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.

.

This rumor has been around for more than six years and seems to resurface every so often.  Snopes is a good place to check this type of email rumors.  They also have links to the Federal Communications Commission, FCC, and the Federal Trade Commission, FTC.  Both of these agencies have information about the cell phone rumor; the FCC’s most recent press release was in September 2009 and plainly states there is no truth to the rumor.  The FTC also has a statement on their website that says consumers do not have to register their cell phones on the Do Not Call directory.

Why is this important to getting better credit scores?

Because we include this information in our clients’ credit building plan that they receive as part of our consulting services.  Once your credit report is corrected, you want to protect it.  A common source of identity theft is pre-approved credit offers sitting in unlocked mailboxes.  So we recommend reducing the amount of solicitations you receive by taking the following steps.  We add the Do Not Call Registry on the list because most people don’t like the tele-marketing phone calls.

1) Do the Opt-Out.  Under the Fair Credit Reporting Act (FCRA), the Consumer Credit Reporting Companies are permitted to include your name on lists used by creditors or insurers to make firm offers of credit or insurance that are not initiated by you.  By opting out, you can have your name excluded from this list.  The registration is free.

2) Register with the Direct Marketing Association.  You can choose to be removed from DMA mailing, phone and email lists.  The registration is free.

3) Opt-Out with the companies you already have accounts with.  Most credit card, retail store and fuel card companies share your personal information with other divisions or companies.  You can Opt-Out by locating the company’s Privacy Policy online or in the small print booklet you received from them.   You can Opt-Out of both “affiliated” and “non-affiliated” companies for maximum reduction of solicitations.  Be careful to only Opt-Out of the Privacy Statement, not the Changes to Your Account as this could prompt the company to close the account. 

It is important to safeguard your credit.  Signing up to be excluded from calling and mailing lists can also save time from opening and shredding unwanted mail and from answering unwanted phone calls.

Learn more about Identity Theft Prevention here.

.

WHAT IT IS

Companies that advertise “Stop Foreclosure Now”, “We can save your home.  Guaranteed”, and other similar promises.  When people are scared or uncertain, and they feel their family’s future is in jeopardy, these ads can look like a lifeline.  And unscrupulous companies are counting on the emotions of troubled homeowners for their profits.

Some homeowners are receiving official-looking notices in their mail that seem to be telling them exactly what they want to hear to be able to stay in their home. 

WHAT HAPPENS
The companies to be aware of usually ask for money up front to ‘modify a delinquent mortgage’ or to ‘provide counseling services’.  They may pressure homeowners to sign over their deed or surrender the title to their home so that they can use a “rent-to-buy-back” plan.  Others tell homeowners who are concerned and not yet delinquent on their mortgage to stop paying the mortgage so it can be late and they have a better chance of qualifying for help.

The Federal Trade Commission and the federal government’s Making Home Affordable websites both have information on what to watch for to protect yourself from these types of scams.

WHAT TO DO

Get educated.  You’ve already started doing that by reading this article. 

Contact your own bank or mortgage servicing company first.  They have a direct interest in helping you stay in your home.  

The Credit Info Center has tips on how to apply for a loan modification including info on writing a hardship letter.

DON’T PAY MONEY UP FRONT without knowing exactly what you’re getting and who you’re getting it from.  Do some research: search for the company on Google to find out who the parent company is. 

Check with the Better Business Bureau to see if they have received any complaints about this company.  And remember to contact your own bank or mortgage company first!  They can tell you which legitimate companies they work with.

Get EVERYTHING in writing!  Take notes on the dates you talk to company representatives, what their name is, what they said.  You have to be proactive because nobody is going to care about your home and your loan as much as you do.

.

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.

.

Keep your computer’s security systems updated.  If you have not done an Anti-Virus and/or firewall update recently, do so now.  If you have not done a hard drive back-up lately, it might be a good time to perform your back-up.

The Federal Trade Commission (FTC) issued a consumer warning this week that includes the following recommendations:

Do NOT give out personal or financial information to solicitors; this includes your Social Security Number and bank account numbers.

Give donations directly to the charity, NOT to solicitors for the charity who often keep a portion of the donations for themselves.

Check out the charity before you donate at the Better Business Bureau’s Wise Giving Alliance.

Additionally, the U.S. Computer Emergency Readiness Team has issued a warning of potential email scams that includes information on fraudulent search engine results that may lead to malicious links.

It is always in your best interest to be cautious and diligent when doing financial transactions online.  When doing so during an emotional event, extra care is necessary to be certain that your donations and good intentions go where you want them to, and your personal financial well-being is not affected.

.

Spoofing is often used by identity thieves to pretend to be someone in an official capacity, calling to persuade unsuspecting victims to give personal or financial information.  Because they can easily scare people by claiming there may be some suspicious activity on their bank account, it is hard to resist giving the information asked for to protect financial accounts. 

WHAT TO DO TO PROTECT YOURSELF

1) Realize your caller ID may not be showing you exactly who is calling – don’t assume it is accurate.

2) NEVER give financial or personal information out over the phone unless you initiated the call.

3) Remember that your bank already knows your account numbers and doesn’t need to ask you for them.

4) Be suspicious of callers asking for “confirmation” of your info, including social security number, credit card numbers and credit card security codes.

5)  Tell them you will call back with the requested information, then hang up and call your actual bank or credit card company yourself.  Look on your statements or the back of the credit card for the customer service phone number.

6) If you already gave your information over the phone, contact your bank or financial company to tell them you may have been scammed.

7) Do not call phone numbers listed in email “alerts”.  Look up the number for that account from your own statements and call to ask about it.

8) Check your account statements each month for suspicious or unknown activity. 

9) Check your credit reports three times a year to be vigilant for fraudulent activity.  You can do this at no cost by going to www.annualcreditreport.com.  You get one free from each of the three credit bureaus every year, so check one bureau every four months for monitoring purposes.

10) Report phishing and other scams to the Federal Trade Commission.

.

Check it out here.  Be sure to send it to moms, aunts, sisters and anyone else you care about.  You can also include this link for more Identity Theft Prevention tips from us.

   We are seeing an increase in the number of people with questions about foreclosures, short sales, and loan modifications.  This is a complex issue, and a very personal one for those facing the possibility of losing their home. 

There are credit consequences to a foreclosure; however, this article is about the growing number of scams and unscrupulous companies trying to make some money by taking advantage of the fear and confusion about foreclosure.

Last week National Public Radio talked about this topic and gave updates on the government crackdown of phony foreclosure rescue schemes.  They warned that many of these scams request money up front which is often an indicator that something is not legitimate and is actually illegal in several states.

TYPES OF SCAMS

Phony Counseling

The consumer is told that the company, for a fee, can negotiate a deal with the lender to save the house.  The consumer is usually told not to contact the lender, their lawyer or a credit counselor. Sometimes, they require the homeowner to make mortgage payments directly to them during the lender negotiations. 

Bait and Switch 

The homeowner thinks they are signing documents for a new loan to make the existing mortgage current.  In reality, the signed documents surrender title of the house to the scam artist. 

Rent-to-Buy Scheme

The homeowner is told to give up the title as part of the deal to remain in the home as a renter and buy it back in a few years.  People are often told that surrendering the title permits a borrower with a better credit rating to get a loan to prevent foreclosure of the home.  This can be a double disaster as the scam artist takes most of the home’s equity and when the new borrower defaults on the loan, the original homeowner-turned-renter is evicted.

Bankruptcy Foreclosure

The scam artist promises lender negotiation or a loan refinance for an upfront fee.  They take the homeowner's money and file a bankruptcy case in the homeowner's name, often without telling them.  Even though a bankruptcy (BK) filing can temporarily stop the foreclosure process, this can be disastrous to the owner financially, they can still lose the home and their credit will be severely impacted with the BK filing.

WATCH FOR THESE MESSAGES

"Stop Foreclosure Now!"
"We Can Save Your Home. Guaranteed.  Free Consultation."
"We have special relationships within many banks that can speed up case approvals.”           

OTHER RED FLAGS TO AVOID

- A business that guarantees to stop the foreclosure process no matter what.
– Instructions for NO contact with your lender, lawyer or housing counselor.
– A business that only accepts payment by cashier's check or wire transfer.
– Instructions to make all mortgage payments directly to them instead of your mortgage company.
– Anyone that offers to fill out your paperwork for you. 

Some companies are even telling people "I promise you, you're not going to lose your house" and "Don't call your lender, they are just going to lie to you".    They know people are worried and unsure about what to do, and they have a knack for saying enough of the right things to get what they want. 

Many homeowners end up spending countless hours on the phone trying to get back to the person who told them these things, looking for the paperwork or documents they were promised, wondering what the next step is because they are still getting notices from their lender.  Meanwhile, the foreclosure clock is ticking and precious time goes by with no results to help them keep their home.

WHAT TO DO
 

The Federal Trade Commission provides more details about these scams, what to look for and avoid, along with where to get more information.  If you are considering using one of these companies, contact the Better Business Bureau before paying for any services.  Request a written agreement that you can read before signing to see exactly what they are going to do, what the time frame is to accomplish it in, and what their refund policy looks like.

Check with your lender first.  They are the direct line to stopping or slowing the foreclosure process.  Keep in mind that the lending industry in still changing and will be for some time.  There are new programs announced and publicized in the media, but the guidelines and processes for those programs are not always completely in place in each lending company right away. 

Protect yourself by writing EVERYTHING down: who you talked to, their employee number, the date and time, what they are doing, what you are supposed to do.  Ask for written confirmation to have an additional  record of what you were told.  You can also write down your understanding of the conversation and agreements and send it to them as a written record.

If you believe you have been the victim of a foreclosure or loan scam, report it to the Better Business Bureau, the Federal Trade Commission and your State Attorney General's office.  You may also want to contact your federal congressional representatives to make them aware of the situation.

As Eileen Harrington, acting director of the Bureau of Consumer Protection at the Federal Trade Commission (FTC) said, “People who make a living defrauding consumers are quite opportunistic.”  As soon as the FTC squashes one website, several others pop up to replace it.

WHAT TO WATCH FOR
EMAILS
Emails asking consumers for bank account information to deposit their share of the stimulus directly into their bank account.  The con artist then uses the information to empty the bank accounts, leaving the consumer with no money.

Another email asks for information to “verify” qualifications for a stimulus payment.  That “verification” information is then used for identity theft.

Some emails don’t ask directly for any information from the consumer but offer links to find out how to qualify for stimulus funds.  When the links are opened they download malicious software or spyware making the consumer vulnerable to identity theft.

WEBSITES
Beware of these website banners or titles:
Get Your Share
How to Get Your Free Stimulus Grant Before It’s Too Late!
President Obama Grants.com (or some variation)
Official Stimulus Grants.com  (or some variation)
Avoid Government-Grant Information Scams (this site’s “top recommendations” cleverly leads to the scam sites)

Most of the con artist websites claim that you can get information about hundreds of government grants that are worth tens of thousands of dollars, for only some small shipping and handling fees.  These usually range from $1 to $3 and are required to be paid by credit card. 

However, buried in the “terms and conditions” section, are the monthly fees which start being charged after the few days of the “free trial”.   These charges can include a one-time fee of $99 plus $50 a month for access to the “online resource center”.  Typical fees range from $35 to more than $100 per month.  And the consumer gets nothing.

THE FACTS
Most individual consumers will not qualify for government grants.  There are no grants to pay off your credit cards.

This is the site with information on the real government grants: www.grants.gov

To follow the stimulus funds spending go to www.recovery.gov

Remember, if it sounds too good to be true, it probably is.  Save yourself the expense, the time and frustration by doing some research before signing up for any quick-money fix packages.

If you do find that you have been the victim of identity theft, contact us for Personal Credit Consulting.  Our years of experience have provided successful credit report recovery after identity theft and we are here to help you, too.