Jim Kemish asked:


Not a Friendly Service

In a recent blog entry I wrote, “Significant legislation has been enacted to protect you from the impact of the credit bureau’s inaccuracies. The right that you have to receive copies of your three credit reports for free on an annual basis is not a friendly public service by the credit bureaus. The bureaus have been required to provide this service as one of the protective measures included in the Fair and Accurate Credit Transactions Act. Your credit report can have a major impact on your financial life. Give your credit the attention that it deserves and review your reports regularly.”

A Reader Responds

A reader responded by asking, “I’ve read that the credit bureaus are regulated by the Federal Trade Commission. Doesn’t this indicate a relationship with the government?” Below is my reply along with some additional thoughts on the subject.

The Credit Bureaus are Not Government Agencies

I replied that, “The relationship between the credit bureaus and the government is the same as the relationship that you have with the government. Because your actions are conscripted by law does not in anyway suggest that you are necessarily a law abiding citizen (although I’m sure that you are!). As many people live in a constant adversarial relationship with the government, so do many large businesses. The credit bureaus happen to be constantly at odds with the law. Given the potential impact that credit reporting errors can have on your financial life, I strongly suggest that you modify your opinion of the bureaus enough to be very cautious of the content of your credit report.”

Strictly For Profit

One of the unfortunate underlying assumptions that people, like the above reader, have in their attitude towards the credit bureaus is that the bureaus have some form of official status. This could not be farther from the truth. They are strictly for profit businesses. Experian and Equifax are publicly traded companies and list their revenues in the billions of dollars. Trans Union is a privately held company with revenues estimated also in the billions. The three credit bureaus have maintained a consistently adversarial relationship with the government and consumers throughout their histories.

An Adversarial Relationship

An adversarial relationship with the public is not unusual for large businesses. All activities are chosen for the purpose of producing profits. The history of lawsuits brought against the bureaus over time paint a clear picture. The office of the Attorney General of Florida is currently pursuing action against Experian relating to misleading claims, deceptive advertising, a misleading domain name (freecreditreport.com), and failure to honor cancellations to their credit monitoring service offered through this so-called free credit report website.

A History of Conflict

The type of behavior described by the Office of the Attorney General of Florida is consistent with countless charges against the three bureaus. In the 1970s Equifax was charged with rewarding its employees for collecting negative information on consumers. This charge, which resulted in a consent decree, provides an interesting hint about the corporate culture.

Experian Gets an “F”

In 2006 a leading consumer advocate website rated the customer service offered by the three bureaus. The ratings were dismal including a grade of “F” given to Experian, who was sited for not even providing customers with a customer service telephone number. Credit repair is not on the priority list at the credit bureaus!

Nothing Has Changed

The above mentioned consumer advocate site has a current post that says, “With the 2003 amendments to the FCRA, and the introduction of the FACT Act, millions of consumers will see the quality of their credit reports degrade even further. FACT stands for Fair and Accurate Credit Transaction Act, but in reality it is just our government trying to appease millions of consumer who complain about the current credit reporting industry. But they are only appeasing us in name only…”

The Forces at Work

We have been assisting our customers with credit repair since 1989 and as such have dealt with the three bureaus on a consistent basis. There are two major forces at work that shape the behavior of the credit bureaus. The first major force is the need to maximize and protect profits which may result in decisions about operating policy that are not in the best interest of the public. The second force that conspires with the profit motive is the sheer bulk of data that the credit bureaus are trying to manage and maintain. The result has been widespread and serious errors on consumer reports combined with a horrible corporate bureaucratic resistance to fixing the problem. So check your credit reports regularly.

Copyright © 2007 James W. Kemish. All Content. All Rights Reserved.



Richard

William Brooks asked:


You may be extended the credit or loan, but at higher interest rates. There are ways to gain back the credit scores you deserve. The first thing you must do is to obtain all three of your credit reports as soon as possible.

Don’t try to get by with only one. You must get all three because each one can contain different data. When you get them, look them over completely with a fine-tooth comb.

Note any mistakes and report them to the bureau right away. Even the slightest mistake on your reports can cause you to have a lower score. Make sure all three reports have the same information as the others.

Discrepancies can also hurt your chances of receiving a good score from the credit monitoring agencies. Sometimes the credit card companies don’t report to all three bureaus, so check and be sure all three have the same facts and figures.

Take a look at the debt that is owed to your creditors. Negotiate with the companies over the debt and get the debt paid off if possible. If they report that the debt owed to them has been paid in full, your credit reports will reflect that positive action and your credit score will be raised.

If it’s not possible to pay them all off, then pay as much as you can on a regular basis. Make sure you’re paying all of your bills on time. Late payments, especially recent ones, get on your reports and are factored into your credit scores as a detriment.

Don’t apply for any more debt until you have all of your old debt paid off. The credit reports will reflect all of the debt that you owe, so the more debt that it shows, the lower your score will be until it’s paid off.

Pay off all your old debt first and make sure that they’re reported to the credit monitoring agencies. Even when you pay off your credit cards, keep the accounts open at least on some of them.

Closing all of the accounts reflects negatively on your score. Even if you don’t intend on using those accounts again, it still looks better that the account is open and there’s zero balance on it.

It also looks better if you charge very small amounts and then pay it off completely each month on time. It shows your ability to repay your debt. Don’t pay another company to take care of your credit repair unless you absolutely know that they come highly recommended.

It’s best you do it yourself. Most of the companies that claim they can repair your credit instantly are scams that will take your money and do nothing for your credit. Work hard to keep it clean and pay off all your bills on time. You can bring a negative score to a more positive one with a little diligence in budgeting for your bills and maintaining a timely schedule.



Jamie

Lara Sawyer asked:


There are many reasons why you should fear identity theft and credit fraud. We receive hundreds of consults each month for credit repair due to issues that have as underlying cause some type of identity theft or credit fraud. It is very important to be protected against these practices if you want to keep your credit sound and your credit score high. A simple credit fraud can destroy the efforts of years on building a clean and stainless credit history. Following are some tips that it is smart to follow if you want to remain on the upper side of the credit rank.

Protect Your Social Security Number

Your social security number is probably the most important identification you have. When forged or used illegally it can cause a lot of harm both to the legit owner and the federal administration or third parties. Thus, it is important to be cautious and avoid providing your social security number when there is no good reason for doing it. As a general rule, you should refrain from providing your social security number to companies that you did not contact you first and, for additional protection, you should run a background check on any company requesting your social security number.

Dispose of Documentation Properly

Any documentation used during applications such as credit reports pulled or filled loan applications need to be archived properly or destroyed if they are not going to be used anymore. This is a significant issue as unscrupulous people make use of this kind of documentation to obtain important personal information for engaging in identity theft. Mail is another source of information that could be used for this purpose and you should also destroy all mails that you do not need to keep. It is important to destroy the documentation or paperwork, shredding is the ideal procedure but in any case, you should dispose of it in such a way that the information cannot be retrieved anymore.

Take Note of All Your Personal And Financial Information and Keep It Safe

Chances are that you have plenty of accounts, store cards, credit cards, and such. If you do, you should take note of all account numbers, credit card numbers, store card IDs, CDs, stocks, bonds, and any other personal and financial information and keep this information printed in a safe place where you can retrieve it easily in case you need to contact the issuers for cancelling the accounts. In case of theft, it is important to cancel credit cards and account or debit cards immediately and have new ones issued to avoid further damages to your credit or finances.

Monitoring Credit And Purchases

Another thing you must do every month is to control your account, credit card and store card’s statements so you can notice immediately when an unidentified or unauthorized purchase was made. Moreover, it is a good idea to hire credit monitoring services to find out if any unauthorized use of your credit was made before it can cause troubles and leave a stain on your credit report



Darrell

Jim Kemish asked:


Getting Started

If you have lost your wallet you should take defensive action as soon as possible. Make a list of everything that was in your wallet; credit and debit cards, identification, insurance cards, movie rental cards, etc. The first order of business should be to contact all credit and debit card issuers, and inform them of your loss. They will deactivate your cards and discuss your options. Most credit card companies will provide a new card immediately to minimize your inconvenience. Once you have contacted everyone it’s time to consider additional precautions. If you need help, most credit repair professionals will be familiar with your choices and should be happy to provide guidance.

Fraud Alert

A fraud alert is a message on your credit report notifying potential creditors that your personal information may be used fraudulently, and requests them to contact you by phone prior to extending new credit. An initial fraud alert will remain in place for 90 days, and can be cancelled anytime. You may place a fraud alert on all three reports by calling just one of the three bureaus as they are required to contact the other two. You may also initiate your fraud alert online at the bureaus websites. Once the 90 day period is past, you may place an extended fraud alert on your report which will last for seven years, if you feel that your identity is still at risk.

Credit Freeze

A credit freeze is a more dramatic step you can take to insure that no new accounts are opened in your name. Once a credit freeze is active potential creditors will not be able to access your report. There are exceptions which allow a variety of pre-authorized parties to view your reports. This includes your current creditors who have the right to review your credit, collectors that work for current and past creditors, and companies that offer pre-screened credit. You may lift a credit freeze if you wish to apply for new credit. Unlike fraud alerts, which are available to anyone, credit freeze laws vary from state to state and may not be available in your state. In many cases there are fees associated with placing and lifting a credit freeze. Again, if you are uncertain, ask a credit repair professional for assistance.

Free Credit Report

Once you have placed initiated a fraud alert or credit freeze you may access each of your credit reports one time for free. In the case of an extended seven year fraud alert you may access your reports two times for free within the first year of placing the alert. Keep in mind that everyone has the right to access their reports one time per year for free at annualcreditreport.com. This is a federal law intended to facilitate the identification and repair of credit reporting errors. Instances related to the implementation of a fraud alert or credit freeze do not count against your right to your free annual reports.

Credit Monitoring

Credit monitoring is a fantastic high-tech tool which can add an extra layer of protection and comfort for anyone whose identity may have been compromised. It is also nice for anyone in a credit repair program wishing to track changes in their reports. Credit monitoring is offered by all three credit bureaus for a small monthly fee. At the time of this writing the cost is under fifteen dollars per month. Once enrolled, you will receive an email whenever there is a credit inquiry or any material change in your credit reports. You will also get unlimited access to your reports. Each bureau has an option that provides you with monitoring from all three bureaus simultaneously.

Social Security Card Replacement

If you have lost your Social Security Card you can get a replacement at no cost. You may get up to three replacement cards per year and up to ten in your lifetime. Just go to your local Social Security Administration office with personal identification and proof of citizenship, such as your birth certificate, certificate of naturalization, or passport, and you will receive a new card in approximately two weeks. You will also get a Social Security Number Certification letter on the spot which can be used in place of a card while you wait.

The Social Security Administration does not get involved in resolving identity theft issues, but if you inform the Social Security Administration that your Social Security number may have been used by another person, they will review your earnings to make sure no one else is using your identification for work purposes.

Copyright © 2007 James W. Kemish. All Content. All Rights Reserved.



Eugene

MIKE J asked:


I just bought True Credit, the Transunion product that monitors all three scores and credit reports. True Credit reported my scores lower than some of the other similar products available. Are these the scores that lenders see, or do they see the actual FICO score? How can I see what they see? I want to purchase a car from a local Chevy dealer and I want to know what to expect.

Randall

William Brooks asked:


Why is that? Here are some of the reasons why the scores can be so different between the three reports. First of all, check each report thoroughly to make sure all of the information is correct.

There may be something on one that isn’t correct, so that can affect your credit score with that particular monitoring agency. If one agency has incorrect information concerning your credit habits, then that credit report would differ from the others. Make sure you fix any incorrect information to get the correct score.

Another reason that the scores can differ between the three reports is that each agency has their own formula for coming up with their scores. Experian uses the standard FICO score, but adds a few of their own factors to it.

Equifax uses the standard FICO scoring model and TransUnion uses their own scoring system that they’ve developed for themselves. Another possibility is that your credit cards aren’t reporting to all three of the credit monitoring agencies.

If only one credit report receives information from your credit cards, then it would reflect a different score than the other two monitoring agency reports. Be sure to check and see if all of the reports have all the information needed to set your credit score correctly.



It’s also possible that some of the information that’s reported to the credit bureaus isn’t given to all three at the same time. One credit reporting agency may have received the information from a company, but the other two reports may not have gotten the information just yet. The credit scores would then differ greatly until the other two agencies receive the same information.

In order to protect your credit score and enable you to qualify for low interest loans, make sure each report has the same information, so that your score can be streamlined and you won’t get any shocking declines when it comes time to process your loan application.

It’s important to note that all three reports are not likely to have the same score as each other – even if all three have the same information. Since the different monitoring agencies use different factors and figures to come up with the score on your credit habits, it wouldn’t be feasible to waste your time trying to get the scores to come out exactly the same.

The most important thing to be concerned about is keeping your credit in good standing and make sure the information on each report is correct. If you’ve kept your credit positive, then the scores will reflect that and lenders who evaluate the reports will agree that you’ll be a good risk to lend the money to.



Sam

Anne Hammel asked:


The TransUnion settlement is being offered to an estimated 150 million consumers. Want to know if you’re one of them? Well, it’s a reasonably safe bet you are. You see, the settlement is being offered to anyone who had an open line of credit anytime from 1987 to May of 2008. Open lines of credit can include student loans, credit cars, auto loans, mortgages – pretty much anything you may have purchased on a credit account or line of credit. So you can see that’s just about anybody over the age of 18 from the last twenty years.

TransUnion is offering two options, and regardless of which you choose, you’ll have the tools you need to shift your financial destiny and become a more savvy and educated consumer, as well as work towards repairing your credit. The first option is six months of TransUnion’s credit monitoring service, free of charge. This will allow you unlimited access to your credit reports and scores, as well as email updates when something changes on your report. The second option gives consumers nine months of the credit monitoring service, as well as access to the scores used in insurance decisions and TransUnion’s mortgage simulator, helping consumers to see how their credit scores affect their mortgages.

Imagine that you’re looking for a house, and you find one that you absolutely fall in love with. It’s within your price range, let’s say $175,000. Your scores are okay – not great, but not lousy – and you get a rate of 6.5%, making your monthly payments on a 30-year mortgage somewhere around $1,100. Over next 30 years, you’ll end up paying close to $400,000 for your house when you include the $225,000 paid in interest. Now, what if you had great credit and got a rate of 5.5%, just 1% lower than the previous example? On a 30-year mortgage, your payments will be roughly $990, meaning you’ll end up paying a little more than $350,000 with only $175,000 of your total payment going towards interest.

Here’s where credit repair comes into play. The difference between the total you’ll pay in the first example and the total you’ll pay in the second is $50,000.

So the question is; would $50,000 change your financial future? The answer for most of us is a clear and resounding “Yes!”

All it takes is a little bit of patience, dedication, and persistence to repair your credit and make the changes in your financial habits that will translate into higher credit scores, and TransUnion has delivered an unprecedented tool for you to use to repair your credit. Using the TransUnion service, you can see the effect of every financial decision you make. Opening a Home Depot card to save 10% on that purchase will have an effect on your credit score. So will paying off that Visa card, or closing it altogether. Which decisions will support you in repairing your credit and becoming financially free? Now you can know immediately the weight and effect of any decision you make, and it’s free!



Kristen

Mike Clover asked:


Identity theft is at an all time high as a result of the digital age of paperless transactions and online databases. Why would anyone want to steal someone’s identity? Some people think it is just for the purpose of starting fresh or getting away from their previous life, but the vast majority of identity thieves do it for money. If they have your personal identity information they can also retrieve your banking information, credit card numbers, and more. Those who are using other identities are usually using many identities for the purpose of stealing money from all of them, perhaps by withdrawing funds from their bank or setting up a credit card in their name. The scary thing about identity theft is that the violators have little care that they may be taking everything another individual owns as well as destroying their credit for a number of years. If a victim is unable to detect identity theft for over six months, it can do severe financial damage. You can of course investigate your own credit reports and accounts regularly, or you can pay for a credit monitoring service to investigate for you.

One of the greatest advantages to using a credit monitoring program is the convenience. Instead of living life, constantly paranoid of identity theft, credit monitors can do the worrying for you. Odds are, a monitoring program will also investigate more thoroughly than the average citizen. Monitoring services commonly monitor new account activity, address changes, collection accounts, changes to account information, credit limit increases, credit inquiries, changes in public records, changes in current accounts, and recently closed or flagged accounts. Yes, all of these things can be equally investigated by an eager individual, but routinely checking all of these cues for identity theft can be tedious and unpleasant. Regardless, it is important to check all or more of these areas to keep a close watch on the possibility of identity theft. Early detection is the key to monitoring your credit before the financial loss has become too great, and with an online identity theft monitoring service, you can just go on living life without the burden of becoming a part time investigator.

When considering a monitoring service, you should first consider where that provider receives information. It is most desirable for an identity theft service to obtain information from the three major credit agencies. How often the service monitors your information is also relevant. The frequency of your credit monitoring will increase your chances of early detection. Various services and programs also vary in how often they release reports and give updates, and some provide actual identity theft insurance in the event that they make a mistake and overlook a thief.

There are a host of things to take into account when deciding how to keep a close eye on your credit information. Identity theft is a very real problem that no one believes will really happen, but the reality is that it happens every day. If you choose not to use an online identity theft service or other credit monitoring program get organized so that you can closely monitor the activities associated with your identity. It will save you so many problems in the future.



Robin

Mordecai Zion asked:


I have had it happen several times. I guess I don’t care but it convinces me Y politics and elections are carefully monitored by the media big dogs. Guess they have a huge time gap to fill each day.

Stephanie