: pet records (whether you have a pet or not), farm equipment (whether you have a farm or not), dental records….you get the picture – something an identity thief won’t look twice at.

8) There is an increase in scams at tax time.  If you receive any emails wanting your social security number or other financial information, you can send it to the Federal Trade Commission at spam@uce.gov so they can investigate it.  Remember that the Internal Revenue Service (IRS) does not send email notifications for electronic audits or refunds.  If something that says it is from the IRS seems suspicious, call their Taxpayers Advocate line at 877-777-4778.

Use these tips to make tax time less likely to become ID theft time.  The old addage of an ounce of prevention certainly applies when it comes to protecting your personal financial information.

We provide credit education on our website because we believe people want accurate information to understand their credit and what they can do about it.  For more specific recommendations based on your personal credit report, contact us for your Credit Analysis.  For only $100 you get a complete credit report review along with information on how to build your credit scores using the five parts of the credit scoring formula.

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However, there are some things that consumers should be aware of, especially if they are planning a major purchase in the next year and need to have a certain credit score to qualify.

When you apply for any new credit account, it is a Hard Inquiry and counts against your score.  So simply applying for the no payments/no interest account at a store will count against you.  Getting qualified for the account will add a new trade line to your credit file; it will most likely be listed as a retail revolving account.  These accounts are often issued with a credit limit that is right at the purchase amount, so if you bought a total of $4500 of furniture, the credit limit on that new account may be $4500.  If you do a $2200 jewelry store purchase, the credit limit on the new account may be $2200.  With no payments for one year, the balance will not change and this account will consistently be reflected on your credit report as ‘maxed out’, meaning that the entire credit limit has been used.

Account balances are included in the second largest part of the credit score.  The difference between the credit limit on each account and that account’s balance is the utilization ratio.  When balances are over half of the credit limit, scores usually go down.  When balances reach the credit limit, scores can drop anywhere from 10 to 45 points. 

NOTE: Keeping account balances under 25% of the credit limit is optimal.

WHAT TO DO

Having this information and being aware of potential credit rating consequences of opening new accounts will help you make informed decisions.  Ask the company/store before you apply as to their general policy of granting credit accounts, is it just for the amount of the purchase, or do they give it in certain increments such as a $5000 account or a $10000 account.  Make sure there are no pre-payment penalties.  Determine what your payoff date will be to avoid the interest fees and then set aside some money each month as a ‘payment’ toward that account payoff, if you are not sending in actual payments for the account.

If you are looking to purchase a home in the next year, you may want to reconsider that furniture purchase until after you have closed on the house.  This article has more credit tips for home buyers.

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This month’s topic is Credit Resolution Problems.

WHEN:  The first Tuesday of every month.   February 2, 2010 from 4:30 to 6 :30 only – Arizona local time.

HOW:  Call 602-258-1212 to ask your questions on this month’s topic.

WHO: Open to the public.  The volunteer lawyers are in Arizona and have answers pertaining to Arizona law.

For more information, visit the State Bar of Arizona’s website.

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After you have removed the SS and excess credit cards and locked them in a safe place, take all of the items out of your wallet.  Copy both sides of your license, debit cards, insurance cards – everything that you regularly carry.  Then lock those pieces of paper up with the credit cards in the safe place.  If your wallet goes missing, you have all of the pertinent account numbers, and phone numbers, to contact every company you need to for immediate deactivation or closure of those accounts that may be at risk.

You can get more information on what to do when your wallet is lost or stolen here.  Print a copy of this list and put it with your financial papers so it is easy to find if you ever need it.  Please pass this info on to your friends and family so they have a copy, too.

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