It Pays To Be Credit Informed
You can save thousands on life’s major financial purchases with a positive credit score.
By knowing your scores before you apply, you are keeping cash in your pocket by applying to get the most favorable loan terms.
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Your credit information includes everything from your purchasing, borrowing and payment history to where you live, work and what you earn. It also has other details such as phone numbers and can sometimes even include license, registration and work history. In other words, your credit info is a pretty good snap shot of you.
Should someone get a hold of this information, they can do one of two things – legally, they can determine if they would like to extend you more credit, and illegally they can commit identity theft and become you in enough ways to falsely purchase goods or borrow monies in your name.
While banks, legal and lending institutions struggle with how to prevent and prosecute identity theft, the fact is that you, the victim, are still left financially destroyed by it. There are steps you can take to secure your credit inform and prevent the likelihood of identity theft.
The Fair Credit Reporting Act
The Fair Credit Reporting Act came into being in 1970 to protect consumer information and privacy. It was the first act to regulate exactly what businesses could do with your private information and how credit companies could assemble your scores. It also began the process of standardizing the credit-reporting process.
By requiring that it be automated and by limiting the information that could be included in a credit report, the Fair Credit Reporting Act ended the practice of collecting unrelated personal information about a person such as marital status, sexual orientation and behavioral habits as part of a credit file. Now, with all credit actions being reported in the same way and with the same information to agencies, there was less a chance of abuse by institutions. However, this very process of automation opened the door to a whole new kind of abuse that has become prevalent today – identity theft.
How Is Accessible Your Credit Inform?
Over 7% of all Americans will have their identity stolen this year. That is about 15 million people each year who wind up with surprise charges of an average of $3,500. Could you afford that? Identity theft is one of the fastest growing forms of crime, the identity theft statistics reported each year just paint an uglier and uglier picture.
Identity theft can be done by means as simple as someone peeking over your shoulder or fishing through your garbage can to get a receipt with your credit card number or, it can be as complex as a network of hackers breaking into government or institutional databases to steal your information. The important thing to remember is that you are rarely directly targeted; however, you are directly responsible for the charges. While banks and credit cards promise to do everything to prevent and fight identity theft and its charges, the reality is that until their very long charge challenge and investigation is complete, you are out the money.
What can you do?
The first thing you can do to protect your credit information is to become more mindful of your surroundings. Don’t enter pins or passwords if there are people close enough to see what you are doing. Use a shredder to destroy all receipts. Keep your social security card and driver’s license separate from each other and never give out any information on accounts, passwords or your social security number if someone calls you. This last one is tricky, if you are calling a bank or service, then you can be reasonably sure of who you are dealing with. If they call you, however, there is no way of knowing who is on the other line.
Use a Credit Monitoring Service
The Fair Credit Reporting Act provides for the right for you to receive one free credit report per year. You can contact any of the major credit agencies to request your report. You should be mindful of the small print; many will enroll you in one of the automatic credit monitoring services for a monthly fee if you do not notify them you do not want that service. However, having an agency review and monitor your credit is a good idea.
It doesn’t cost much but the moment there is any kind of suspicious behavior on the account – you will be notified. You can also use a credit service to help you work on your credit history. Not everything shows up on all the reports and if you gather reports from several agencies you will be able to address any issues that appear. It is rare that there is something on your credit report that cannot be worked on in some way, having a service help you figure out how is a great idea.