Archive for the ‘Identity Protection’ Category

How To Improve Your Credit Score In Just Three Months

Friday, March 22nd, 2013

People with a poor credit history are usually required to pay higher interest rates on future loans. What is the surest way to improve your credit score in the shortest possible time? Well, there isn’t any magic wand, and no single strategy can make it happen. You can improve your score in as little as three months by applying several strategies together. But there is a condition – your credit score should not have any serious black marks like foreclosure or bankruptcy.

Follow these tips to improve your credit score quickly.

Check Your Credit Reports

The first step is to figure out where you stand right now. Though you are entitled to get a free credit report once a year, it’s worth shelling out a few bucks to see your credit scores. Spend some money to get your TransUnion and Equifax scores at Experian has stopped selling its FICO score to retail consumers, but it still sells your scores to banks and lenders.

Check them for errors, make sure the data are accurate. Many a times people notice incorrectly listed late payments. If you find any mistakes, dispute them with the reporting agency and the credit bureau.

Pay Your Bills on Time

If you miss your monthly payments, that may hit your credit score in a big way. People who are unorganized need to set their bills up for automatic withdrawal from their bank accounts. Lenders immediately report delinquencies to the credit bureaus when you are 30 days past due, and the blemish remains on your credit reports for at least seven years.

Nowadays many banks have taken the responsibility to remind you through text message or email when your payments are due. In case you have already missed some payment in the past, catch up with them and never make that mistake again.

Pay Off The Credit Card Balances First

Revolving debts like credit cards have a greater effect on your credit score than installment loans such as mortgages. Paying off credit card debts ahead of the due date can add up to 100 points to your low credit score.

[blockQuote position=”right”]Paying off credit card debts ahead of the due date can add up to 100 points to your low credit score[/blockQuote]

Apply For A Small Installment Loan

Confused? Well, the reality is that you can improve your score at the fastest pace by letting the credit bureaus know that you are responsible with revolving as well as installment both types of debts. So, consider applying for a small installment loan if you don’t already have one. Just make sure that you can easily pay back that sum in future. And yes, make sure that the installment loan you raise is reported to all the three credit bureaus.

Don’t Cancel Unused Credit Cards

Your old credit cards have a long history, which slowly increases your credit score. When the credit score increases, you can get new credit cards with comparatively lower interest rates. That doesn’t mean you should stop using your old credit cards or cancel them.

Your newer credit cards will have a lower interest rate, but they also have a small credit history that lowers your score. When you stop using the older ones, the credit card issuers may either decide to close the account or stop reporting them to credit bureaus. In case they stop reporting, the account will still appear, but it won’t have as much weight on your score as your active accounts.

So, you need to dust off the older ones occasionally.

Never Ever Max Out Your Credit Cards

The best rule is to maintain the credit card balances below 30 percent of the credit limit. Try not to spend more than $3,000 on a $10,000 line. Whenever you need to spend more, simply take out other credit cards to reduce the loan on any single card.

If credit card issuers report a hefty balance on any of the cards, it will affect your score. It’s always good to have three credit cards with less than 30 percent in balances, than to have just one card that you max out every month.

Do The Loan Shopping Within a Limited Time

Too many credit inquiries (for a vehicle, home loan, etc.) often pull your credit score down. If you shop for loans within a limited time span, credit bureaus won’t treat it unfavorably. So do it within just two weeks period.

Put the above tips to work, and I’m damn sure your credit score will improve dramatically in just three months.

Did you ever have a bad credit score? What did you do to fix that?

Learn About The Identity Theft Protection Programs

Wednesday, November 14th, 2012

People have asked me time and again if there are any good identity theft protection programs, and I tell them again and again that there is none. Even FTC warns you that most of these identity protection programs offer services at a fee that you can do for yourself without spending a dime.

However, sometimes it’s worth to have some extra protection depending on what you want the program to do for you. But usually people buy into a program without even knowing what it does and doesn’t. That leads to confusing and unpleasant conversations with the company down the road.

Credit Monitoring

It’s extremely important because more than 50 percent of all the identity theft victims report a new line of credit in their name by identity thieves. And it takes longer to discover those accounts and clear them up.

A credit monitoring service informs you immediately if something appears on your credit report, such as a charged-off debt or a new line of credit. Expert say credit monitoring service is the best place to start if you really want to safeguard your identity.

But if somebody has stolen your Social Security Number and opened a new credit card using your SSN and a different name, you won’t be able to detect it. Not until your credit score begins to decline and lenders turn you down for a loan. That’s the way American credit bureaus are set up.

Reimbursement Program

A reimbursement program is usually attached to homeowner’s insurance. If you recall, your insurance agent must have used it as one of his selling points. They would have told you that the reimbursement program will protect your home as well as your identity. That’s not true.

It will only pay you back the amount you take out of your pocket when you fall prey to identity theft. That will be paid only in certain circumstances, and there are many strings attached. In case you use it, your premiums will shoot up. The money put on your credit card or stolen from the bank account will be considered “actual losses.” Reimbursement services never pay you for actual losses.

Identity Theft Resolution Program

This program has gained popularity in the past few years. If you fall a victim to identity theft, they give you personal assistance in fixing the problem and guide you through the process. Some companies assign you an agent while others operate like a call center – whoever is assigned to your problem will tell you what to do next. They all follow a step-by-step guide and standard script.

However, it doesn’t really do anything that you can’t do for yourself with some help of Google. If you are sure that you can deal with your problem, you need not spend your money on resolution programs.

Restoration Program

A restoration program is the best identity theft protection service your money can buy. It takes care of the ID theft problem for you, just like an insurance company takes care of your vehicles and house. Of course, a restoration program is relatively expensive and hard to find. A real restoration program will require you to sign a limited power of attorney so that they can work on your behalf.

[blockQuote position=”right”]A restoration program is the best identity theft protection service your money can buy[/blockQuote]

It’s better to ask them what they are going to do with the power of attorney you give them. Sometimes the companies say they are doing one thing, but they are doing something else. For example, some companies say they offer restoration program, but in reality, they simply walk you through what you should do next, just like a resolution program.

Legal Help

Identity theft usually leads you to legal troubles. Many states now have a special legal procedure to help ID theft victims recover. But most identity theft protection programs limit or exclude the access to legal help. You can contact your attorney for direction.

When considering a specific program, don’t hesitate to ask pointed questions. Ask them about what they do, how they do it, exclusions, etc. Do some research online.

Finally, the programs help you only if you already have them in place before you need them. Have you used any of these services? Were they really useful? I’d appreciate it if you share your experience with other readers.

The Common Man’s Guide To Identity Theft Prevention

Thursday, August 30th, 2012

Wondering why identity theft prevention is so important? Well, what will you do if your banker calls you to inform that the entire money from your savings account has been withdrawn? Or, what if somebody gets his hands on your Social Security Number, opens several financial accounts and obtains heavy loans under your name? These are examples of identity theft. If you don’t take precautionary measures, your personal information such as credit card number, SSN, bank ID and password may get into wrong hands; and criminals will commit fraud or felony at your expense.

Many a times, people don’t even know that they have fallen victims to identity theft until they are caught in trouble. So, it is important to know the tricks used by thieves to steal your identity and how you can avoid falling a victim. Every year, approximately 9 million people fall victims to ID theft, according to Federal Trade Commission.


7 Ways to Identity Theft Prevention


1. Beware of Shoulder Surfers

You go to the ATM, but don’t realize that someone right behind you is standing a little closer than they should be. You are completely unaware of it, but that person might be taking a photo of your debit card, or worse, recording a video when you enter the pin number. That’s shoulder surfing. Ensure that you have blocked others’ view with your body the next time you visit an ATM.

2. Don’t Give Your Password To Anybody

I am talking about social engineering tricks. Sometimes, a criminal calls you and gives false assurance that they are from the technical support, and they need your password to resolve an issue. They may also add that your password will not be shared with anybody.

When somebody talks like that on the phone, you feel glad to share your password with a stranger, thinking that you are helping a co-worker or the organization. Later you realize that the helpful gesture has landed you into a big trouble.

3. Keep a Watch on Important Documents

Many thieves still use the age old technique of stealing your wallet. There may be important documents such as driver’s license, SSN, insurance card, etc. Sometimes, they also attack your mailbox to get your personal information.

It’s good not to carry your Social Security Card in your wallet unless necessary. You should shred all the papers that carry your financial and personal information before dumping them. You think those documents have now become useless, others don’t. Another way is to keep track of your credit report.

4. Synthetic Identity Theft

Here goes the high tech heist. We are well aware that the first three digits of your SSN refer to your birthplace, the next two digits hint on your birthday, and thieves can guess the remaining four digits using statistical tools.

The criminals don’t specifically target your Social Security Number, but the trouble brews when the SSN they randomly decode unfortunately happens to be yours. Now they add a fake name to your SSN and make a new ID. This way, the criminals can borrow money from banks using your Social Security Number with a fake name. You may not be aware of all this while it’s happening.

The issue comes into limelight much later because debt collectors usually search a borrower using their SSN, instead of the name. They will approach you to get their money back that was borrowed using your SSN with a different name. The debt collectors may force you to pay the debt you are not responsible for.

You must be vigilant that your Social Security Number is not associated with any other name. So, try to occasionally check your credit score using your SSN instead of name.

5. Be Smart on the Web

Nowadays, hackers are using several tricks to obtain your personal information without leaving their comfort zone. Sometimes, the hackers put a “mirror” website that looks exactly like a merchant website. Then they send you an e-mail that seems to be from the original merchant website. The e-mail contains a link and it requests you to log in or place an order using the given link. If you do that, they get your credit card number, ID and password. So, you should always visit the original website by manually typing the web address.

Another tip, get a firewall if your computer doesn’t already have one.

6. Don’t Fall Prey to Telephone Scams

You get a telephone call, and your heart starts pounding when the caller congratulates you on winning a big fat sum of money. He further adds that you just need to make a small payment using your credit card as shipping fee. Don’t! You won’t have to pay anybody if you have really won a prize. Or, ask that person to deduct the shipping fee from your prize money and send the remaining sum to you. Well, the latter is just for fun.

Consider registering your phone number to the ‘National Do Not Call Registry‘ (1-888-382-1222).

7. Skimming

We don’t even care when handing over our debit/credit cards to the attendants at restaurants or shopping places. Are you sure that your card is in safe hands? The criminal-minded employees take an image of the card or memorize the card number. You then sign on the credit card receipt without even realizing that your credit card number and signature are already into someone else’s hands.

It’s better to give the credit card directly to the cashier when making payments. Many people own a disposable credit card with limited spending amounts. It is useful only until the limit is reached.

Hey, can you add some more tips to this list? What are YOU doing to prevent identity theft?