Celebrate Your Labor Of Love, Your Credit Score, This Labor Day

As Labor Day is quickly approaching, many Americans across the nation are looking forward to celebrating the hard work they have put in all year long. However, your job isn't the only labor of love that can pay off, having a good credit score can too. 

Even though your salary isn't included in your credit history, items such as your payment history and use of available credit are. And, while these may not be on the top of your list of financial priorities since they don't show an immediate financial gain, if you work at them long enough, they can result in more money in your pocket.

Here are a few of the financial benefits that can come from having a good credit score:

• Help you get a new job. If you aren't yet employed, are in between jobs, or are looking to start down a new career path; having a good credit score can impress your potential employer. In a previous blog post, we talked about how many Americans were required to go through a credit check when applying for a job. Thus, it’s very important to keep tabs on your credit scores! 

• Lower your interest rates. One of the many reasons why lenders check your credit scores is to not only determine loan eligibility and amounts, but also your interest rate. By having a higher credit score, you may qualify for a lower interest rate, which can result in significant savings over the life of the loan.

• Better insurance policies. A higher credit score indicates that you are a lower insurance risk. Therefore insurance companies may oftentimes look at your credit history to see your previous repayment history before setting the terms of your insurance policy.

At PrivacyGuard.com, you can sign up for daily credit monitoring that will give you access to your three credit reports and scores. Try to make sure your two labors of love, your job and your credit score, are providing you with the most financial benefit possible this Labor Day weekend. 

The Difference Between Good Debt and Bad Debt

Debt - most of us can’t stand it. When we think about how much we owe on our homes, cars, student loans, credit cards, etc., it can be overwhelming. Have you ever wished that you could just win the lottery so that you could pay off your debt? Just a high enough jackpot to pay off your bills to live debt free would be great, right? 

Well, don’t wish away all of your debt. In the eyes of lenders, there is such a thing as “good” debt and bad debt and it’s helpful to know the difference.

Lenders may be more favorable with certain debts. Having debt on something that could increase in value over time and may contribute to your overall financial health could be considered “good” debt. 

Here are two examples of “good” debt:

• Home purchase – Homes usually appreciate in value, so your mortgage loan may be considered an investment. 
• Student loans – This debt may be considered “good” because it’s usually used towards education – which in turn could help you earn money over a lifetime.

So what is a bad debt? Disposable finances or money spent on things you don’t necessarily need can be considered bad debt.

Below are two examples of bad debt:

• Going out – It’s easy to look past these “small” expenses, but they can easily build up. Shopping sprees, going out to dinner and movies can be considered bad debt. 
• Vacations – That trip to the Bahamas you were planning on going to later this year before you paid off your other bills could be another example.

There’s a fine line between “good” and bad debt and it can be easy to lose track of your expenses. Consider getting your credit history by regularly reviewing your credit report. This may be helpful when prioritizing your payment plans for the future. 

Four Credit Myths Debunked

It's no secret that there are plenty of myths when it comes to your credit scores. Just because you've heard something all of your life, or heard it from someone you trust, doesn't necessarily make it true. 

Here are four common credit myths debunked:

1. Myth: One score is all I need to check. Maybe you checked your score with one of the bureaus, and everything looked good, so you moved on with your busy life. Think again. Creditors won't necessarily just look at one score; they could look at all three primary credit reporting bureau scores (TransUnion, Experian and Equifax) to get a complete picture of your payment habits. These three scores are rarely identical. You may have to look at all 3 main credit bureaus to make sure they have the right information and credit history.

2. Myth: It is impossible to take out a loan if I don’t have any credit. When reviewing your credit application, lenders look at your identification, account history, public records and inquiries. If you don't have a credit history, you may have to have another person with an established credit history co-sign on your loan –but it isn't impossible.

3. Myth: High income and credit scores make for the best credit card deals. If you have a high income and a high credit score, you may be receiving great credit card offers with fantastic sounding rewards in the mail.  It may not be because of your credit standing however. Paying attention to the interest rates and annual fees on these offers can help you make sure you really are getting the best deal. Oftentimes, these better rewards come at a higher cost.

4. Myth: I'm only responsible for half of joint debt. Sharing a loan with another person doesn't necessarily mean you are simply responsible for half of it. Both you and the co-borrower are fully responsible for the debt. This means even if you are just co-signing so that someone else can get a credit card or a loan, the amount of credit they are taking out is added to your debt-to-income ratio. If they make late payments or don't pay at all, this credit history can also be added to your credit report.

As with anything, it's important to be educated on the myths and realities of credit.

Customer Disservice: The Newest Form of Identity Theft



Just about nobody looks forward to making a call to any company's customer service center, and now, you have even more reason to dread the task as it seems identity thieves are popping up here too. They are already snooping through your mail, falsely filling your prescriptions and even phishing for information online, and now, they're scamming you on the phone and online.

These fake customer service identity thieves aren't just attacking through phone calls; they are also tricking customers into sending their information through chat sites and forum sites. Generally, the types of information they are asking for are your birthday, address, social security number and even you mother's maiden name.

Here are a few ways you can protect yourself while interacting with customer service professionals:

• Pick reputable service providers. One of the easiest ways to protect yourself is to pick the best service providers before engaging in business. Not all companies offer secure access to customer service or security measures to protect your identity.

• You call them, not they call you. Fake customer service predators will attempt to contact you and lure you into sharing your personal information through tactics that make it seem like you are missing out on a great deal. It is highly unlikely that real customer service representatives would ever call you, so don't hand over any information unless you call them.


• Monitor your accounts. Most identity theft victims are successful because they aren't caught right away. Always be sure to monitor your credit or bank accounts to make sure nothing fishy is going on.

• Freeze. While your first reaction after finding out you may be an identity theft victim is to close all of your accounts, this may actually be harmful to your credit score. Instead, simply freeze your accounts until you can sort out the situation.

Identity theft is more common than you think, and thieves are out there constantly coming up with new ways to get to your identity. Your best defense is to always be careful who you reveal your personal information to, and to enroll yourself into identity theft protection services.

Is Social Media the Next Big Credit Score Factor?

If you think your social media posts, photos, and activities are only interesting to your family and friends -- think again. It’s entirely possible your boss or future boss is taking a look at your public social profile to know more about your personality and character. Marketers, on the other hand, would gladly want to know what you like and dislike about products and services to better serve your needs and wants.

If social media content proves to be useful in background checks and marketing, can it also be used for checking credit worthiness?

With the massive amount of information posted online – 58 million average tweets per day, 4.5 billion Facebook likes, and 40 million Instagram photos - lenders may find it hard to ignore social media. It’s a vast new frontier waiting to be tamed, but how?

Start-up lenders like Neo Finance, Lendo, and Affirm are defying the traditional credit score model used by the 3 big credit bureaus -- Equifax, Experian, and TransUnion. Instead of relying mainly on traditional credit scores, they can sometimes consider more social factors of the applicant to gauge their credit worthiness.
Critics would argue that this type of system is vulnerable to fraud, while proponents would say that it could open up a lot of opportunities, especially for people with vague or less than great credit histories.

So, what are the pros and cons of using social media to estimate ones’ credit worthiness?

Pros:

• Authentic social media profiles are hard to fake – everyone can register for more than one profile per social network. All you need are different email addresses. However, the authenticity of a social profile is easy to determine with one look. Immediately, you can recognize the genuine profile from the feel of items in the timeline and the connections that the account’s owner has built over the years. Con artists will be hard-pressed to replicate an authentic profile because natural social media behavior takes time, intellectual and emotional investments.

• Quality over quantity – Traditional credit scores rely on cold and hard figures. The nuances of personality and character are not considered when evaluating loans and interest rates. The result is that deserving businesses and individuals are sometimes denied loans because their numbers didn’t look right. In considering the social content, a lender could see the human element that could explain causes of low credit scores such as a sudden sickness or job layoffs.

Cons:

• Bias issue – A traditional credit report is blind to race, religion, gender, status, and other personal background that may result in unfair profiling. It upholds the principles of the Equal Credit Opportunity Act that prevents discrimination against loan applicants.

In social media, a credit approver can sometimes plainly see information such as race, age, sexual preference. This can open the credit applicant to stereotyping and prejudice that they could have avoided with regular credit profiling.

• Privacy issues-With the public growing increasingly wary about online privacy, not every creditor or bank has taken the leap of faith with using data on these websites for credit assessment. While most major banks use social media for marketing and outreach, they are often discreet when it comes to their stances on viewing the information of their target customers. As such, not every creditor is buying in to the social media trend. This makes social media still a vastly unexplored and unproven credit scoring aspect.

While traditional credit bureaus are still not incorporating social media in their algorithms, it could really just be a matter of time. In fact, it has been reported that Equifax is testing how social media sites can help prevent financial fraud.

Maybe it’s time you take a second look at how you use your social media. And be sure to think twice before posting those photos of you from college that you wouldn’t even want your grandmother to see!

Add Credit Awareness To Your Back To School Shopping List

If you're the parent of a student, you're probably already aware of the fact that the start of the new school year is just around the corner. And, while you may be overjoyed that your kids are heading back to the classroom, you might not be thrilled about what it can cost you. However, with a little planning, you can keep this year's school supply shopping from turning into a credit nightmare.

1. Establish a plan. Before you rush out to the stores, try to make a plan and a budget. Figure out exactly what your kids need, what you already have at home and how much you have to spend. Figuring out what you can realistically afford can help keep yourself from having to swipe your credit card for a surprisingly big payment.

2. Use discretion when dealing with the option to open retailer credit cards. Chances are you've considered the “too good to be true” credit card offer at the checkout counter. This may be tempting, but you might want to resist the temptation and stick with your original method of payment. While these upfront savings may be nice, if you can afford to pay for it now, you might save yourself from potentially racking up interest costs later.

3. Use sales tax holidays. One way to save if you're on a tight budget is to take advantage of your state's tax-free holiday. Generally held over a weekend or a whole week, you can  make school-related purchases tax free, which could save you hundreds of dollars.

Being aware of your three credit reports and scores before you hit the stores can help save you from making mistakes that will potentially negatively affect your credit score.

To make sure you're at the top of the class when it comes to your personal credit report knowledge, visit the PrivacyGuard website.

Top 3 Ways To Help You Avoid Identity Theft From Skimmers

Top 3 Ways to Help You Avoid Identity Theft from Skimmers While Traveling

Being Mindful Along The Way

Identity Theft Travels
Traveling is fun but it can also be the perfect time for identity thieves to attack. It doesn't matter whether you’re traveling to another state or another country, it can happen. 

Here are some ways to help protect your identity while traveling:

1. Be careful when using ATMs. 
One technique used to steal identities at ATMs is called skimming. Here, thieves have the ability to attach a device that scans the magnetic strip of the card. This obtains the information they need to copy it. They can also use a hidden camera to record the PIN so they can pretend to be you and open your account. 

To avoid this, consider using ATMs located inside banks as they are less likely to be tampered with. Before using any ATM, you may want to inspect it first. If anything seems wrong, try calling the bank to check before using it.

2. Use cash or credit instead of debit.
There have also been cases where skimmers have been found installed in gas pumps. Using cash or credit can be safer than a debit card (where you’ll have to enter your password). A PIN number is just another element that can make the process easier for identity thieves, as they can use a “keypad overlay” to gain access to your four digit password. Using cash or credit can help eliminate this risk. 

3. Get a chip-and-PIN card.
Chip-and-pin cards don’t have a magnetic strip that can be easily copied. Instead, they have a microchip that often requires a PIN before it can be used. 

These cards are popular in Europe and Asia, but not as much in the US. So if you want to use one card for both domestic use and traveling, consider getting a combined ‘chip’ and ‘strip’ card. Ask your bank if they have one that has both a strip and a chip. These can be a safer and more convenient option.

Skimmers are on the constant lookout for victims, but being aware of their existence and their common tricks can help prevent the chances of becoming a victim of identity theft.

Credit Reports vs. Credit Scores: Part 2

Credit Reports vs. Credit Scores: Part 2

 What’s The Difference?

Continued from Credit Reports vs. Credit Scores: Part 1, this section focuses on a few common misunderstandings about credit scores.

The most common misunderstandings about credit scores involve (but are not limited to) the following:

Your credit score is a single number: In the US, there are three major credit bureaus that collect and maintain credit information: Experian, TransUnion and Equifax. Each bureau has its own specified and customized formula to determine your final credit rating. Banks, lenders and insurance companies also have their own models for computing their clients’ credit scores; therefore, your credit standing can vary from one evaluator to another. There are also a number of consumer scoring services available that utilize similar, though different algorithms to calculate your credit scores.

More money means a higher credit score: Income is not included when looking at your credit scores. The scores reflect how well you manage your credit regardless of your income.

Credit scores go down when checked: There are two types of inquiries – soft and hard. A soft inquiry is when you check your own scores through a third party service. You can check your own scores as often as you like, without negatively impacting your credit standing. A hard inquiry on the other hand happens when a third-party source checks your credit information. For example, if you’re securing a loan to buy a new car, the car dealer may check your credit information at one or more of the three major credit bureaus. This would reflect on your credit reports at one or more of the bureaus. Too many hard inquiries in a short amount of time could adversely impact your credit rating and scores. 

Keep a close eye on your credit reports from each of the bureaus and be mindful of the elements listed above. All in all, it can take a bit of patience and vigilance, but you’ll be rewarded with peace of mind and possibly a stronger credit standing.

Credit Reports vs. Credit Scores: Part 1

Credit Reports vs. Credit Scores: Part 1

What's The Difference?

What’s the difference between a credit report and a credit score? Some people think that credit reports and credit scores are one in the same. That’s not true. A credit report is an in-depth record of your credit history, while a score is an algorithmic rating based on your credit information. 

Your credit reporting includes a wide range of information about your credit standing and history, such as:

Who you are: This includes your name, social security number, date of birth, and in some cases, employment information.
Your credit: This is composed of your credit card accounts, mortgages, car loans, school and other loans, how much credit you have paid, and your payment history.
Your public record: This contains information about court proceedings and decisions for or against you, tax incentive grants or tax liens, or bankruptcies.
Inquiries: This simply contains a list of all the companies and people who recently requested a copy of your credit report. These are also known as “hard inquiries”. 


A credit score on the other hand, is a numerical assessment of your credit standing  based on the information in your credit report. Determinants of your credit scoring generally include the following:

Type and duration of accounts: Examples of these are your loans, mortgages and credit cards, and how long you've had them for.
Bill payment history: Late payment history could adversely impact your scores. Payment history is one of the more important determinants of your credit scoring. 
Available credit: Your credit utilization ratio – based on your reported credit limits and how much of that credit has been used – can also impact your scores. Higher utilization rates can adversely impact your credit score. This is why you may want to consider keeping older credit cards that may have extra balance capacity (which can offset utilization rate).
Outstanding debt: This includes all other loans and credits granted to you other than those previously mentioned. Too much debt, or numerous debt/credit lines opened in a short amount of time, could adversely impact your credit scores.

Be sure to check out Part 2 on common misunderstandings about credit scores.

When Does Your Credit Score Matter?


When Does Your Credit Score Matter?

Even If You Don't Borrow, Your Credit Score Still Matters

If you don't own or plan to own a home or a car, and you don't have a credit card, then you might be wondering if your credit score still matters. The answer is, yes. 

There are still a variety of situations in which having good credit will go a long way.

Getting a job: In some cases, a potential employer will want to look at your credit report  before hiring you. This is especially true for those working in finance, law enforcement or other managerial positions. Sometimes, employers request to obtain your permission before checking your information, but declining could raise questions. 


Renting an apartment: When renting an apartment or other type of housing, the landlord may ask to see your credit score. Sometimes they can look for information on your previous history of making payments and your current income to make sure you are not a financial risk.

Insurance policies: It’s becoming increasingly more common for insurance companies to check your credit scores to determine the premiums they will charge, or if they will cover you at all. 

Setting up utilities: While utility companies won't deny you service based on your credit score, they might require you to put down a security deposit before beginning service. This is to cover them in case you end up not making your payments.

The bottom line is that even if you don't plan on taking out any lines of credit, your credit score is still an important number for a variety of other life circumstances.

For more information on credit scores and reporting , visit the PrivacyGuard blog.