Would You Like to Remove ChargeOffs, Judgements, or Other Bad Credit
From Your Credit Report?

Would You Like to Raise Your Credit Score 50, 100 or 200 Points?

Would You Like to Experience the Feeling of Instant Approval for a Car, Credit Card or a Home?

The Law is on Your Side

Many consumers have the mistaken idea that credit bureaus are federally supported organizations backed by a vast array of laws meant to protect creditors. Nothing could be further from the truth. Aside from the government simply recognizing the need for credit reporting, credit bureaus have absolutely nothing to do with the government. Credit bureaus are simply huge bureaucratic companies which exist for the soul purpose of making money by selling information about you-information they never bothered to verify.

Because of the vast potential for error in the credit reporting system, the United States Congress has enacted laws to protect the consumer from being victimized by the credit bureaus. It is your right and responsibility to make use of these laws.

The Law versus Practical Reality

As the credit bureaus computerized their processes and greatly expanded their reach and influence in the late 1960s and early 1970s, consumer complaints began to mount at the FTC and state attorney general offices. The credit reporting agencies quickly became huge bureaucracies second only in size to the federal government. The credit bureaus expressly served only the needs of their clients, the credit grantors. Many consumers were negatively affected by the credit bureaus, but they had no way to correct or change their credit information.

The American consumer lay completely at the mercy of the credit bureaus. The United States Congress enacted the Fair Credit Reporting Act (FCRA) in 1971 to insure that the credit bureaus investigate the credit items disputed by consumers. This federal law set procedural guidelines, which gave the consumer the right to challenge the accuracy, validity, and verifiability of the credit listings appearing in their consumer credit report. It also required that the credit bureau delete any credit listing if it was inaccurate or could not be verified. Learn More.

In theory, the FCRA charges the credit bureaus with responsibility to the consumer as well as the credit grantor. In reality, the credit bureaus resist, resent, and reject consumer disputes. The credit bureaus would rather be left alone to make a profit. And, each time a consumer challenges his credit, profit is lost.

The credit bureaus first defend their profits by erecting walls of stall tactics, including requests for more information, further clarification, and additional identification. The vast majority of consumers give up before they even receive copies of their credit reports. If a consumer manages to get a credit report, decipher the codified information, write a coherent dispute, and mail it, the bureaus may still find some reason to disregard the challenge. The entire dispute system is designed to frustrate and discourage the consumer.

Many consumers have the idea that the credit bureaus must complete their investigation within thirty days or be forced to remove all disputed information. They threaten to sue the credit bureaus if they don’t conclude their investigation in time. In practice, such thinking is delusional. Nobody forces the credit bureaus to do anything. However, if you manage to submit a valid dispute letter, and the credit bureau investigates your dispute, the chances of success are good.

If a credit bureau cannot verify an item before completing its investigation, that item will be removed. Many creditor grantors are simply reluctant to take the time to verify the data. While the credit bureaus are in the business of reporting credit histories, creditor grantors are not. Click Here.

I have created this blog/website as a resource for those people who are dealing with credit reports and credit scores that are less than ideal.

In 1995, I left the convent (yes, I was a nun) after living life there for 7 years. I left to begin graduate school and was relatively poor with very little money to live on. Coincidently, I was able to secure a couple of brand new credit cards. I thought I had it made! They spent like money, so I was happy to use them to buy everything from groceries to gas to new clothing. Did I have the money to pay them off each month? No way!

It wasn’t long before I was living off of credit cards instead of some kind of financial aid. I received no counseling on the matter and had no credit education or savvy. Over the course of my 2 years of graduate studies, I accrued almost $30,000 worth of debt! I went from owning nothing to owing creditors more money than I could even imagine. I was left with a credit score (and BIG mistake) that I would never wish on anyone. I learned my lessons the hard way.

Had I known about Lexington Law Firm 6 years before, I think that I could have gotten a better grasp on my situation and many of the negative credit outcomes I was experiencing at that time in my life. Had I been better educated, I could have worked through a credit repair process and started over on a better foot after graduation. Nowadays, I am a homeowner who sleeps well at night. As you can imagine, it was not always that way. I hope the resources here can spare you some of the lost sleep and anxiety I experienced.

I am sharing this info in case you are one of those people that can’t seem to “get a break” regarding your credit history and score. Please read through various sections on the site and take advantage of the free annual credit report offered by annualcreditreport.com (the ONLY official site endorsed by the FTC.gov).

Your future starts now.

What does your score mean?

This rating system is meant to develop a snapshot of the risk you currently represent to a lender. Several parameters in your credit file, including length of credit history, number of open accounts, loans, mortgages, public records, and others are formulated to produce a three-digit score between about 300 and 900. There are other scores used by lenders and insurance companies (some of which are developed by FICO) such as Application and Behavior scores. These other scores take other information into account. Usually a lender will use a combination of your credit score with other factors when determining your risk. They all have the same objective, to determine the borrower’s potential risk. Regardless of whether the score was generated by FICO or a system based on FICO parameters, they all yield an industry standard three-digit score. This score places the borrower in one of three main categories (we named the third one ourselves.)

Prime, sub-prime, and shafted

Prime: If your credit score is above 680, you are considered a “prime borrower” and will have no problem getting a good interest rate on your home loan, car loan, or credit card.

Sub-Prime: If your credit score is below 680, you are “sub prime”, and will likely pay a much higher interest rate on your loan.

Shafted: Below 560 is the shafted score. At least that is how most lenders and credit issuers perceive it. You can still get a credit card but you will likely be hit with a security deposit or high acquisition fee. In addition to that your interest rate will likely be 22 to 23%. You can forget about most home loans and the majority of new car loans at this score. Below 560 is no place to be. You will pay much, much more in higher interest and unnecessary fees. You may even pay more for your insurance rates. A very low score can even prevent you from getting a job with many companies. If your in this catagory Click Here.

How are credit scores calculated?

The methods of calculating your FICO may differ slightly depending on the credit bureau. When obtaining your score from one of the Credit Bureaus it is important to understand that your score does not come directly from FICO. It is adapted to each bureau and is given its own name: Equifax uses “Beacon”, Trans Union uses “Empirica”, and Experian uses “Experian/Fair Isaac.” These scores are also referred to as your “Bureau Scores.”

Since your score is derived from your bureau data, it will change every time your reports change. However your score is calculated, it will always take into consideration many categories of information. No one piece of information or factor determines your score. As the information in your credit report changes, the importance of one or several factors may change in your FICO score. Lenders look at many things when making a credit decision, including your income and the kind of credit you are applying for. However, your FICO score does not reflect these facts as it only evaluates the information retained by the credit reporting agency.

To Learn More Click Here.

What factors affect your credit score?

There are five factors which are used in credit scoring calculations that determine your overall credit score.

1. Previous Credit Performance (Payment History) 35% A lender wants to know what your payment history is like. Have you paid everything on time, are you late on anything now, and so on. Your payment history is just one piece of information used in calculating your score, although it can be the very important.
2. Current Level of Indebtedness (Amount Owed) 30% How much is too much? Can the borrower pay me and still afford to pay his other bills? Not necessarily. Having available credit can actually help your ratio of debt to available credit. These are the types of questions that most borrowers want to know and the answers are almost as important as your previous credit history.
3. Amount of Time Credit Has Been In Use (Length of Credit) 15% Generally speaking, the longer the credit history the better your score. However, this factor only makes up 15% of your total score so even young people, students or others with short histories can still score high overall as long as the other factors show good. If you are new to credit than there is little you can do to improve this part of your score. Open an account and be patient.
4. Pursuit of New Credit (10%) Credit is much more popular today. Just look at the number of credit card offers you get via the Internet and in the mail. Consumers can now shop for credit and find the best terms to meet their needs. Each time someone runs a credit check on you, it creates an inquiry.Fair Isaac has changed some of its calculations to account for these new trends. Specifically, they treat a group of inquiries - which probably represents a search for the best rate on a single loan - as though it was a single inquiry (note: this only applies to auto or mortgage loan inquiries.) For example, auto loan inquires that are within 14 days of each other only count as one inquiry.
5. Types of Credit Experience (10%) A healthy mix of different types of credit, installment loans, retail accounts, credit cards, and mortgage. This score is not normally a key factor in determining your score but it can help a close score. Its not a good idea to try and open different types of accounts just to try and make this factor better. It will likely reduce your score in other areas. You should never open accounts you don’t intend to use anyway.What type of accounts you have, and how many, can make a big difference. The optimal ratio of installment versus revolving accounts depends on your profile and differs from person to person. One factor that seems to have significant influence is your percent of open installment loans. Too many can lower this portion of your score. For more information Click Here.

Improving your credit score

Now that you know how your score is calculated, you can begin making changes to your current financial planning. The best things you can do are simple.

• Pay your bills on time. Sounds simple, but this is the biggest thing you can do to keep your score high. Delinquent payments and collections have a major negative impact on a score.
• Keep your balances low on unsecured revolving debt like credit cards. High outstanding balances can affect a score.
• The amount of your unused credit is an important factor in calculating your score. You should only apply for credit that you need.
• Make sure the information in your credit report is correct. If its not, dispute it with the credit agencies and/or with the creditor directly.
• Removing negative items on your credit reports has the biggest impact on your FICO score. Generally, negative items stay on your reports for seven years but you can hire a professional credit report repair service such as Lexington Law Firm to do it for you.
• You can try to understand the laws yourself, but we have found it’s so much easier to have someone do it for you. We strongly recommend using Lexington Law Firm, they are the industry leaders.

Can credit repair companies be trusted?

Many “credit repair” companies claim to remove negative credit with the flick of a wrist. Their advertisements make bold assertions and money-back guarantees: “Bankruptcy, tax liens, judgments… no problem!! One hundred percent guaranteed!! Credit report 100% cleared in 30 days!!” Can they really make such sweeping guarantees?

While some credit repair companies are outright frauds, others are not fraudulent and they use the dispute process to obtain impressive results. In fact, they delete thousands of negative credit listings every day. There is a company called, Lexington Law who has been doing it for 15 years. Click Here to learn more.

Unfortunately, it is risky to trust anyone to help you restore your credit. It is estimated that fraudulent credit repair companies have bilked Americans out of more than fifty million dollars. The majority of credit repair companies were started by entrepreneurs with a penchant for marketing. Consumers have flocked to these “credit doctors” only to discover that their advertisements proved far more impressive than their results. Hiring a credit repair company is like playing Russian roulette. Many of them are effective and legitimate, but it is difficult to tell a rip-off from the real article.

So, can credit repair companies guarantee results?

Not a chance! No credit repair company is so good that it can guarantee a specific outcome. It would be like a defense lawyer guaranteeing that the jury will find his client innocent. Guarantees are a sure sign of credit repair fraud. A warranty, where the credit repair company promises a refund if certain results don’t occur, is a better, more realistic claim. Lexington Law is a respectable company that we recommend.

Not surprisingly, the credit bureaus have declared war against the credit repair companies and those selling instruction on how to do-it-yourself. The bureaus lambaste credit repair companies in the media and send anti-credit repair literature to anyone whom they suspect of using credit repair services. The bureaus unflinchingly deny that accurate information can be removed from a credit report.

The simple truth is that you do not have to endure bad credit for seven to ten years as long as you feel comfortable challenging the accuracy or verifiability of your credit listings. If so, it is possible to restore creditworthiness within a much shorter time.

However you decide to address your credit challenges, realize that regardless of what you may hear in the news media, thousands before you have sought help and restored their credit. They can show you their homes, cars, and credit cards. Despite the newspaper articles, TV reports, and other credit bureau propaganda to the contrary, the simple truth remains: you can restore your credit. Learn More.

Below are some hot and juicy tips that will help you work towards raising your credit score. Implement two, twenty, or all of them and watch your score rise like the mercury on a hot summer day.

1. Use your 3 free credit report checks Order your reports and check them for any errors that could be spoiling your score. Look for late payments, delinquencies and misspellings that may mean someone else’s report is mixed up with yours.

2. Dispute every report error. Protest to the credit bureau that is reporting the error. Send the bureau copies of your evidence that the information is wrong

3. Don’t open any new credit accounts to keep your credit inquiries at zero.

4. Do not close any accounts even if you no longer use them (your combined credit limits can help minimize your credit utilization ratio).

5. Pay every bill on time, every time. This is the biggest thing you can do to instantly begin transforming your credit score. You’ll see a lift within 6 months.

6. Add a consumer statement to your credit report to offset any big negatives like bankruptcies or liens. The statement gives your side of the story. Contact customer service at the credit bureau for assistance. A lender may read it and decide to take a chance on you, which offsets a lower score.

7. Reconfigure your credit utilization ratio. This measures how much of your available credit you are using. Pay down your debt to get it below 30% of your total credit limits (all cards combined) and your score will rise. Don’t ever go over that threshold of debt or your score will plummet.

8. Ask for Rapid Rescoring from your lender. This new process allows a new credit score to be generated within a few days after you complete some credit-improving task such as reducing your debt.

9. Only use your lowest interest rate credit card. Put the others away while you pay them off. Every bit of interest reduced helps when you’re trying to turn your credit around.

10. Do not get arrested, or sued. Both can show up on your report.

11. Watch your mail. Pursue a bill you’re expecting if it doesn’t arrive as scheduled. If you don’t, you’ll be penalized by a late payment notation even if the bill never arrives.

12. Have negative items removed ahead of schedule. Request that bankruptcies, tax liens, foreclosures etc., be removed early. 7 years is the maximum time they may be reported. There is no MINIMUM time they must remain, so consider working with Lexington Law Firm to assist you in getting the negative items removed in a timely way.

13. Ask your creditor to remove negative information. Once you are in good standing with a creditor, request that an old item (for example, a late payment) be removed and no longer reported. Ask for this as a goodwill measure.

14. Start a budget to carve out an out-of-debt fund. Cut costs and use the difference to pay toward debt. The lower the debt, the higher the score.

15. Don’t foolishly endanger your identity by carrying every credit card you own. Carry only your primary card. Leave your social security card and other non-essential documents at home. Identity theft can take months to sort through and your score could be devastated.

16. Don’t ever close your oldest accounts - these give your credit history its timeline and the longer, the better.

17. Have a good mix of credit. This includes retail store charges, car loans, credit cards, gas cards, mortgages.

18. Have someone co-sign for a credit card. Ask a close friend or family member with good credit to add you to their account as a signer. This is known as “piggybacking” and allows you to leverage the good history as your own.

19. Don’t ever max out a credit card by combining all your debt on it if it puts you near your limit. Instead, spread a large debt over two or more low interest cards.

20. Call creditors to ask for a lower interest rate. Many will give it to you. If you don’t ask, they won’t offer.

21. Work out a payment plan with creditors if you’re struggling. This will prevent your account from being turned over to collection agencies - the kiss of death to your credit score.

22. Ask a family member for a loan to pay off debt; their terms will likely be far more agreeable. Reducing debt is key to score.

23. Increase your credit limits. This will help your credit utilization ratio. When your limits are increased, your existing debt represents a lesser percentage of your total available credit (the goal is to bring it under 30%). But do NOT increase your balances.

24. Pay bills immediately as they arrive. If you send the money out before the next statement is generated, your creditor will report your paid balance ($0) versus your statement balance (what you owed).

25. Use old cards occasionally. Your oldest accounts count toward your credit history length but may not be factored in if you don’t use them every 6 months or so. Periodically take them out for a drive.

26. Don’t neglect other bills. Don’t assume you only have to pay certain credit cards and loans on time. A clause called Universal Default allows some creditors to increase your interest rate as high as 30% if you are late paying any of your cards.

27. Avoid secured cards. Though they’re usually pitched as a way to establish credit, often they’re viewed as the card of last resort for people who can’t handle credit. There’s dispute as to whether a secured card history is assessed differently when computing your score. Some say yes, others say no. Try for a retail store charge or gas card instead, which are usually easiest to get.

28. Bring delinquent accounts up to date. Though it could take you months, as soon as you “square” one account, it will begin to shed its negative stigma in 6 months or so.

29. Prune your cards. More cards are NOT better. 10 or 15 are way too many. Too much credit limit worries lenders, who fear you may get in over your head. Slowly begin closing excess accounts over time but never your oldest accounts – keep those open. The process should occur over a year or two.

30. Try your bank for a credit card. If you can’t get a major credit card, go to the bank where you hold your checking accounts. They may give you a bank card with a small limit. Treat it well and your score will improve.

31. Apply for a loan. The best way to build credit score is to handle credit responsibly. Lenders especially love loan histories. Apply for a mortgage or small car loan and pay it on time every month.

32. Talk to a live person. Your creditors often have real operators to talk to; they’re a good place to start in a dispute over a reporting error. If you don’t get any action, contact the credit bureau to dispute negative items.

33. Automate your payments. Do not leave bill paying to chance. Have payments auto-deducted from your account. Make sure you have overdraft protection.

34. Cut deals. When you pay a creditor, ask them to remove a negative notice about you at the same time. Many are happy to do this.

35. Always be polite rather than aggressive when dealing with creditors and credit bureau personnel. Remember that they are people with the power to grant your requests. You can always threaten legal action later.

36. Keep a small balance on your cards; it may be better than carrying a $0 balance. It shows you can handle credit wisely.

37. Check into credit monitoring. When you need regular access to your scores while rebuilding, try a service that provides scores 24/7. It costs from $9 - $29 a month and can be worth it for the constant feedback.

38. Use the snowball method to retire debt – this classic principle really works. Free up all cash you can to make large payments toward 1 card while making minimum payments on your others. As each card is paid off, roll over the payments to the next-highest balance.

39. Do whatever you can to avoid bankruptcy. This is truly the kiss of death to your score. Credit counseling does not affect your credit score (this has recently been confirmed by the bureaus) so it’s to your advantage to try that first.

40. Get scores totally free. Whenever you apply for a loan like a mortgage or car, ask for your score. Many lenders will tell you, especially if you’re denied.

41. Order your credit scores once a year. Benchmark your score every year so you can measure improvement.

When there are items on your credit report that you just can’t find your way through — consider working with Lexington Law Firm so that they can help you get the outcome you need.

Yes, it can. Despite the fervent proclamations of bureaucrats and credit bureaus everywhere, a simple fact remains: negative credit listings are deleted from peoples’ credit reports by the thousands each and every day.

A few years ago, an attorney from Lexington Law. visited with a regulatory agency for a casual conversation with two agents. The Agency’s office, as a matter of course, believed the credit bureaus’ claim that bad credit couldn’t be deleted. The visiting Lexington attorney asked, “How many negative listings would you have to see deleted from consumer credit reports before you would believe that bad credit can be deleted: ten? fifty? a hundred? one thousand?” The agents responded with only blank stares.

“How about 50,000 deleted listings, would that convince you?” continued the Lexington attorney. From his briefcase he pulled a stack of papers six inches high.

“In these pages, we have listed the permanent deletion of over 50,000. listings from our clients’ files in the last two years alone,” he explained. The agents pulled the stack across the conference table and began to pick through the pages, taking in the massive list.

“But have you deleted any bankruptcies?” shot back one of the agents, “we know that bankruptcies can’t be deleted.” The Lexington attorney leaned across the table and ran his finger down the first page.

“There’s one deleted bankruptcy… and, there’s another,… and another,… and another. Should I go on?” asked the Lexington attorney.

The agents sat back in their chairs. “You know,” began the junior agent, “I have this one listing on my credit report that simply must belong to somebody else…”

How is credit repair possible?

The Fair Credit Reporting Act (FCRA) allows a consumer to challenge the information on his credit report on the basis of “completeness and accuracy.” When a consumer files a dispute, the credit bureaus must contact the source of the credit information (the creditor) and confirm that the information is accurate, verifiable, and not obsolete. In some circumstances, the credit bureau is required to go beyond a simple verification of the creditor’s own computer record. If, within 30 days, the credit bureau has not received verification from the creditor, then the credit bureau must promptly delete the credit listing. Learn More.

It’s become an all-too-familiar headline and lead story - job cuts, dot.com failures, corporate restructuring and lay-offs.If you’ve recently lost your job, your first thoughts may be, “how will I make ends meet.” Money matters are a source of stress and frustration for many people. The Federal Trade Commission (FTC) publishes free brochures spelling out your rights when it comes to fair debt collection and credit reporting practices.

Fair Debt Collection

If you find that you can’t pay your bills on time, contact your creditors immediately. Try to work out a modified payment plan that reduces your payments to a more manageable level. Don’t wait until your accounts have been turned over to a debt collector. At that point, your creditors have given up on you. The federal Fair Debt Collection Practices Act requires debt collectors to treat you fairly by prohibiting certain methods of debt collection. To learn more, call the FTC’s Consumer Response Center for a free copy of Fair Debt Collection, or visit www.ftc.gov.

Fair Credit Reporting

Non-payment and late payments may affect your credit rating and your ability to get credit in the future. Although creditors usually consider a number of factors in deciding whether to grant credit, most creditors rely heavily on your credit history. That’s one reason it’s important to make sure your credit report is accurate. For example, if your file showed that you were once late in making payments, but didn’t show that you are no longer delinquent, it would be inaccurate. The credit reporting agency must show that your payments now are current.

The Fair Credit Reporting Act protects you by requiring credit bureaus to furnish correct and complete information to businesses to use in evaluating your applications for credit, insurance or a job. For more information, request a free copy of Fair Credit Reporting.

The FTC works for the consumer to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint or to get free information on consumer issues, visit www.ftc.gov or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.

If you are considering applying for a loan, ordering a copy of your credit report may well be the best place to start. Why? Because it’s also the first thing a potential creditor will be looking at, and even if you pay your bills on time, you will want to ensure that all the information in your credit file is up-to-date and accurate.

Studies have shown that many credit files contain inaccuracies that could affect your credit rating, and even lead to the rejection of a loan application. That’s why reviewing your credit report beforehand may be a good idea, giving you time to dispute any items that may be the result of simple human error or a technical glitch.

And depending on whether you are applying for an auto loan, a mortgage loan, or a loan for business or personal use, different lenders may apply different standards in rating your credit worthiness. For this reason, reading your credit report and understanding how your credit data might be interpreted may give you a chance to improve your credit worthiness from the point of view of a lender.

Before you begin the application process, check your credit report for the following items:

Clerical Inaccuracies

Sometimes credit reports contain inaccuracies that are the result of a computer glitch or a clerical error. These may include payments not credited, late payments, or data mixed in from a credit file of someone with a name similar to yours. Ordering your credit report will quickly show you what the lender will see–then it’s up to you to dispute any information that you consider inaccurate.

Excess Unused Credit

To make your credit more attractive to a potential lender, you may wish to consider reducing the number of revolving charge accounts that are listed as active on your credit report. Lenders will sometimes view too much revolving debt as a negative when considering a loan application.

In situations where you have stopped using a credit account, it is often a good idea to close the account if you don’t plan to use it anymore. Make sure your creditor notates the account “closed at consumer’s request”–otherwise, a prospective lender might assume the creditor closed the account for other reasons.

A few credit cards managed well may improve your chances for a loan–particularly a mortgage loan, where lenders use stricter qualifying guidelines. Another rule of thumb is to keep balances on credit cards around 75% of the available credit limit. Ironically, credit cards that have lots of room on them may be viewed as potential debt, while maxed-out cards make you a less desirable credit risk–both of these situations could compromise your ability to obtain a loan.

30-day and 60-day Late Payments

Even if your credit report contains a couple of 30-day late payment entries that are accurate, many lenders will overlook the occasional late payment if you explain the situation and your credit is otherwise good. Try to avoid any payment being 60 days late however, as this may be a red flag for some lenders–even if they do grant you the loan, it may come at a higher rate of interest and with less favorable terms.

The primary period lenders are interested in on a credit report is the last two years, so try to maintain on time payments, and verify that the payments are being credited properly by checking your credit report regularly.

Avoid Unnecessary Inquiries

Each time a prospective creditor looks at your credit report, an inquiry notation is added to your file, and most inquiries stay on your credit report for up to two years. Inquiries you make yourself, inquiries made during screening for a pre-approved offer of credit, or an inquiry that is part of a background check for employment purposes are not reported to potential credit grantors.)

It is best to avoid over-applying for credit and running up excessive inquiries, for the simple reason that lenders of creditors may think you’re trying to get credit due to financial difficulty, or taking on more debt than you can repay.

Lenders do of course realize that some inquiries are a result of shopping around for the best rates on a loan, and so they will often overlook a block of inquiries within a very recent period. It may help if you explain the inquiries in the application process.

Understanding how your credit report affects your financial future is the key to smart credit management. Incorporating a review of your credit report into your financial planning is also one of the best ways to make sure you meet your goals–especially when those goals involve major purchases, and you’re shopping for a loan with the most favorable terms possible. Learn More.

In this age of information, credit fraud is not a difficult crime to perpetrate. The idea that a thief could gain access to your account information or personal data is not as implausible as you might think–social security number misuse has increased over the last two years, resulting in a variety of credit-related crimes.Fortunately, you can fight back against credit fraud by learning how credit fraud and identity theft occur, and by actively monitoring your credit report for unauthorized account use on a regular basis. Your credit report will list any new activity on accounts you haven’t been using, as well as new accounts that you did not open.

One of the best ways to keep track of new information that is added to your credit report is the CreditCheck Monitoring Service, which provides Online Monthly Monitoring Alerts to inform you of new derogatory information, recent inquiries into your credit, and several indicators of possible credit fraud.

To have credit report information at your fingertips is the best way to shut an identity thief down–you can begin the process of notifying your creditors of the fraud, changing your passwords, and closing down fraudulent accounts before they wind up in the hands of collectors and compromise your good credit.

How Credit Fraud and Identity Theft Occur

Specific personal data, such as your Social Security number, home address and mother’s maiden name, can be all a thief needs to obtain a fraudulent driver’s license, take over existing bank or credit accounts, divert card statements to a different address, or even apply for new credit card accounts under your name. Thieves can obtain this information in variety of ways, including fishing through trash for account statements, lifting cards from lost or stolen purses, wallets and briefcases, or through telephone or Internet scams.

How to Prevent Credit Fraud and Identity Theft

Customers may be in a position to prevent potential identity theft by closely guarding their personal data. For example, never give out your Social Security number over the phone unless you know the company you are dealing with and have initiated the call.

Similarly, if your mother’s maiden name is not likely to be a secure password, consider changing it to something a little more difficult for a thief to obtain. Also, carry only the cards you are actually going to use, and leave official documents like Social Security cards, passports and birth certificates at home or in a safety deposit box.

Account Takeover Fraud

Credit card account statements contain a lot of sensitive information that you don’t want thieves to get a hold of, and even store receipts will frequently have your credit card number printed on them. Sometimes an account number is all a thief needs to make charges and obtain cash advances. It’s a good idea to shred all financial documents before discarding them.

A thief in possession of sensitive information about you may also be able to go one step further, and commit account takeover fraud, simply by calling your creditor, reading off your account number, a partial Social Security number and your mother’s maiden name, and asking them to change the mailing address on the account. For this reason, if you don’t receive a credit card statement on time, you should call your creditor immediately to verify that the address has not been changed.

Pre-Approved Credit Offers

Another source of potential credit fraud is pre-approved credit offers. A thief who intercepts one may fill out the application and change the address to obtain a credit card in your name for which you will never receive a statement. (To combat this, some creditors will not issue a card to a new address on a pre-approved offer certificate, but this policy isn’t universal.) This makes checking your credit report especially important, because it will show you if there are accounts being reported in your name of which you are not aware.

The thief may even make the minimum payments for a while, until such time as the card is maxed out. Then the account would eventually be turned over for collections–in your name, and listed on your credit report.

Click Here to learn more about credit repair.

 
Many people planning to be married take time to reexamine
financial priorities, set a new budget, and establish savings or
debt reduction goals. Being credit-wise consumers means
realizing that managing your credit requires similar planning
and care-and doubly so when you are entering into marriage.

Think about your special personal and financial goals for the
coming year. Are you planning a major purchase or a trip abroad?
Are you working to establish financial stability and security?
Since good credit takes time to build, planning for your future
together should include checking your credit report. This is a
great time for each of you to request a copy of your credit
reports and look them over–not simply for inaccuracies, but for
ways you might improve your overall credit status.

Many of life’s major changes, such as marriage, can impact your
credit, but keeping these credit-savvy tips in mind can help you
keep and build your credit together, so it’s always available
when you need it.

Your Marriage and Future
Getting married brings many financial opportunities to couples
who can combine their resources. As you plan your wedding day,
plan for your future too and take these steps to keep your
credit in tip-top shape.

Notify creditors and credit bureaus if you change your name.
When you change your name at marriage–or any other time–it’s
important that you make sure your creditors and the credit
bureaus are notified of the change. Otherwise, you might lose
your credit history.

Keep credit in your own name in addition to joint accounts.
Women especially must take care to keep some credit in their own
name. (e.g. "Jane Smith" rather than "Mrs. James
Smith"). Every year women who have never paid a bill late
are denied credit because they have no credit history in their
own name.

If either you or your spouse-to-be has had trouble getting
credit alone, try setting up a joint account to capitalize on
your shared income and/or one person’s stronger history. As your
joint account history grows, you should each acquire and
maintain an account of your own as well, to establish your
credit on an individual basis. As you establish individual
accounts, you might close some extra joint accounts, keeping
only those you actually use.

If you anticipate making a large purchase with one of your
credit cards, you might want to request a credit line increase
now, so you know the credit is available when you’re ready to
buy.

Building Good Credit Together

When you apply for credit, the lender will undoubtedly check
your credit report. The information in your credit history helps
lenders decide how much credit and what interest rate you are
eligible for. The better your credit history, the more likely
you are to qualify for the best credit deals, including rates on
a mortgage. But what will creditors be looking for?

Pay Your Bills on Time

Creditors always look for indications that the prospective
borrower is a good credit risk: a person who will pay back his
or her debts in a timely fashion. Obviously, a history of
on-time payments demonstrates that you are just such a person.
But that doesn’t mean your credit history must be perfect for
you to qualify–few people’s are, after all. "Good"

credit can include a few minor dings in your report, such as up
to two credit card payments 30 days late or one installment
payment, such as an auto or student loan payment, 30 days late.
No payments of any kind should be more than 60 days late and
there should be no outstanding public record debts such as
judgments or liens.

Keep Your Debt Load Reasonable

One factor any creditor must assess before offering credit is
the total debt of the person applying. If a large portion of
your income each month is already committed to paying off other
debt, the lender will wonder if you may have trouble paying back
an additional loan. As a rule of thumb, financial experts say
that non-mortgage debt payments should not exceed 10-15% of your
take home pay each month. If your debts are currently too high,
consider ways to pay some down before you apply for new credit.

Avoid Unnecessary Inquiries

Whenever you authorize a creditor, employer, or other
business to check your credit report, an "inquiry" is
added to the report itself–a note that someone has checked your
credit. An inquiry usually stays on your credit report for two
years. A lender considering you for a loan will look at the
number of inquiries recorded there and when they took place. A
large number of inquiries occurring in a short period of time
may be interpreted as a sign that you are either applying for
lots of credit because of financial difficulty or overextending
yourself by taking on more debt than you can actually repay.
(Checking your own credit report, however, does not impact your
credit rating.) Therefore, it’s always a good idea to minimize
inquiries into your credit report. If you’re shopping around for
mortgages, for example, don’t let every lender you consider run
a credit check. You might have to settle for slightly more
approximate estimates on what the lenders can offer you, since
they can’t verify your credit history. But that’s still better
than doing all that shopping around only to find that the lender
of your choice now perceives you as a less solid credit risk and
wants to charge a higher rate.

Eliminate Excess Unused Credit

Just as a high number of inquiries suggests you may be
overextending yourself, a lot of available credit means you have
the capability to overextend yourself in the future, even if you
have not done so in the past. Although people may perceive
having several credit cards with high limits a sign that they
have good credit, too much of this good thing can make them seem
like a poorer credit risk. The lender needs to be reasonably
sure that you will continue to be able to repay your debt in the
future. But if you have thousands of dollars of unused credit
available, you might spend it all the month after your loan goes
through and suddenly have more debt than you can pay off. To
prevent this concern from arising, you should close unused
credit accounts before applying for a large loan, and/or
consider having your credit limits reduced. If you do either of
these things, make sure to ask the creditors to record that the
account was closed or changed at the consumer’s request–you
don’t want anyone to get the impression the bank closed the
account because of problems with your payment habits.

Of course, as with most worthwhile plans, building good credit
together requires a long-term commitment. So set your
credit-wise plans for your new life together in motion now and
stick with them. By doing so, you may reap the benefits of that
commitment for a long time to come. Click Here.

Below is a summary of the FCRA. The full Act can be obtained directly from the Federal Trade Commission’s web site here.

Fair Credit Reporting Act (Summary)

Public Law 91-508

The Fair Credit Reporting Act (FCRA) allows a consumer to challenge the information on his credit report on the basis of “completeness and accuracy.” If, after a reinvestigation by the credit bureau, the disputed information “is found to be inaccurate or can no longer be verified, the [credit bureau] shall promptly delete such information.”

The credit bureaus are required to complete the investigation within a “reasonable period of time.” This period has been set at thirty days.

The credit bureaus can ignore the consumer dispute if they have reason to believe that the dispute is “frivolous or irrelevant.” The FTC commentary on the FCRA cites, as an example of a frivolous dispute, a dispute wherein the consumer challenges all negative items on his credit report without providing any allegations regarding specific items in the credit file. However, “A [credit bureau] must assume a consumer’s dispute is bona fide, unless there is clear and convincing evidence to the contrary.”

When a consumer challenges a negative credit listing on the basis of extenuating circumstances, such as health problems, divorce, job loss, etc., the credit bureaus are entitled to ignore that dispute.

When a consumer submits a dispute which is neither frivolous nor irrelevant by credit bureau standards, the credit bureau must “at a minimum… check with the original sources or other reliable sources of the disputed information and inform them of the nature of the consumer’s dispute.” In some cases of consumer dispute, “Reinvestigation and verification may require more than asking the original source of the disputed information the same question and receiving the same answer.”

In other words, when a consumer files or re-files a valid dispute, the credit bureaus must contact the source of the credit information (the creditor) and confirm that the information is accurate, verifiable, and not obsolete. In some circumstances, the credit bureau is required to go beyond a simple verification of the creditor’s own computer record. If, within 30 days, the credit bureau has not received verification from the creditor, then the credit bureau must promptly delete the credit listing.

In theory and law, the process is deceptively simple, thus leading many people to think that they can easily handle this themselves “for the price of a few postage stamps.” Most quickly discover that the credit bureaus have made it much more difficult than one would imagine. For help in this, we recommend using Lexington Law a professional credit report repair company.

LifeLock Identity Theft Prevention - Save 10%
 COMMON WAYS ID THEFT HAPPENS:

Skilled identity thieves use a variety of methods to steal your personal information, including:

1. Dumpster Diving. They rummage through trash looking for bills or other paper with your personal information on it.
2. Skimming. They steal credit/debit card numbers by using a special storage device when processing your card.
3. Phishing. They pretend to be financial institutions or companies and send spam or pop-up messages to get you to reveal your personal information.
4. Changing Your Address. They divert your billing statements to another location by completing a “change of address” form.
5. “Old-Fashioned” Stealing. They steal wallets and purses; mail, including bank and credit card statements; pre-approved credit offers; and new checks or tax information. They steal personnel records from their employers, or bribe employees who have access.

DETER

Identity theft is a serious crime. It occurs when your personal information is stolen and used without your knowledge to commit fraud or other crimes. Identity theft can cost you time and money. It can destroy your credit and ruin your good name.

Deter identity thieves by safeguarding your information.

• Shred financial documents and paperwork with personal information before you discard them.
• Protect your Social Security number. Don’t carry your Social Security card in your wallet or write your Social Security number on a check. Give it out only if absolutely necessary or ask to use another identifier.
• Don’t give out personal information on the phone, through the mail, or over the Internet unless you know who you are dealing with.
• Never click on links sent in unsolicited emails; instead, type in a web address you know. Use firewalls, anti-spyware, and anti-virus software to protect your home computer; keep them up-to-date. Visit OnGuardOnline.gov for more information.
• Don’t use an obvious password like your birth date, your mother’s maiden name, or the last four digits of your Social Security number.
• Keep your personal information in a secure place at home, especially if you have roommates, employ outside help, or are having work done in your house.

DETECT

Detect suspicious activity by routinely monitoring your financial accounts and billing statements.

Be alert to signs that require immediate attention:

• Bills that do not arrive as expected
• Unexpected credit cards or account statements
• Denials of credit for no apparent reason
• Calls or letters about purchases you did not make

Inspect:

• Your credit report. Credit reports contain information about you, including what accounts you have and your bill paying history.
  • The law requires the major nationwide consumer reporting companies—Equifax, Experian, and TransUnion—to give you a free copy of your credit report each year if you ask for it.
  • Visit www.AnnualCreditReport.com or call 1-877-322-8228, a service created by these three companies, to order your free credit reports each year. You also can write: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281.
• Your financial statements. Review financial accounts and billing statements regularly, looking for charges you did not make.

DEFEND

Defend against ID theft as soon as you suspect it.

• Place a “Fraud Alert” on your credit reports, and review the reports carefully. The alert tells creditors to follow certain procedures before they open new accounts in your name or make changes to your existing accounts. The three nationwide consumer reporting companies have toll-free numbers for placing an initial 90-day fraud alert; a call to one company is sufficient:
  • Equifax: 1-800-525-6285
  • Experian: 1-888-EXPERIAN (397-3742)
  • TransUnion: 1-800-680-7289

  Placing a fraud alert entitles you to free copies of your credit reports. Look for inquiries from companies you haven’t
  contacted, accounts you didn’t open, and debts on your accounts that you can’t explain.

• Close accounts. Close any accounts that have been tampered with or established fraudulently.
  • Call the security or fraud departments of each company where an account was opened or changed without your okay. Follow up in writing, with copies of supporting documents.
  • Use the ID Theft Affidavit at ftc.gov/idtheft to support your written statement.
  • Ask for verification that the disputed account has been closed and the fraudulent debts discharged.
  • Keep copies of documents and records of your conversations about the theft.
• File a police report. File a report with law enforcement officials to help you with creditors who may want proof of the crime.
• Report the theft to the Federal Trade Commission. Your report helps law enforcement officials across the country in their investigations.
  • Online: ftc.gov/idtheft
  • By phone: 1-877-ID-THEFT (438-4338) or TTY, 1-866-653-4261
  • By mail: Identity Theft Clearinghouse, Federal Trade Commission, Washington, DC 20580

To learn more about ID theft and how to deter, detect, and defend against it, visit ftc.gov/idtheft. Or request copies of ID theft resources by writing to:

Consumer Response Center
Federal Trade Commission
600 Pennsylvania Ave., NW, H-130
Washington, DC 20580
The FTC works for the consumer to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint or to get free information on consumer issues, visit www.ftc.gov or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.

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