Ring In The New Year With A New View On Your Credit

Congratulations, you've made it through another holiday shopping season. All the members of your family are happy with their gifts and you have a feeling of great satisfaction after another successful holiday in the books. Now it’s time to survey the damage. “So, how far over budget did we go this year?” seems to be a common phrase uttered among many of us just after the holiday season. Well, whether you've completely blown out your budget or you've managed to stay within your limits, there are a few things that you may want to think about when it comes to finances, specifically, monitoring your credit profile and protecting your credit score.

It’s important for us as consumers to keep control of our credit, not just as we see it from our own point of view, but from a potential creditor’s point of view. When lenders review a loan or credit application and its accompanying documents, they’re usually looking for answers to a few basic questions:

Has this person had credit in the past and has he paid it back in a responsible manner?
Does this person have enough or too much outstanding credit based on his financial means?
Does this person consistently pay his bills on time every month?
Does this person open up new credit accounts very frequently?
Has this person had any major trouble with his credit in the past and if so, why?

The answers to these questions could highly influence the decision of whether or not to extend new credit to a consumer. The majority of these questions may be answered by looking at a consumer’s credit report and credit score. Now, if you've done well with your credit in the past and you believe that your answers to the questions above are all favorable, you may be in good shape when it comes time to apply for a mortgage, car loan or credit card. 

However, what if your credit report and score paint a slightly different picture of what your credit looks like? What if there’s something listed on your credit report that you were unaware of until now? Perhaps a few missed payments on an unknown credit card account or an account that you closed years ago that still shows activity and a balance. Unauthorized activity or errors like these can cost you both time and money, especially if they are allowed to linger for an extended period of time.

If you find that you have issues like these on your credit report, you may now be faced with the arduous task of going through your credit history and trying and correct these problems before they have a chance to further damage your credit report and score.  So, how can you help prevent a small problem from turning into a big headache down the road?  Is there a way that you can find out if any activity has taken place in your account without your knowledge?  Enter credit monitoring.

A daily credit monitoring service can help you keep an eye on all three credit reports (Experian, Transunion, Equifax) on a daily basis. It can also serve to advise you of other activity such as inquiries that may be made into you accounts, new public records or derogatory information that may have been added without your knowledge.  As you can see, this type of service can help you stay in control of what happens with your credit and empowers you to maintain your credit report and score at the level that it deserves.

So, if you’d like to do something for your credit in this New Year, you may want to consider using a daily credit monitoring service like the one offered by PrivacyGuard. It can help you protect your credit profile and help you start out this New Year on the right path toward a safer, more secure credit profile.

Top 8 Myths About Your Credit Report

Based on all the information (and misinformation) that’s out there regarding credit reports and scores, we could just as easily be discussing “The top 80 myths about your credit report.”

Joking aside, managing your credit is an important part of your financial life. We all suffer from information overload from time to time, so it’s good to know what actions can truly help or hurt your credit scores. Hopefully, we can clear up some misconceptions about credit reporting and empower some of you to start taking a more active role in managing your credit. 

1. Checking My Own Credit Report Will Hurt My Credit Score
This myth is listed first because it has stood the test of time. Checking your own credit or ordering a copy of your own credit report will not negatively impact your credit score.  A personal inquiry into your own credit is termed a “soft” inquiry.

An inquiry where a potential creditor or lender reviews your credit due to an application for new credit is called a “hard” inquiry.  It is these “hard” inquiries that could impact your credit score.  
So, if you haven’t checked your credit report due to a fear of hurting your score or doing harm to your financial health, put that fear aside and start reviewing your credit now.

2. All Bad Debts Or Bankruptcies Automatically Fall Off In 7 Years
This statement is only partially true, depending on certain circumstances. One type of bankruptcy, called Chapter 13 bankruptcy, (which involves the reorganization of debt may fall off of your credit report 7 years after the filing date.

Chapter 7 bankruptcy (the discharge of debt) may  take 10 years from the filing date to fall off of your credit report.  In both instances, you may want to consider  keeping track of dates and actions that have been taken in order to ensure that these records are correct and that information does not remain listed on your credit report any longer than the law states.

3. I Pay My Bills On Time, I Don’t Need To Check My Credit Report
This may be one of the most deceptive myths on the list.  According to a study, as many as 40 million Americans have errors on their credit reports. In 20 million of these cases, the mistakes are described as “significant”. Any error on a credit report should at the very least, be considered an important item that needs to be corrected.

Would a potential lender or creditor agree that an incorrect address or name is an “insignificant” error?  Perhaps an even worse scenario to consider is the possibility that any error could be the result of an attempt at identity theft. Regardless of how well you manage the payment of your monthly bills, consider checking your credit report regularly.

4. All Three Credit Reports Are The Same
Each credit bureau has similar credit information on you, but there can be differences. Internal reporting differences and timing variances between information updates such as address changes or new credit extensions may also exist between the three reporting bureaus. Consider regularly checking the information listed on all three credit reports (Equifax, Experian and Transunion) for accuracy and consistency.

5. If I Pay Off All Of My Debts, I’ll Have Perfect Credit
Your credit is a running history of your ability to borrow money and pay it back timely and in full. If you've been late on a few payments with a certain credit card company, the act of paying off the entire balance on that card in a subsequent period will not clear the late payments from your credit report. Plus, there are many other factors that are involved in calculating your credit score.

6. Using My Debit Card Helps My Credit Score
Using your debit card is the same thing as writing someone a check for services or having money electronically transferred to pay for an item or service. There is no loan or extension of credit involved, so there is no benefit to your credit profile when using your debit card.

7. Outstanding Medical Or Utility Bills Won’t Affect My Credit
Although medical or utility bills are not reported on your credit reports, outstanding medical or utility bills that have gone into collections may indeed be reported to credit bureaus by the collection agencies. These can be very damaging to your credit since they may remain on your credit report for a long time before even being discovered. Be especially careful with medical bills, as these are notorious for being sent into collection after a very short period of time.

8. The More Money I Make, The Better My Credit Will Be
You may make more money today than you did ten years ago, but the credit bureaus don’t monitor annual earnings, nor do they use earnings figures in their credit scoring models. The mere fact that you earn more money than your neighbor or your brother-in-law does not prove that you would manage your financial matters any better than they would. So, while earning more money may make it easier for you to responsibly manage your finances, it has no direct effect on your credit score. 

7 New Year’s Resolutions For Your Credit

The New Year is just around the corner! The old traditions of great food, champagne, parties and fireworks have once again come and gone. However, there are aspects of one tradition that can last throughout the entire year and even beyond in certain circumstances. Yes, of course, we’re talking about New Year’s resolutions!

New Year’s resolutions come in all shapes and sizes. We've all made them, some serious and some silly, some strictly adhered to and some not. Perhaps this year’s list of resolutions should include a commitment toward giving your financial health some consideration. After all, most of us have made resolutions in the past about losing a few pounds or getting back into shape, so maybe it’s time to put your credit through a bit of a workout. With that in mind, we've outlined a short list of New Year’s resolutions that can help you stay on top of your credit profile.

In today’s environment of tight lending standards and ever-increasing occurrences of identity theft, consumers need to understand the importance of protecting their credit reports and scores. Your choice to undertake some or all of these resolutions can help put you on the right path toward a healthier credit life.

7 Important New Year’s Resolutions To Consider For Your Credit:

1. Review your credit report
If you haven’t done so recently, you may want to consider getting copies of your three credit reports and check every section for any errors or suspicious activity. You may want to do this every so often over the course of the year to verify that the information in your credit report is accurate and that it’s free of any unauthorized activity. 

2. Clean up your credit report
If you find any errors during a review of your credit report, follow the appropriate procedures to have them fixed or removed as soon as you can. While some errors may seem to be minor (spelling or omission errors with names or addresses are common), in certain circumstances, they could still affect your ability to obtain credit or secure favorable credit terms. Consider contacting both the reporting organization (bank or company that provided information to the credit bureau) and the appropriate credit bureau in order to have any problems corrected in accordance with their policies.

3. Check out your credit score
Your credit score is a very important element in the credit reviewing process. You may want to start keeping a closer eye on your score and gain a better understanding of what information is used to calculate your credit score. Once you have a baseline level of your credit score, you’ll be more aware of how it can be affected by your financial and credit management activities.

4. Monitor your credit report and score
Monitoring your credit report and score can help warn you of changes or unauthorized activity that may take place within your credit profile. A triple bureau credit monitoring service can save you some time by scanning your credit files for you and alerting you of any monitored changes that may occur in any of your three credit reports (Experian, Equifax, Transunion). If any unauthorized activity has occurred, you may find out quickly enough to stop it from becoming a major problem down the road.

5. Safeguard your personal information
Make an effort to be careful with any documents (statements, pay stubs, bills) or electronic devices (laptop, smart-phone) that may contain personal information like account numbers, social security numbers or passwords for financial accounts. If this type of information ends up in the wrong hands, it can be used to wreak havoc with your credit. 

6. Start reconciling your credit card statements
This should go without saying, but many people don’t even bother to check the transactions that show up on their credit card statements every month. Some simply open up the bill, check the amount (or minimum amount) due and start writing a check. This can be a big mistake, as any simple errors or even serious attempts at outright theft can go undetected while you pay for them out of your own pocket. It doesn't take long to reconcile your credit card statements and at worst, you’re simply confirming the activity that is being reported to you as correct. If you do find an error, you may just save yourself a few bucks. If you find unauthorized charges, you may save yourself a great deal more.

7. Make an effort to learn a bit more about your credit report and score
Information is key, so the more you know about your credit report and score, the better prepared you may be when it comes time to apply for a mortgage, loan or other line of credit.

Even if you vowed to make all of these resolutions and fell a bit short on one or two by the end of the year, you would probably still have learned a great deal about your credit life. Equally as important, you may have found a new process that can add a layer of knowledge and protection to your credit report and score.

Holiday Shopping: Does Layaway Affect Your Credit?

With the holiday season right around the corner, shoppers are hitting the stores and their wallets in a big way. For many shoppers who are on a tight budget, layaway seems like an appealing option; you can buy the gifts you really want to give now without having to pay everything up front, pay interest or go through a credit check. However, what happens if you don't make your payments on time? Can layaway potentially affect your credit score?

Before we get to the answers to these questions, let's review how layaway works. When putting an item on layaway, you put down an initial minimum deposit and you'll generally pay a small service fee (generally $5 to $15). After that, you'll have a certain amount of time (generally one to three months) to make payments toward the item's total price. Once you've paid in full, you can take the item home with you. If you wind up not making your payments, your layaway will be cancelled and the item will return to the store's shelves. You also might be charged a small cancellation fee.

Even if you don't make your layaway payments, this information may not be reported to the three credit bureaus. Therefore, using layaway has a neutral effect on your credit score.

However, the downfall to using layaway is that you run the risk of paying too much for an item as many stores will lock you into the full price and then later put the item on holiday discount.

For now though, layaway is a suitable option for buyers who are looking to shop this holiday season without having to put a strain on their credit card debt or without having to prove they have good credit.

5 Weird Ways You Could Hurt Your Credit Score

Applying for too many loans, having a high debt ratio or making late payments; these are all common ways that consumers know they could be hurting their credit scores. However, there are other, inadvertent things you could be doing that may also be having an impact.

Here's a list of five weird ways you could be hurting your credit score:

1. Paying old debts. While paying off your debts is generally a good thing, in the short run, it could hurt your score. For instance, if you pay off an old debt that was not on your credit report, the debt will show back up in your credit history once you start making payments again. 

2. Having only one type of account. While it may seem convenient or even responsible to have only one credit card or one loan, 10 percent of your credit score is based on the types of credit you have. So, when you can, you should consider mixing up your debt portfolio.

3. Applying for a new cell phone plan. Some mobile phone companies conduct hard inquires on their customers, just like a bank or lender. This means if you're jumping around from provider to provider, you could be bringing down your score.

4. Buying a motorcycle. Thinking of buying a motorcycle as a fun weekend getaway vehicle? Think again because the effects on your credit score might not be so fun.  Taking out a loan for a motorcycle is sometimes submitted as revolving credit, which makes it look similar to credit card debt. And, with debt making up 30 percent of your score, this could be a huge hit to your credit score.

5. Disputing errors on your credit report. Under the Fair Credit Reporting Act, consumers have the right to dispute any errors in their credit report. However, while the disputed item is being evaluated, the account is not included in your score. This means if you're applying for new credit, your credit utilization ratio could be impacted. 

With your credit score constantly fluctuating, it can be difficult to keep track of what is causing changes to it. The only way to really know what is going on is to monitor your credit history on a regular basis.

How Long Will Information Stay On My Credit Report?

If you’re human, chances are you have made a credit mistake or two. You may be wondering how long that mistake will haunt you. While it may seem like it will never go away, rest assured that it eventually will.

Credit scores are very important; lenders use your score along with the information they find in your credit report to assess your risk as a borrower (in other words, to help them decide whether or not to loan you money and what kind of rates to give you, among other things). Understanding credit reports and what is in them (including how long information stays on them) is key to being an educated borrower. 

Your lenders send information (good and bad) about your credit activity to the three major national credit reporting agencies (Experian, TransUnion and Equifax). Lenders send information such as accounts paid off, late payments, judgments and inquiries, all of which will impact your credit history and credit score. If you’re worried about some of your information (like a late payment), you can rest easy knowing that not all of your credit information will stay on your report forever. 

Different information remains on your credit report for different lengths of time. Positive information, such as an account paid off (like a mortgage or auto loan) may stay for up to 10 years since the account’s last activity date. A revolving credit account (including a credit card) that has been paid as agreed to (meeting minimum payment amounts and making payments on time) may also stay on your credit report for as long as it’s open or for 10 years from the date of last activity. 

Most negative information is reported for seven years. This includes late payments, foreclosures and accounts in collections. Judgments may also remain for seven years from the filing date. A paid tax lien will typically stay on your report for seven years from the date paid and unpaid tax liens will remain on your credit report for 15 years. 

A public record of bankruptcy will stay for 10 years, though individual accounts may start falling off after seven and a half years. Inquiries stay for one to two years. Promotional inquiries (like pre-approved credit card offers) and existing account monitoring or review inquiries stay for 12 months, but do not impact your credit score. Personal inquiries stay for 24 months, but do not impact your credit score either. Hard inquiries (credit checks from a potential lender or credit card company) may remain for 24 months, and too many hard inquiries in a short time period could negatively impact your credit score. 

Being aware of how long information (both good and bad) stays on your credit report can make you a savvier consumer. To access your 3 bureau credit reports and scores, visit the PrivacyGuard website.

Identity Theft – Protect Yourself Against This Growing Problem

As consumers, we can’t ignore the fact that identity theft has become a serious issue in the U.S. According to a major study, it is among the fastest growing crimes in the country, with more than 12 million consumers victimized by identity theft in 2012. This equates to on average approximately 1 victim every 3 seconds….and the numbers are climbing.

By now we've all read an article about identity theft or heard the phrase uttered on the news and thought

“Well, it won’t happen to me”.

This is exactly the type of attitude that identity thieves hope for while they plot to steal your personal information and run up as much debt as possible using your identity. We all hope that certain things “can’t” or “won’t” happen to us regarding any potentially bad social, medical or financial situation. The truth of the matter is that it can happen to anyone at anytime.

How Do I Know If I'm At Risk?


Do you ever:

Use a computer to access any online social, business or financial information?
Use an ATM Machine?
Use a smartphone?
Use a credit card or a debit card?
Have a bank account of any kind?
Receive or pay any bills on a monthly/quarterly/annual basis through the mail or electronically?

If you've answered “yes” to at least one of these questions, as most of us would, you may consider yourself a worthy candidate for identity theft.

You don’t need to be wealthy or famous. You don’t need to own any real estate, drive an expensive car or have a high paying job. Identity thieves simply want to grab your personal information and use it as quickly as they can, for as long as they can, to steal from you. If they acquire your social security number, they may use it to file a false tax return and receive a refund check from the IRS before you've even had a chance to file your own legitimate tax return. The list of potential fraud goes on and on.

How Can Identity Thieves Get My Personal Information?

Stealing a wallet or purse.
Online hacking of credit card or other data banks.
Stealing credit/debit information through ATM's.
Family/Co-workers opening accounts using information readily obtained.
Going through your trash or swiping from your mailbox.

There are many other ways that your information can be compromised.  The main idea that needs to be conveyed here is being cautious when it comes to carrying, assigning or even destroying anything that contains personal information.

How Do I Further Protect Myself Against Identity Theft?

While most of us take some precautions when it comes to information safekeeping, you can further protect yourself against identity theft by following these basic rules:

Never carry your social security card in your purse or wallet.
Avoid using public networks or shared computers to access any websites that contain detailed personal or financial information (bank, credit card, investment, social security, etc.).
Before filling out information or buying anything from an online site or store, verify their authenticity and make sure they use a secure setting.
Shred all documents that may contain personal information.
Share personal information sparingly and only with those that you trust.

In addition to taking these steps, the use of a credit report monitoring service may help alert you to suspicious activity in your credit report. A high quality credit monitoring service will alert you of activity through e-mail, phone or mobile device. Plus, identity theft protection offers a powerful set of tools, further supplemented with professional ID theft guidance, and support to help you correct any issues resulting from certain activity or inquiries made on your credit.

By being vigilant and proactive, you can be sure that you’re taking the proper steps to protecting your identity and minimizing your risk of identity theft.

4 Ways To Protect Your Social Security Number

Your social security number is one of the most important pieces of information that you possess. It holds the key to your state and federal earnings, tax and pension information. It is also frequently used to document employment history, medical history and numerous other vital records. Health and life insurance companies usually use these magic digits to identify you. The simple message: Guard your social security number and keep it as private as possible.

Here are a few simple things that you can do to help keep your social security number secure:

1) Safeguard your social security card. Never carry your social security card in your wallet or purse. It should be kept at home, locked in a safe location such as a fire-proof storage safe along with other important documents such as deeds, titles, wills, etc.

2) Safeguard any documents that list your social security number. Any documents that contain your social security number such as tax returns, health and life insurance statements, medical records or other legal documents should also be locked away in a safe place. When these have become dated, they should be shredded and disposed of properly.

Any of these documents contain enough information for a thief to create false identities and open new accounts using your credit and identity as the foundation.

3) Never include your social security number in an e-mail. Be wary of the information you send over the phone or internet. E-mail accounts can be hacked by outsiders. Even legitimate e-mail recipients frequently forward or copy e-mails without much thought about what information may be erroneously distributed to others. Your information can easily end up in a number of different hands and could make you vulnerable to identity theft.

4) Monitor your credit reports and statements. Consider monitoring your bank and other financial statements along with the social security statements that you receive periodically and review them for errors or suspicious activity.

When it comes to identity theft, your social security number should be considered the golden goose. It’s important to take necessary measures to keep your identity safe. Other than safeguarding your physical social security card and number, the use of a credit monitoring service like PrivacyGuard can go a long way toward helping prevent the theft of your social security number from turning into identity theft.

Employers And Your Credit Report

Social media is not the only thing that employers can look at nowadays when conducting background checks on prospective employees. Can an employer pull your credit report as part of the application process? The answer to this question is yes. Why? Many employers simply feel that applicants who are responsible with their own finances would use better judgment, make better decisions and act more responsibly when faced with work related issues.  

Employers also believe that employees who are in good financial shape may be able to give greater effort at work without the added stress of personal financial problems. If your credit report is littered with unpaid bills or other negative issues, it could affect your chances of finding a job or landing that great new opportunity that seems like it was made for you.

So, what should you do if a prospective employer asks to see your credit report? The key is to make sure that things are in order before you start your job search and monitor your credit report for any changes that may occur. Here are a few tips that you can follow:

• Be Prepared - Get A Head Start On Prospective Employers - Check your credit report and score for any errors or negative issues that can have an effect on your credit standing. If you are actively job searching, consider having this as one of the first tasks on your list. If you wait until you are asked to see your credit report, you may risk not having time to review it to correct any problems before the employer gets a copy.

• Fix Any Mistakes ASAP - If you find any mistakes, no matter how insignificant they may seem, consider contacting the credit bureaus and follow the procedures to have them fixed or removed. This may require a written statement and other documentation that prove that the information contained in the credit report is inaccurate.

• Add A Statement Of Explanation Or Dispute For Negative Items - If your credit was affected due to an illness, death, extended layoff, identity theft or any other extenuating or extraordinary circumstance, you are permitted to add a short written statement to your credit report explaining the situation, and the reason for the negative information.

• Agree To The Credit Check And Be Prepared To Answer Any Questions - Once you have gone through your credit reports and corrected any issues or added explanations, you can begin your job search with confidence that you have done all that you can to present your credit history accurately. Try not to deny access to your credit reports if a prospective employer asks for it, as this could raise a red flag. You will now be better prepared to answer any questions that may arise concerning your credit report.

By keeping on top of your credit report and score, you can be reasonably sure that you’ll have no surprises if your credit report is reviewed by an employer. The use of a credit monitoring service can help you by providing you with your three bureau credit reports and alerts to any changes in your credit reports and scores.

Is My Credit Score High Enough To Buy A House?

What credit score number do you need to buy a house? Everyone wants to know the magic answer to this question. Home buyers are concerned about their credit score because they know that their score carries a lot of weight when it comes to getting approved for a mortgage for a new home. The problem is that the complicated scoring system can make credit scores confusing, and the more you try to research scores, the more confused you can get.

Here’s what you really need to know. Your credit score is a numerical representation of the information in your credit report, which shows how you have borrowed and repaid money going back up to 10 years. Scores take into account five main financial factors:

1. Your payment history on loans and credit cards
2. The total amount you currently owe on all of your accounts
3. The length of your credit history (how long you have been borrowing)
4. Any new, recently opened accounts
5. The mix of credit you use (credit cards, auto loans, etc.).

Scores can vary depending on which bureau they’re coming from. There are three main bureaus: Experian, TransUnion and Equifax. Mortgage lenders can use data about a home buyer from any of the bureaus, along with proprietary formulas and other factors (like debt to income ratio) to assess risk- or in other words, to determine an applicant’s likelihood of paying back a loan.

Applicants with lower credit scores have a statistically higher probability of defaulting on their loans, and may be viewed as a higher risk to lenders. Those with higher credit scores may be viewed as lower risk to a lender. Their high score shows that they have been responsible with paying off their bills in the past. Applicants with lower scores may have a harder time getting approved for mortgages, but if they do get approved with their low score, they may end up paying more in interest. In a search for a home, it can pay to have good credit. Borrowers with better credit scores tend to pay lower interest rates.

There is no across-the-board requirement of a credit score for mortgage approval. Lenders each have their own formulas; some set the bar higher than others, and some are willing to work with buyers with lower scores.

Late payments can seriously lower a home buyer’s credit score, so it is important to make your payments on time. Overuse of credit cards (the amount of credit you use compared to the amount of credit available to you) can also lower one’s score. If your credit cards are maxed out, this may be seen as a higher risk to lenders. Consider checking your credit report at the onset of your home search to know where you stand in the eyes of a lender.

Common Credit Mistakes (and How to Avoid Them)

Common Credit Mistakes
Your credit score can determine whether or not you get approved for a credit card, mortgage or auto loan. It can also be used to determine whether or not you can rent an apartment or even get a job. The importance of your credit score doesn’t stop there though; it also can impact how much you’ll pay on utility deposits, more importantly, interest rates.   

There are different scoring systems, but for all scores, higher equals better. With a higher score, you may be more easily approved for credit and will get the best interest rates available. 

So how do you know how to keep a good credit score? Consider avoiding these common credit mistakes: 
  • Carrying large balances: Keeping your balances as low as possible increases your credit utilization ratio, the percentage of your credit limit that you use. The amount you currently owe on accounts can make up to 30 percent of your credit score.  
  • Closing credit cards: You might think closing credit cards you don’t use anymore is the responsible thing to, but your score can actually be hurt by closing accounts. This is because when you close an account, you lower the amount of credit available to you. Remember your credit utilization ratio from above? It is ideal to have credit available to you, but not be using too much of it. 
  • Making late payments: About 35 percent of your score is related to your payment history. Late payments on credit cards, loans or other bills could lower your score if those late payments are reported to the credit bureaus. 
  • Defaulting: Failing to pay back the amount you owe on a loan or credit card can seriously impact your score. Bankruptcies and foreclosures are considered the most serious.  
  • Opening too many new lines of credit: Each time you apply for a credit card or loan, an inquiry into your credit history is made. This may negatively impact your credit score.  Opening multiple credit cards or loans is a red flag; it may signal that you are in financial distress and/or at risk of becoming overextended.  Having multiple new accounts can also negatively impact your credit score. 
  • Not having a credit card: You may think paying all cash all the time is the best thing to improve your credit, but if you have no credit cards, then you have no credit history. You are considered “un-scoreable” because there isn’t enough information to calculate a score. With no score, you may appear risky to lenders. If you have an auto loan but no credit card, you may still benefit from a credit card, as that could help diversify your credit file. The mix of your credit history accounts for 10% of your score. 
Avoiding as many of these mistakes as possible and maintaining responsible spending and saving habits can help set you on the path to achieving your financial goals.  

Check Your Credit Report - Credit Report Inquiries Explained

There seems to be a great deal of confusion when it comes to credit inquiries on credit reports. Many people erroneously believe that all inquiries that are made into their credit reports are universally reported, and have a detrimental effect on their credit scores. Luckily, this is not the case and we’re going to shed some light on this important subject. This subject is one that has kept many people from checking their own credit reports for fear of hurting their credit scores.

The Q&A on Credit Report Inquiries:

What Is A Credit Inquiry?

A credit inquiry is a record of a request to view your credit file. Any time your credit file is accessed, whether by a creditor looking to extend credit to you or by an insurance company or employer looking into your financial record for business purposes, an inquiry is recorded. However, not all of these inquiries are treated in the same way, nor are they all visible to any party that pulls a copy of your credit report.

Who Can Make An Inquiry Into My Credit Report?

According to the Fair Credit Reporting Act, only businesses with a “permissible purpose” may view your credit report. Other than individuals or businesses that fit into this general definition, only you and those that you have given written permission may pull your credit report. These may include employers, landlords, government agencies and other businesses that may need to check your credit report for internal purposes, licensing, and legal issues.

Are All Inquiries Reported In The Same Way?

Not all inquiries are reported in the same way.

 There are two types of inquiries that are recorded by the credit reporting bureaus:

1. Hard Inquiries –These are inquiries that are made into your credit report as a result of your application for credit for things such as auto loans, credit cards, mortgages, personal loans or other types of credit extensions. These inquiries are recorded on your credit report and remain there for two years. These can be viewed by any other party that pulls your credit report within that time frame.

2. Soft Inquiries –These are inquiries that are made into your credit report by you, or another party to whom you have given permission, as part of an information gathering process or for reasons other than extension of credit. These are inquiries done by you, a prospective employer, insurance company, landlord or government agency or any other non-creditor. These types of inquiries are visible only to you, and are not reported to those who pull your credit report as part of a credit application process.

How Do These Inquiries Affect My Credit Score?

Soft credit inquiries have no effect on your credit score. Several hard credit inquiries in a short period of time may adversely affect your credit score. This is due to the way that scoring models work along with the presumption that consumers who apply for a great deal of credit within a small time-frame may be in a less than optimal financial position. There are exceptions to this rule, mainly in the case of shopping for mortgage rates where a high number of credit inquiries that fall within a short date window. This usually happens up to 45 days, and these are recorded as a single inquiry on a credit report, so as not to penalize a consumer for “shopping around for the best rate”.

Does Credit Monitoring Affect My Credit Score?

Inquiries made by a credit monitoring service are treated in the same way as your own inquiries into your credit report. They have no effect on your credit score. This is a good reason to consider using a credit monitoring service to check your credit file for any changes or to alert you to a high number of inquiries in a short period of time. This is a very good early indicator of identity theft as any party that has stolen your information may attempt to open many credit accounts in your name.

5 Reasons To Monitor Your Credit Reports

It’s no secret that one of the best ways to maintain your credit status and avoid potential problems with your credit is to continually check for inaccuracies and irregularities that may exist in your credit reports. Routine checks of your credit reports and your monthly credit card statements can go a long way to help prevent any errors or unusual activity from affecting your credit score

Let’s face the facts-- with the complexities of today’s financial networks; we’re all at risk of various types of fraud which could result in adverse effects on our credit scores. We do our best to keep close possession of credit cards and IDs with the notion that “as long as no other person has my cards or information, I’m safe”. Unfortunately, this can give us a false sense of security since a great deal of personal information gathering and financial theft now occurs through electronic means. 

Invalid reporting is another issue that can hurt your credit. This particular problem occurs more frequently than was once thought. Errors can remain on a credit report for years, as many people don’t think to review their credit information until they’re ready to commit to a large purchase like buying a house or car. It’s at this critical time that they may discover a wrong address or an old collection notice and then face the daunting task of scrambling to repair the damage before it has an effect on their long term plans.

One of the keys to protecting your credit is the ability to identify errors or fraudulent activity before they translate into credit problems; or perhaps worse, a case of identity theft. By keeping a close eye on all 3 credit reports (Equifax, Experian and Transunion), you can detect these and other issues early and take the necessary steps to resolve them before they become major problems. The use of an effective credit monitoring service can make checking and monitoring your credit easy and effective, since activity is reported almost immediately.

Why you should continually monitor your credit report and credit score:

1. Early detection of identity theft and credit fraud. While checking your monthly statements for unauthorized charges is good basic practice, it is not sufficient to counter all of the new tactics that are being used by identity thieves. By monitoring your credit report on a constant basis, you can identify any new accounts that may have been opened, see any new addresses that may have been set up or view any accounts that may have collections against them without your knowledge. These issues alone are reason enough for you to begin monitoring your credit reports. 

2. Inaccuracies on your credit report. Genuine mistakes can be listed on credit reports. Credit records are accessed, reviewed, updated and reported every day. This sheer volume of activity lends itself to reporting errors resulting from computer software issues, keypunch errors or simple mix ups of files between persons with similar names or addresses. Unfortunately, some of these errors can be significant and may lead to denial of credit or higher risk assessment and therefore higher interest rates on various types of loans.

3. Monitor fluctuations in your credit score. Credit scores normally fluctuate in small increments over the course of weeks or months. However, if you see your credit score move dramatically in a short period of time and you haven’t had any noteworthy activity that would warrant such a change, it could be due to an attempt or incidence of identity theft.

4. Protection of your financial future. Knowledge is power. Try to have a thorough understanding of your credit situation and activity at all times. The ability to recognize an issue and take immediate action can mean the difference between stopping a problem before it ever starts or the need to deal with a major problem several months down the road after your credit has been affected. Don’t let small problems progress to a critical stage.

5. Monitoring your credit doesn't hurt you. Checking your own credit reports or monitoring your own credit score is important. These types of “inquiries” (soft inquiries) don’t necessarily directly affect your credit history or credit. 

For all of these reasons and others, consider having a plan for monitoring your credit regularly. Active credit monitoring is a helpful way to keep track of your credit profile. Making use of a credit monitoring service can help protect your credit status and give you some peace of mind. 

Get The Job, Not A Stolen Identity

If you've been on the job hunt for a while, you can probably fill out job applications in your sleep. Name, date of birth, phone number, email address, social security number, and previous employment history seem to be the most easy to answer questions . However, the information you're giving out may lead to more than just a potential job, it could also lead to identity theft.

Here are a few tips for keeping your identity safe while seeking employment:

• Only give out limited personal information. While companies may ask for your date of birth and social security number on an application, according to one source, you don't have to share this personal information until after you've received a job offer.  Also, you should try to remember to always hand back any paper applications to the human resource department or hiring manager, not just any company employee.

• Do your homework. Online job posting sites are great when they are legitimate, but there are plenty of scammers who post fake job listings. If you are asked for your bank account number, a background check or a copy of your bills before meeting your potential employer in person, you should proceed with caution. Similarly, before applying for any jobs, you should your research to make sure the business has a website that's easy to locate, physical address, phone number and license. 

• Stay safe online. If you do apply for a job online, make sure your Internet connection and the site itself are secure. You can tell if a site is secure by looking for the “https” or a tiny lock icon in the URL. You can also create a separate email address and/or invest in a temporary cell phone, that way your identity stays safe from any phishing scams.

• Keep a record. Always keep a record of which jobs you have applied for and on what sites. Some scammers will contact you saying they saw your resume on a site that you have actually never posted your information to. And, even if you did post your resume on that site, as mentioned above, you should do your homework on the business to make sure they are legitimate.

Job hunting can be a grueling, time consuming process without the added frustration of having your identity stolen. If you choose to follow our tips in being extra careful while finding a new job, you should enroll in our Identity Theft Protection service so that you can keep tabs on your identity at all times! 

How Your Friends List Can Impact Your Ability To Get Credit

Have you ever thought who you choose as a Twitter or Facebook friend could have an impact on your ability to get a loan for a home or new car? Well, it might.

Lenders are testing the waters on using social networks and other data you may have never even considered to determine whether or not to loan someone money. Lenders traditionally use your credit information along with income information (verification of income from W2's and pay stubs), savings information (like checking and savings account statements) and tax returns to determine an applicant’s risk. 


But, one lending institution in Germany has found that social network connections can play a part in indicating one’s credit worthiness.   

These companies believe that humans are pretty good at determining how trustworthy a person is. Assessing peoples’ social network connections can give the company insight into whether or not that person will pay their own bills on time. What does that mean? If you’re friends with someone who owes that lender money, you may have a harder time getting a loan yourself (especially if that person is someone you interact with frequently). 

In addition to your social networks, one company in Germany is also pulling data from applicants’ accounts and from the manner in which a customer completes an online loan application. For example, the amount of time spent reading information about the loan and whether or not you complete the application from your work or home computer. Or whether you use all capitalized letters (or all lowercase letters) are all taken into account to paint a more complete picture of an applicant. 

One lender that makes cash advances to small businesses takes into account the business’ presence on social media sites on the principle that a business that pays attention to Facebook and Twitter as a way to handle customer service is more likely to be responsible in other areas of their business, including accounting. 

While these types of screening activities may be less frequent at this time (the vast majority of lenders are not yet checking up on you on Facebook when you apply for a loan), it may represent the future of lending requirements.  Lenders may start looking at data outside of your credit report to assess your creditworthiness. This could be good news for people with no credit or with low credit scores because of a short credit history

The downside of course is that our social networking activities are not entirely indicative of our behavior as consumers or borrowers. We may all be punished by being Facebook friends with friends or family members who aren't financially responsible (we all have friends and family who aren't always at the top of their financial game).  People could also easily clean up their friend lists to appear more clean-cut, but may have a hard time doing the same to their credit score

Either way, this can also serve as a good reminder to be careful about what you post on your social networks. Your online activities are already being watched by potential employers-- it wouldn't be much of a stretch for lenders to start doing the same in the near future. 

3 Credit Checking Benefits

Many people never bother to check their credit history regularly. They may only discover problems with their credit report when they’re denied a major loan by a lending company or if their application for a credit card is rejected by a bank.

Performing accurate and regular credit checks may help you avoid such headaches and may be beneficial to your overall financial health in the long run.

Here are some of the benefits:

1. Better credit score: As you may already know, lenders or creditors look at factors like income and credit score to determine an individual’s creditworthiness. It helps them decide whether they should extend credit to a particular person or not. The higher a person’s credit score, the better their chances of getting extended credit are. Credit scores can be dependent on several things including the age of the credit report, the types of inquiries made by institutions about the report, and the diversity of credit accounts on the report. 

Keeping pace with your credit report can have a considerable effect on your financial stability. By ensuring that you have a good credit score, you can take advantage of many credit services including home mortgages, car loans, and low-interest credit cards — financial options which may not be easily available to you if you have a bad credit history.

2. Discovering errors in your credit report: Because credit reporting agencies handle numerous reports each year, clerical errors and glitches in computer systems may happen. These inaccuracies could harm your credit rating, so it’s better to discover them early so that you can have them rectified by the agency concerned.

3. Detecting identity theft: Identity theft can happen when a criminal opens accounts in your name and accumulates balances over time, leaving you to deal with debt collectors’ demanding payment for loans you never owed. Checking your credit report regularly can help you detect these fraudulent activities arising from identity theft. If you suspect identity theft, you can ask your agency to flag your report with a fraud alert.

Credit reports are easily available from credit reporting agencies. Some of them allow consumers to see the reports directly from their official websites, while others sell copies for a reasonable cost.

8 Tips to Avoid ATM Identity Theft

ATM's are conveniently located, easy to use and provide us with an easy way to get some quick cash with just a swipe of a card and a few keystrokes.  This makes them a staple of everyday life here in the U.S. and unfortunately, a great target for thieves.  Since their early days, ATM's have been targeted by criminals in many different ways.  However, recent advances in technology have transformed ATM theft into a state of the art operation.

No longer does someone need to stand near you or look over your shoulder to secretly read your personal identification number or account information.  This can now be accomplished by the use of miniature cameras and electronic reading (a.k.a. skimming) devices.  These particular cameras are usually fitted into a false top on an ATM located directly above the keypad.  Skimmers can be positioned as a fake card slot that fits over the real slot on the ATM or as a false insert over the magnetic reader on the door to the lobby or entrance point of the ATM.

When an ATM user swipes his/her card to enter the lobby or inserts the card at the ATM, the false reader takes the bank account number and stores it on an electronic device or feeds it via wireless transmission to a storage facility on a computer or other external device.  The user’s pin is then read by the small hidden camera and is used in conjunction with the bank account number (and other bank information that may now be accessed)  to immediately withdraw funds, create new debit cards or open new credit accounts.

You can protect yourself against fraud and potential identity theft by being cautious whenever using your credit/debit card at any ATM and by following a few simple tips:

1. Try to avoid using private ATM's located at restaurants, bars or other small establishments, as these are usually privately owned and don’t have the same security features as those found in banks or other larger enterprises.

2. Avoid free standing or unsecured ATM's that are outdoors as these are very easy to rig with skimming devices and/or cameras.

3. Check the magnetic strip that is used on the access door to the ATM machine to be sure that it has not been tampered with in any way.  Thieves can insert false strips that can read the card’s information when it is slid through to gain entry.

4. Look around for hidden cameras that may be spying on ATM users in order to get access codes and other information during the login procedure.

5. Take a good look at the ATM machine itself prior to inserting your card to make sure that the slot for the card and/or the keypad have not been tampered with or altered in any way.

6. Try to always cover your hand when you use the keypad to enter your PIN.  This helps prevent any cameras from capturing your keystrokes.

7. If you have a problem where cash is not distributed from the ATM, notify your bank immediately.  It may be a legitimate problem with the machine, but you shouldn't take any chances.  Reporting the problem as soon as possible documents your action in case there is any fraud involved.

8. Monitor your bank account through your bank statements and check your credit reports regularly.

You can further protect yourself from ATM and other fraud by using a credit monitoring service like PrivacyGuard that offers numerous services including identity theft protection and identity fraud support services.

How To: Change Your Address When Moving

So, you've bought a brand new house, and are all ready to start turning your new house into a home. As you begin to pack up everything you own to move it down the street, across the state or even across the country, there is one thing you won't want to leave behind: your mail. Making sure you've properly updated your address with your bank, utility companies, loan institutions, credit card companies and even the credit bureaus is important to keeping your credit and identity safe.

Before you move, fill out a change of address form with the post office. Instead of waiting until you're settled in and potentially missing important mail or letting your important mail fall into the wrong hands, fill out the form in advance and schedule the date you want your forwarding service to take effect. 

However, just because all of your mail is being forwarded, don't assume that the senders have your new address; it is your responsibility to update your address with all of your creditors and anyone else you do business with.  Otherwise, you could end up in a situation where you are being penalized for late payments on bills you never received.

Before or right after you've moved, you'll also want to update the address in your credit file, and there are two ways to do this:

1. You Should: Update your address with all of your open credit accounts. Then, the next time these lenders report any updates to the three main credit bureaus, they will also include updates on your account information. 

2. You Should: Send two proofs of address such as a bank statement, driver’s license or utility bill, etc. along with a note stating you have moved to each of the credit bureaus.

The process to update your address with all three credit bureaus can take time, so be sure to check back when them after 30 days to see if the correct changes have been made.

With PrivacyGuard's credit monitoring services, you will be notified as soon as your updated credit reports reflect your new address. This acts as a safeguard to make sure your new address is not only reported correctly, but also as a warning sign of potential identity theft if your address is inaccurate or changed without your knowledge.

How Canceling Your Credit Card Could Damage Your Credit

If you are not using a credit card, should you cancel it? You may have heard conflicting information on this topic. Like many issues surrounding credit, it depends on the situation. However, properly closing a credit card does not automatically damage your credit.

High interest rates, yearly fees, and too much temptation to use a paid off card are good reasons to close a credit card account. However, be sure you understand how closing the account may affect your credit.

View the full article here.

Preventing Child Identity Theft

Carelessness with personal information may hurt a child’s chances of having a healthy credit history.

Taking necessary measures to protect one’s own identity is extremely important—but it’s just as important to protect a child’s. Parents can be busy filling out documentation relating to school enrollment and for participation in clubs or other extracurricular activities throughout the school year. Personal information is dispensed that identity thieves can use to sign up for a credit card or secure a loan. A study established that 2.5% of households with children (18 years and younger) have experienced child identity theft. 


Child identity theft often goes undetected.
Adults have numerous ways to detect identity theft because there’s a paper trail to follow and examine: bills, statements and notifications that arrive at regular intervals. Unusual activity, unauthorized payments and other evidence of identity theft will usually show up, as long as we take the time to look over this documentation. Many people also guard against identity theft by monitoring their credit scores. A sudden change in a credit score can indicate unauthorized use of your credit card, bank account, or personal data. 

Because children don’t have a credit history, parents wouldn't be checking their child’s credit information to check for identity theft.  Child identity theft can happen when the thief uses a child’s social security number to secure a credit card or a loan. Armed only with a child’s name and social security number, the thief can use a false birth date to create what’s known as a “synthetic identity.”  A “synthetic identity” can be created when the thief combines a social security number with a different birth date.

Preventing child identity theft involves awareness and action.
A small measure of diligence can go a long way toward protecting against child identity theft. For starters, it’s wise to discuss identity theft with your children, stressing the strategies that can be used to thwart this illegal activity. Never give out a child’s social security number unless it’s absolutely necessary and you feel confident that it will be secure. If possible, put paperwork with identity information through a shredder rather than simply tossing papers intact into the trash. 

Urge children to keep passwords confidential, whether it’s for a computer or for access to websites and online accounts. For children, computer identity theft may not result in financial losses. However, there’s definitely potential for emotional damage though social network postings. 

Establishing the relationship between identity theft and credit scores.
Most financial advisors encourage parents to help their children start building a credit history before they go to college. Discussions about identity theft could provide a good opportunity for parents to explain the importance of good credit and how identity theft can harm your credit score. Those first steps towards adulthood –getting a job, opening a bank account, getting a credit card—can also be the beginning of a good credit history. 

Two Shocking Facts About Identity Theft

Identity theft is not the first thing on people’s minds when talking about crime. Yet in this modern age with technology being the forefront of communication, it has become one of the most well-known crimes in America.

What’s even more disturbing is the fact that identity theft seems to be becoming more complex over the past few years. Identity thieves are becoming smarter, more creative and more audacious than ever in their exploits.

To put things into perspective, here are two shocking facts about identity theft:

1. On Average, there is one incident of identity fraud every 3 seconds.

The speed at which thieves are perpetrating identity theft and the number of victims affected has grown significantly. In fact, reported cases of identity theft have increased by one million in just the past year alone. This means that in the time it takes you to read this sentence, there will be at least one new victim of fraud.

2. More than 1.5 million victims know the thief.

What’s worse is that the majority of identity theft victims know their perpetrator! According to the 2013 Javelin Strategy & Research Report, there are more than 1.5 million consumers who were victims of familiar fraud, or cases wherein the victims know the fraudster. Here is just another example of how crucial it is to be careful of the company you keep!

If you think identity-related crimes are still the stuff that Hollywood movies are made of, think again. It’s very real and it’s happening right now. While the government does everything it can to help us keep identity thieves at bay, it’s up to us to protect our identities from anyone. Proper web browsing habits, securing personal items properly and enrolling in credit monitoring  are our best bets in stopping identity criminals.

Three Relatively Unknown But Exploited Ways To Steal Your Identity

Protecting your identity does not necessarily end at just shredding documents or choosing strong passwords. Identity thieves can be very creative and can attack where and when you least expect it.

Here are 3 ways through which identity thieves can steal vital personal information:

1. Unsecured Wi-Fi connections:

Free Wi-Fi in a public place is great, but can also be the perfect location for identity thieves to get your personal information. How? Not all public Wi-Fi networks are properly secured, which can enable hackers to sniff out your personal information.

This does not mean that you should completely stop using free Wi-Fi services. Be sure that you have the right security programs or apps set up on your device. Consider installing software protection such as firewalls, anti-spyware and antivirus software. Avoid conducting any online banking transactions on unsecured networks, too.

2. Smartphone theft:

Losing your phone to a thief is horrible enough. However, this can even lead to another, more dangerous kind of theft on your identity. Using the personal information stored in apps, thieves can easily break into your other accounts and retrieve data that can allow them to cash in.

You may want to install an app to allow you to remotely wipe your phone or make sure you’re taking advantage of the password function on your phone. Therefore, if your phone is ever stolen, thieves may have less opportunity to get into it.

3. Public records.

While you may not be posting much of your personal information online or on social networking sites, your data can still be found on other sites.

For example, some websites have information such as full names, addresses and zip codes that can be available on their public databases. This form of data is often used to verify the identity via security questions.


Being aware of these three areas of possible ID theft vulnerability can help you cover more of your bases. It can be a challenge to secure all potential routes to your personal information, but it has to be done because the alternative of getting your identity stolen is a much worse fate.

Do You Have Credit Report Errors?

Do you have credit report errors? There's a good chance that your answer to this question is "yes." 

Why is this cause for concern? Well, errors on your credit report can lead to a change in your credit score, which can be a key factor when determining your interest rates, and lenders sometimes have cutoffs for certain rates. 

For example, say you have a score of 695 and the cutoff is 700. Those 5 points on your score could keep you from receiving that better rate, which can mean more money in your pocket. Or, in an even worse case scenario, those 5 points could result in you not receiving the loan at all if your score becomes too low for lenders to deem you creditworthy. 

We have also blogged about how credit scores can be a determining factor for housing, employment and even insurance. Even a small error in your credit report like the one described above could result in you not getting the apartment, job or necessary insurance that you've applied for.

Even if there aren't any obvious errors in your credit history, try not to overlook factual errors on your credit report such as your name or birthday. 

So, what does all of this mean? This means you should consider monitoring your score more closely and on a regular basis, so you can find and prevent future errors on your credit report!