Placing Fraud Alerts On Your Credit Report: When and How To Do It

Fraud Alert Credit Report

Identity theft has become increasingly common – but so have preventive measures. Although there are various methods to choose from, one of the most effective ways to go about protecting yourself is to take advantage of a fraud alert. Fraud alerts are messages you can add to your credit report from each major credit bureau (Equifax, Experian and TransUnion) indicating that you believe you may be a potential victim of identity theft. Therefore, when people (such as potential creditors, renters or anyone who needs to pull your credit) view your credit report, they will be notified that further steps are needed to verify your identity. These extra steps significantly mitigate the chances of someone else establishing new lines of credit in your name without your consent.

  1. Types of Fraud Alerts
  2. How To Set Up Fraud Alerts
  3. Pros and Cons: Should You Use Fraud Alerts?
  4. Alternatives To Fraud Alerts

Credit Card Reconsideration: How and When To Request It

Credit Card Reconsideration

No one enjoys rejection – especially from banks. It’s pretty frustrating to be informed that you are not eligible for the credit card you’ve been waiting for. The reasons are endless; they tell you it’s because of your recent delinquency, or maybe, it’s because you have too many active accounts open. Regardless, it is important to know that you can get your credit card application reassessed and it is often worth a shot – after all, you have nothing to lose. Doing so is often known as a credit card reconsideration, meaning that you reengage with the same issuer to politely negotiate your way to an approval.

Generally, your initial rejection is issued to you by a computer with an algorithm that is designed to turn down people with select types of credit histories. However, note that issuers are required to reconsider your applications upon request. Under regulation 1002.6 in the ‘Equal Credit Opportunity Act’, it states that creditors shall consider “any information the applicant may present that tends to indicate the credit history being considered by the creditor does not accurately reflect the applicant’s creditworthiness”. Therefore, you can get in touch with an actual human representative to reposition your case by providing more information. They tend to have more empathy and understanding than the computers regarding your application – if you maneuver the process correctly, that is. Thus, if you were rejected the first time, you might have a better shot the second time by requesting a reconsideration.

Credit Freeze: When & How to Do It

Credit Freeze

Although identity theft only happens to a fraction of us, the repercussions can be extremely severe and tedious to resolve. Thus, it is recommended that you consider preventive methods whenever possible. One such preventive measure is called a credit freeze. Freezing your credit – also known as “locking”, “sealing” or “securing” your credit – essentially means that you preclude your credit reports from being accessed by most third parties.

A credit freeze prevents fraudsters from using your personally identifying information to open financial accounts or make transactions that require a credit check under your name. In other words, it nips certain types of financial fraud in the bud, enabling you to avoid the monetary loss and potential credit score damage that often accompanies them. Below you can learn more about how a credit freeze works, how much it costs, and alternative measures for protecting your financial life.

What is a Good Credit Score?

 What Is A Good Credit Score

The FICO credit score is what most banks and lenders use, and anything in the 660-720 range is considered a good credit score under the FICO model (the higher the better).

However, there are more than 1,000 different types of credit scores, and they often utilize different score ranges. So, what’s a good credit score under one model might not be considered good under another. For example, 700 would denote good credit if it’s from FICO but would be below the good credit score range of the Vantage scale. The chart below shows the breakdown for the two most popular credit scores.

Credit Monitoring: What It Is, What to Watch Out For & How to Use It

Credit Monitoring

Most people use credit monitoring to get notified about fraud as quickly as possible and, ultimately, minimize its impact on their finances.  It entails signing up for a service that keeps tabs on one or more of your major credit reports and then notifies you whenever a new account gets opened under your name, someone makes an inquiry into your file, or other potentially suspicious activity crops up.  Many credit monitoring packages also provide you with access to at least one of your credit reports and credit scores.  As such, consumers often use credit monitoring simply to keep track of their credit building progress.

A variety of different companies offer credit monitoring services, including the three major credit bureaus (Experian, Equifax, and TransUnion) and most of the major banks.  It’s no surprise that there’s a large market for such a product either, as identity theft has topped the Federal Trade Commission’s annual list of the most common consumer complaints for more than a decade.  And while credit monitoring won’t, strictly speaking, prevent identity theft or related credit card/loan fraud, it does have the potential to alert you about unauthorized access to your personal information before you would otherwise notice a problem.

Identity Theft: What It Is, How It Happens & the Best Protection

Identity Theft

Identity theft occurs when someone gains unauthorized access to your personally identifying information – such as your name, Social Security Number (SSN), or bank account information – and uses it to commit fraud or other crimes.

The crimes that an identity thief is able to commit with your personal information range from applying for a credit card under your name before subsequently racking up prodigious charges to poaching your tax refund.  In some cases, identity thieves are even able to assume an unsuspecting person’s identity entirely, obtaining identification bearing their name and often committing crimes “as that person.”

CardHub’s 2014 Credit Predictions

2014 Credit PredictionsThe holiday season tends to be a time for nostalgia and reflection.  But as the calendar turns from 2013 to 2014, we will undoubtedly begin looking to the future, making resolutions and pondering the potential for new beginnings that always accompanies a New Year.  But why wait to see what 2014 has in store?  Foresight is important in finance, so let’s make some predictions for what awaits our wallets in 2014.

Armed with an ability to see into the future, most consumers, analysts and even politicians would all be interested in many of the same things.  For example, will the federal government ultimately default on its debt and send consumer interest rates soaring?  Will the economy continue its painstaking recovery from the Great Recession or tank once again?  Can we expect lucrative rewards and 0% financing offers to stay on the table?

How to Fix Credit Report Errors

 Fix Credit Report Errors

The importance of your Experian, Equifax, and TransUnion credit reports cannot be understated, as all credit scores are based on the information in these reports and your credit standing dictates the credit card and loan terms that you qualify for, where you are able to live, the car you drive, and even the jobs you can get. But while certain types of information should be included in your credit reports, errors are not among them.

Credit report errors are unfortunately an all too common fact of life, however. The Federal Trade Commission estimates that roughly 1 in 5 people (or about 42 million Americans) have an inaccurate credit report, and other studies indicate that the prevalence of credit report mistakes is even higher. For example, the non-profit group American Consumer Credit Counseling pegs the error rate at an astounding 90%.

Bad Credit Guide

 Bad Credit Guide

There are various quantitative and qualitative ways to determine if you have bad credit—the easiest and most definitive of which is if you have a FICO score of less than 620. According to a recent study by FICO, the leading credit score provider, at least 43.4 million people could be classified as having “bad” credit following this recession. Realizing that you are not alone in having bad credit (though it may feel like it) is the first step, but you must also acknowledge that there are no quick fixes to this situation. Credit can only be improved through consistent responsible activity, so be wary of offers that promise miracles.

A history of bad credit can make a consumer feel as if he or she is drowning. Like a swimmer who sinks beneath the ocean’s surface and makes strong, consistent strokes to bring his or her head above water, a consumer needs to consistently add positive information to a credit report in order to mitigate past negatives and improve his or her credit score.

How long does negative information stay on your credit report?

 Negative Information Credit Report

We all know that credit report information reflecting late payments, delinquent or defaulted accounts, and other unfulfilled financial obligations can have a very detrimental effect on your overall credit standing as well as your wallet by extension. Fortunately, there are limits on the length of time such negative information can remain on your files with the major credit bureaus.

But what are these limits? And what can you do if you believe that negative information has overstayed its welcome on your credit reports?

Will a Lower Credit Limit Hurt Your Credit Score?

 Lower Credit Card Limit

A credit card company can lower your account’s spending limit at any time, and it won’t have to provide notification unless the change will bring your credit line below your existing balance, thereby triggering penalties.  But, for most consumers, the potential credit score implications of a credit limit decrease are far more troublesome than decreased spending power.

A lower credit limit can indeed affect your credit score, but the real question is how?

Will a Credit Card with Zero Balance Hurt My Credit Score?

 Zero Balance

The short answer to that question is no.  In fact, maintaining a credit card account with no balance (i.e. never using it to make purchases) can actually be a smart strategy because it enables you to take advantage of the credit building capabilities of credit cards without running the risk of incurring unsustainable debt.

You can even go as far as locking your card in a drawer or simply cutting it up, as long as your account has zero balance when you do so.

Does Debt Settlement Hurt Your Credit?

Does Credit Card Debt Settlement Hurt Your Credit

It’s no secret that significant amounts of credit card debt can be extremely difficult, costly, and stressful to deal with. The question of what to do when you can’t pay amounts owed is something that a lot of folks have had to deal with in recent years, as the Great Recession and our own risky spending habits have wreaked havoc on our finances. Many people therefore want to know whether or not finding a way to settle their debts with a bank or debt collector is a good idea.

In other words, is debt settlement a viable option? Can it save you money? And, perhaps most importantly, how does it affect your credit standing?

What’s Included in Your Credit Report & When Does It Get Updated?

 Included In Credit Report

The information that is contained in your credit reports can be categorized into 4-5 groups: 1) Personal Information; 2) Credit History; 3) Credit Inquiries; 4) Public Records; and, sometimes, 5) a Personal Statement.

These sections are explained in further detail below.  We will also discuss the Credit Reporting Timeline (i.e. when information gets added or updated) as well as show you what each section looks like in your TransUnion credit report.  Hopefully this will enable you to confidently navigate your way through the data and ultimately make the best possible decisions for your credit standing.

How to Improve Your Credit Score (and How Long It Will Take)

 Improve Your Credit Score

There are a number of ways to improve your credit score – from paying down debts to maintaining a low credit utilization ratio.  In order to fully understand what influences your credit standing, causing it to rise (or fall) over time, you must first understand what a credit score is at its core as well as how it’s fueled by the information in your major credit reports.

In short, credit scores are numerical indicators of financial responsibility.  Based on your past spending and payment habits when using loans or lines of credit (i.e. the data tracked by major credit bureaus), a credit score – together with your disposable income – will tell a financial institution what (if any) offers to extend your way.  Landlords, car dealers, and employers even use credit data to gauge the trustworthiness of applicants as well.

Credit Reporting Agencies

Credit Reporting Agencies

While there are nearly 40 credit reporting agencies in the United States, the industry is dominated by just three large companies:  Experian, Equifax, and TransUnion.

Credit reporting agencies track financial account management information about consumers and businesses and sell this information to lenders and credit scoring companies.  Employers, car dealers, property management companies, and a variety of other decision makers across seemingly all walks of life also use credit data to evaluate applicants.

FICA Score

 FICA FICO Credit Score

It’s important to note right off the bat that there is no such thing as a FICA Score.  There is, however, a FICO Score.

The FICO Score is the most widely used type of credit score and is named after the company that offers it:  the Fair Isaac Corporation.  FICA, on the other hand, is an acronym for the Federal Insurance Contributions Act, which imposes a payroll, or “employment,” tax on both employees and employers in order to fund Social Security and Medicare.  This tax doesn’t have any type of score associated with it.

Will a Denied Credit Card Application Affect My Credit Score?

My Application Was Declined What Will This Have Done To My Credit

Yes, a credit card application that an issuer turns down will affect your credit score. However, the impact will be no different than what would result if your application gets approved, with the sole exception being that your credit won’t be further affected by a new trade line also appearing on your major credit reports.

You see, each time that you apply for a credit card, the respective credit card company will check out your credit history in order to make an informed decision about whether or not you can manage an additional line of credit as well as what card terms your previous financial performance warrants. This is what’s known as a hard inquiry. Credit card inquiries are listed individually on your Experian, Equifax, and TransUnion credit reports and will remain there for two years.

Will Not Using a Credit Card Affect My Credit Score?

If I Have A Credit Card That I Do Not Use How Does This Reflect On My Credit Report

Despite the convenience and other perks that credit cards offer, many people choose to rely on cash because it’s more tangible and does not enable you to rack up a bunch of debt if you aren’t careful. However, cash payments obviously aren’t reported to the major credit bureaus and therefore don’t help you improve your credit standing. But does exclusively using cash actually hurt your credit score?

It’s certainly fair to wonder if only using cash leads to bad credit, as your credit score includes information about your payment history on credit accounts, the types of credit you use, the accounts you’ve opened in the past year, etc. Without those things, what are you left with?

How to Check Your Credit Score

Check Credit Score

There are a number of ways to check your credit score. There are also a number of different credit scores that you can check.

That’s right; no one has just a single credit score. There are literally more than 1,000 different credit scoring models out there, and the fact that major banks typically modify the ones they use with their own proprietary algorithms expands the options exponentially.

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Our content is intended for general educational purposes and should not be relied upon as the sole basis for managing your finances. Furthermore, the materials on this website do not constitute legal advice and should not be relied upon as such. If you have any legal questions, please consult an attorney. Please let us know if you have any questions or suggestions.