YOU CAN CHECK YOUR CREDIT REPORT AT NO COST TO YOU
Everyone is entitled to one free report annually from each of the three credit bureaus for a total of THREE free reports each year. 

The website is www.annualcreditreport.com

If you have to give your credit card information at a website, it is NOT a free report!  The sites that are advertised on TV and the internet are NOT the sites to get your no cost report.  You typically have to sign up for a service at those sites to be able to get a credit report.  By the way, most of them are owned by the credit bureaus.  This article has more info on free credit reports.

YOU CAN PURCHASE YOUR OWN CREDIT SCORES

They are not usually free.  Some banks and credit cards provide a benefit to their customers of credit monitoring and/or credit scores; that is the only way you might get them at no cost.  Again, the ‘free credit score’ sites that are being advertised require you to sign up for something.

Most lenders use the FICO scoring formula.  Consumers can get their own FICO scores at the FICO site, click here.  They are about $16 each and you do get a current credit report with them.  Contact us for current discount codes to save about $3 on each one.

These are the closest a consumer can get to the score that a lender will be looking at.  There are many non-FICO scores out there and they are generally NOT an apples-to-apples comparison to what lenders use; these so called “FAKO” scores are usually higher.  See this article for more information on ‘free’ credit scores.

CHECKING YOUR OWN CREDIT DOES NOT COUNT AGAINST YOUR SCORE

When you check your own credit reports and scores, it will show up on your credit as a ’soft’ inquiry and does not impact your score.  When you authorize a lender or a company to check your credit, it is a ‘hard’ inquiry and will count against your score.  There are ways to minimize the hit on your credit score when you are rate shopping for mortgages, auto loans and student loans. You can read more about Inquiries here. 

NOTE: When you say yes to the cashier that asks if you want to save 10% on your purchase by applying for their store account, you will get a hard inquiry.  It hurts your score whether you are approved for the account or not.

Checking your own credit is a great idea if you are planning to make a major purchase.  Monitoring your own credit is an important part of identity theft prevention. Get the facts.  Know the product you are getting and make sure you don’t overpay for something you are legally entitled to.

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1) EMPTY YOUR WALLET

     Only carry the credit cards you are going to use on your trip.  Do NOT carry your social security card in your wallet.  Leave the checkbook and blank checks at home.

2) NOTIFY YOUR BANK AND CREDIT CARD COMPANY OF YOUR TRAVEL PLANS

     They will know the upcoming purchases in the place you’re visiting are legitimate and will also know that use of your account in a totally different place could be a red flag for fraud.

3) HOLD THE MAIL AND NEWSPAPER DELIVERY

     Identity thieves love a pile of mail and other thieves look at a stack of unread newspapers as a welcome sign indicating that nobody is home.

4) USE SOCIAL MEDIA AFTER YOUR TRIP

     When you tell the Facebook, MySpace or LinkedIn world that you are going on vacation,  you are broadcasting a vacant house with lots of documents that contain wonderful personal information inside.  Wait until after your trip to post pictures and talk about how much fun you had.

5) KEEP YOUR CREDIT AND DEBIT CARD IN SIGHT

     Whether you’re on vacation or in your home town, always keep your card with you or in your line of sight.   Skimming machines and cell phone cameras make it much easier for a potential thief to capture all of your account information.  The slight inconvenience of walking your bill and payment to the cashier can save you time and money as an identity theft prevention measure.

This article has more information on protecting your credit while on vacation and includes links for a checklist on what to do if identity theft happens to you.

Happy Travels!

NOTE: The information on this website is for education purposes only and is not intended as legal advice or a guarantee of identity theft prevention.

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This month’s topic is Foreclosure and Bankruptcy.

WHEN:  The first Tuesday of every month.   The next one is July 6, 2010 from 5:00 to 7 :00 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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And in the conclusion of this study by Sallie Mae, How Undergraduate Students Use Credit Cards, they state: ”College students need access to financial options that combine financial education and parental involvement.”  This from their findings that  84 percent of college students said they were interested in pursuing some areas of education to increase financial literacy. 

In response to all of the above, and based on more than 7 years of credit consulting experience, I have developed a Credit Building Plan specifically for students and young adults.  For only $25, they get their own guide that covers proven steps that I used to help my own son build his credit when he turned 18 and includes lots of information about credit reports and credit scores.  It has basic info as well as the actual strategies that I use today with clients that need credit consulting services.  

Although the guide is designed for students ages 17 and older, parents and adults that have purchased this guide for their children or as gifts have found useful information for their own credit situations, too.  It also makes a great introduction to credit for younger teens.

NOTE: Recent and continuing changes to financial regulations have made getting credit without a cosigner a bit more challenging for people under 21.

Contact me, Dana, with any questions you may have, or leave a comment and I can address it here on the website. 

Your student Credit Building Plan can be emailed or mailed to you, whichever you prefer.  Click here to get yours now. 

NOTE: I also do credit education presentations at local high schools and colleges in the Tucson area as part of community outreach.

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Lenders who have extended credit to you report your account information to the three major credit bureaus, Experian, Equifax and TransUnion.  This includes what types of credit you use, the length of time your accounts have been open, and whether you’ve paid your bills on time.  They also report how much credit you’ve used and how often you apply for new credit accounts. 

So there are thousands of companies reporting information about millions of consumers.  That’s a lot of data to input and transmit each and every month.  And most of it starts out with people – people who fill out credit or loan applications and people who process those applications.

There are four reasons that credit report errors typically happen. 

1) A consumer applied for credit under different names.  Example: Robert Jones, Bob Jones, etc.

2) There was a clerical error in reading or entering name or address information from a hand-written application.

3) A social security number was misread or transposed by the lender or given incorrectly by the consumer.

4) Loan or credit card payments were inadvertently applied to the wrong account.

Yes, all of these things really do happen.  As a Credit Consultant, I’ve seen credit reports with four different social security numbers listed for one person.  One client had the same name as someone else who went to the same hospital he did and that other person did not give their social security number so my client got all the other guy’s bills.  We’re talking over $20,000 worth of medical collections on his credit report that did not belong to him!

WHAT TO DO
Check your own credit report for errors.  You can do this at NO cost and checking your own credit does not count against your scores.

NOTE: The TV and Internet commercials for free credit report.com are NOT the place to go for NO COST credit reports.  You get a ‘free’ credit report when you enroll in their services.  This video from the Federal Trade Commission (FTC) has good info.

Look for unknown accounts on your credit file, unusual or incorrect balances on your existing accounts, inquiries for new credit that you do not recognize, and of course, incorrect names and social security numbers.

Report the errors to all three credit bureaus, even if you only review one of your three reports.  The FTC provides a sample dispute letter and info on credit report errors.   This article on our website also provides tips for disputing  information with the credit bureaus.

Yes, errors happen on credit reports.  It doesn’t mean that you’re stuck with them.  The investment of your time to review and correct your own reports can pay off with good credit and higher scores in your financial future.

For a comprehensive Credit Analysis for only $100, contact us today.  You’ll receive effective strategies to build your credit using each of the five parts of the FICO score.

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Our article last week talked about credit monitoring and the difference between paying for a service and doing it yourself.  Another step that you as a consumer can take is to place a Security Freeze on your credit report with the three major credit bureaus, TransUnion, Equifax and Experian.  Most states have laws allowing consumers to do the freeze; you can find out your state’s requirements and related costs at the Consumer’s Union website here.

A security freeze is supposed to block access to, or “freeze”, a consumer’s credit report so that an unauthorized person trying to open a new credit account in the consumer’s name cannot do so.  The credit freeze should not allow the company that is considering issuing credit or a loan to check the credit report, in effect, stopping the lending approval process.

The Security Freeze works well for people who do not plan on applying for credit in the near future as there is a cost to the consumer to place the freeze, to temporarily lift it for loan applications, and then to reaaply it.

And just like the monitoring services, you want to check your credit report BEFORE placing a security freeze to determine that there are no fraudulent accounts listed on your credit file.  The Security Freeze will not stop or close unauthorized existing accounts, it only stops the opening of new accounts in a person’s name.  It also does not stop existing creditors from seeing your credit reports, only new ones.

The Privacy Rights Clearinghouse has more info on credit freezes here.  See #4 on the page after you click through. 

Remember, for any credit monitoring to be effective, you should check your own credit report regularly and prior to signing up for monitoring or credit freezes.  Then continue to check your credit report throughout the year.  And of course, practice identity theft prevention in all aspects of your personal and professional life.

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Most credit monitoring services issue alerts when there is a new inquiry on your credit report.   This can be helpful to catch a potential fraud activity if you get an alert that Sears just had an inquiry for your credit when you know you have not applied for credit at Sears. 

However, credit monitoring does NOT do anything about existing errors on credit reports.  If there was a fraudulent account on your credit file and you sign up for credit monitoring and never look at your full credit reports, the fraud could continue until who-knows-when.  Additionally, some credit monitoring services only check one or two of the three major credit bureaus.  To do true monitoring, you want a service that covers all three bureaus as not every financial company pulls your credit (creating an inquiry) from all three bureaus.  If you’re only monitoring one bureau, and fraudulent accounts are being opened at companies that check one of the other two bureaus’ reports, you won’t know about it.

WHAT TO DO
> Check your own credit reports regularly.  You can do this at no cost.   See #10 on this Identity Theft Prevention list.  Do this BEFORE signing up for monitoring services and continue to do so regularly throughout the year.  Each consumer in America gets at least three no-cost reports each year.  You can check one of them every four months for continuous credit monitoring.

> When reviewing your credit report, look for unknown accounts; unusual or incorrect balances on your existing accounts; inquiries that you don’t recognize; and extra social security numbers or names that don’t belong to you.  Contact all three credit bureaus to correct the errors, even if you only review one of your reports.  By law, they must investigate the items you dispute and reply within 45 days.

> Read the fine print in any credit monitoring agreement before you sign up, including their cancellation policy and process.  The Identity Theft Resource Center has a great information sheet on this topic.

> Remember that most lenders in the U.S. use FICO scores for their credit and loan approval process.   Some monitoring services include a ‘credit score’ with your service.  If it is not a FICO score, it is not an apples-to-apples comparison to what a lender will be looking at. 

Yes, we’re all busy these days.  And we want fewer things to keep track of and worry about.  This is a friendly reminder against complacency.  Signing up for a monitoring service means you have a TOOL to assist you in your credit building and protection efforts.  Stay on top of it by staying tuned into it.

You can get a Credit Check-Up that gives you an analysis of your current credit situation as well as strategies to build your credit for only $100.  Contact us today to order yours.

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FICO scores, based on the formula developed by the Fair Isaacs Corporation, are the industry standard.  All the other scores are ‘consumer scores’, most of them developed and marketed by the credit bureaus to compete with FICO scores and get a piece of the revenue generated by consumers’ growing awareness of the importance of credit scores.  These consumer scores are generally not an apples-to-apples comparison of scores so when someone takes their ‘credit’ score to their lender, they are often disappointed to find out their actual FICO score is much different than what they purchased.

I just read an article in Stephen Snyder’s newsletter detailing an account from a reader who was told by an Experian representative that none of the three credit bureaus used the FICO score formula any more.  This is completely inaccurate.   As the industry standard, FICO scores are used by:

* Over 4,000 financial services providers

* The two largest mortgage securitization companies

* Nearly 75% of the top global banks

* The top 10 U.S. property and casualty insurers

* More than 100 retailers, including half of the top 50 retailers in the US

* 8 of the top 10 pharmaceuticals companies

So, again, we say, DO NOT SPEND YOUR MONEY ON ANY SCORES OTHER THAN FICO SCORES.  All of the others are just informational, they do not give you an accurate picture of how your lender will see you.  Keep in mind, there is a reason the ‘consumer scores’ are being heavily advertised on pricey television commercials – they expect to make lots of money.  Make sure you’re getting something that is beneficial to you, not just some three digit number. 

NOTE: “FREE” credit scores that require you to give your credit card number and sign up for something are not FREE!  More info here.

You can get two of your FICO scores, with complete credit reports, for $16 each.  Contact us for current discount codes that can save 15 – 20%, making them about $13 each.

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Many companies include a credit check as part of the background check on prospective employees.  Applicants for positions that deal directly with money and finances will most likely have a credit check done as part of their application process.  Certain government positions have criteria that they glean from credit reports.  For instance, this is right off the Transportation Security Administration’s website for employment as an airport screener:
“If your credit check reveals any of the following, YOU WILL NOT BE ELIGIBLE FOR THIS POSITION:
*Defaulted on $7,500 or more in debt (excluding certain circumstances of bankruptcy).
*Owe any delinquent Federal or State taxes.
*Owe any past due child support payments.”

We were recently included in a local news piece about credit and employment; you can see the entire video from KGUN9 here.  Additional information we provided in the interview is that some jobs, such as contractors with military connections, have security clearances.   Credit checks are often a routine part of monitoring employees for their security clearance status.

Sometimes bad credit happens through no fault of the consumer.  If they have been the victim of identity theft and had fraudulent use of their credit accounts, their credit report may include negative information due to the fraud.  Sometimes there are circumstances that led to the credit challenges such as loss of job or medical reasons.

WHAT TO DO
* Check your own credit regularly.   We can get three free credit reports each year, one from each of the three credit bureaus.   Check one of them every four months for year-round monitoring to look for errors that may have a negative affect.  Go to www.annualcreditreport.com.

NOTE: The freecreditreport site is NOT the place to get the reports that every consumer is entitled to under the Fair Credit Reporting Act.  Remember, if you have to sign up for something and give your credit card number, it is NOT free!

NOTE: Save your money and don’t buy the credit scores that are offered when you get your no-cost reports.  They are probably not FICO scores, which is what most lenders use.  If you’re looking at any other score besides a FICO score, you’re not getting a side-be-side comparison of what your lender will look at.

* Correct errors that you find on your credit report with all three credit bureaus, even if you only reviewed one report.  This article has tips for disputing errors with the credit bureaus.

* Tell the prospective employer about any credit issues before they do the credit check.  If there are extenuating circumstances, let them know and be sure to tell them what you are doing to correct and/or rebuild your credit.  We have written letters for our clients stating that they have hired us for credit consulting and they then present the letter with their application.

* Beware of employment scams that can actually do damage to your credit.

* Review the Job Seekers Guide at Privacy Rights Clearinghouse to know your consumer rights.

Credit plays a major role in numerous areas of daily life so it is beneficial to learn about your credit, how to grow your scores and protect yourself against identity theft.  You can get a Credit Check-up for only $100 that can give you a jump start to optimizing your credit for employment purposes and for your financial future.  Contact us today to order yours.

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We offer Credit Building 101 for Students.  This do-it-yourself guide covers everything from what is a credit report and why does it matter, to getting that first credit account and using it to build up a good credit score, along with a checklist and timeline to track credit building progress.   This comprehensive guide is available now for only $50 and is a great gift for the high school or college student in your life.  Order yours today by clicking here.

Give the gift of good credit and you can help them learn about credit the RIGHT WAY, right from the start.

Local high schools and colleges can benefit from our community outreach as we offer credit education presentations for students at no cost.  Students in government and business classes have been very receptive and inquistive about credit and we are scheduling fall presentations now.   Contact us for more info. 

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