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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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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A paid collection is a negative item.  Just because it has a zero balance does not mean it goes away or changes to a positive item.

WHAT TO DO
If you receive a collection call, tell them to put it in writing and give you debt validation.  DO NOT say yes or maybe to anything.  You really don’t know who you are talking to or if they are a legitimate company that legitimately owns the alleged debt.

If you receive a collection letter, request debt validation within 30 days of receiving the letter.  If you do not challenge it within 30 days, they can assume you agree with the collection and treat it as valid.

Go back to the original company for a statement of account history to determine how much, if any, you did actually owe.

Pay the original company if possible.

If you must pay a collection agency, negotiate for your credit rating along with negotiating how much you will pay.

This article has more information on what to do before you pay a collection.

Remember, paying off a negative item such as a collection account DOES NOT make it go away.  It can stay on your credit report for up to seven and a half years from the date of the original delinquency.  Read more about how long things stay on credit reports here.

Getting a credit check-up from Complete Credit Services gives you information on how to pay things off in a way that can help your credit, along with detailed strategies on the do’s and don’ts to help the five parts of your credit score.  This $100 investment can pay off in your financial future with higher credit scores, lower interest rates and even insurance rate savings.  Contact us today to get yours.

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Here are some tips to protect your personal information and your credit:

1) Keep your personal and tax information locked up.  Whether at home or the office, do not leave a 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 taking tax documents anywhere, keep them 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) Ask your tax preparer 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 to safeguard your information.

5) Place ALL outgoing mail in a secure locked box.  Take tax documents directly to a post office and place them in the indoor mail slot.  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. 

6) After your taxes are filed, shred any statements or paperwork you do not need to keep.  Store tax returns in a sturdy safe or in a locked file cabinet along with 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.

7) Beware of email scams which tend to increase at tax time.  If you receive any emails wanting your social security number or other financial information, you should 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 the IRS Taxpayers Advocate line at 877-777-4778.

Use these tips to make tax time less likely to become ID theft time. 

Complete Credit Services is proud to provide credit education and to be a source of accurate information to help people understand their credit reports and scores. 

We offer a Credit Check-Up for specific recommendations based on your personal credit report.  You can contact us for your Credit Check-Up that includes a complete credit report review along with information on how to build your credit scores using the five parts of the credit scoring formula for only $100.

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THE BANKRUPTCY ITSELF
Whether you file Chapter 7 or Chapter 13, it will be listed in the Public Record section of your credit report.  This item can stay on your credit for 10 years from the filing date for Chapter 7.  For a completed Chapter 13 bankruptcy, the public record stays on for 7 years from the filing date.  A dismissed, or unfinished, Chapter 13 can stay on for ten years from the date filed.  Click here for more information on how long things can stay on credit reports.

NOTE: The county recorders offices do not report to the credit bureaus.  The credit bureaus go out and retrieve the public records.

ACCOUNTS INCLUDED IN THE BANKRUPTCY
In Chapter 7, the accounts that were discharged through the BK should have zero balance listed on the credit report.  This is a common error that we see on credit reports after bankruptcy filings. 

NOTE: Accounts in repayment through a Chapter 13 will continue to show a balance as they get paid off over time.

 The Chapter 7 accounts themselves, which are listed as “included in bankruptcy”, can stay on the credit file for seven years from the filing date.  Late payments associated with these accounts will come off 7 years from the date reported.

WHAT TO DO
Check all three credit reports two months after a Chapter 7 discharge.  If you find balances on any of the accounts included in the BK, contact the credit bureaus to request those balances be removed.

Watch for late payments reported after the BK filing date and request removal for any that you find.

Continue to monitor your credit regularly to check for any collection accounts listed for items that were discharged in the BK.

Begin a credit rebuilding plan immediately.  Yes, a bankruptcy filing is very detrimental to credit scores.  However, many people use this fresh start to learn how to use credit responsibly as part of their financial fitness program.

CONTACT US FOR YOUR CREDIT CHECK-UP
We offer a Credit Analysis for only $100 that identifies errors and gives our clients the information and step-by-step details on how to rebuild their credit for their future goals.  Call or email today to get yours.

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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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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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