Credit is a necessity today in order to make purchases online, book vacations, buy homes and cars, and much more.
However, we often hear of credit card fraud and identify theft. In addition, credit-reporting agencies make errors.
How can you learn if this has happened to you? More importantly, how can you obtain a free credit report?
There are three major credit reporting agencies: Equifax, Experian, and Trans Union. These agencies do nothing
but record credit records and provide the information, on request, to potential lenders for the millions and millions
of people who use credit. Any lender may elect to use any of these agencies when reviewing your credit history
for a credit card or potential loan. Your entire life history pertaining to credit is contained in these databases!
How could an error appear on your credit report? Let's say your name is James Michael Thompson. There are probably
thousands of people who share that name. They do not share the same Social Security Number or address, but if a
data input person is tired or distracted, they could easily record a transaction in the wrong Mr. Thompson's records!
It could be a good report or bad report being input--perhaps even an unpaid debt that is seriously delinquent or
a legal judgment (law suit for payment). If the REAL Mr. Thompson applies for a new auto loan or an additional
credit card, he would be turned down because there is a bad history in the credit report.
Sometimes errors in credit reports are due to fraudulent use of a credit card. Some time ago, stores threw the
carbon copies of credit card machine tickets into the dumpster and people stole them. Electronic touch pads and
scanners have solved this problem, but there are still ways that credit fraud or identify theft can happen to you.
A true case history: A gentleman walked into a car dealership and wanted to buy a car. An unscrupulous salesperson
recorded his personal information and pocketed it for use in carefully planned identify theft credit fraud scheme.
The thief then opened a mail box at Mailboxes, Etc. in the gentleman's name and applied for several credit cards
he knew the car buyer did not own--after all, the had the gentleman's credit records in front of him. Those cards
were approved, obtained, and over $50,000 in debt was incurred on the fraudulent credit cards before the person
was caught. The only reason the gentleman knew to look for fraud on his credit report was that his car loan was
denied for "too many recent credit inquiries". While the problem was eventually resolved, much stress
and work was required before the identify theft was corrected completely. Eventually the thief was arrested, but
that problems caused by this fraud were a nightmare for the defrauded gentleman to fix.
Many people who use credit cards regularly and are very busy professionals with large incomes simply open their
credit card bill and write a check, seldom checking carefully for small purchases that may not have been made by
them. It's surprising what percentage of credit card users fall into this trap. Always review your credit bills.
It is a good policy to obtain a free credit report at least every few years, or more often if you suspect some
type of fraud or errors are being made. In 2003, the FIC (Fair Isaac Corporation) began providing one credit report
free each year to anyone who requests his or her own personal credit report. This makes it simple and easy to see
exactly what is on your credit report. Simply look online for "free credit report" and be certain you
locate a truly free report site. Some sites say "free" only to, later in their site, add a charge for
processing your report. The once-per-year credit report is completely free of charge.
If you need to see or want to see reports from all three credit reporting services, or if you need to see a report
more than once a year--perhaps to verify a correction has been made to your file--you can obtain these reports
for around $9. Many services online will obtain all three credit reporting agency files for you for a reasonable
fee. Only ONE report for year is free of charge.
Prudent use of credit cards will help you maintain a good credit score. Paying all debts on time will ensure that
your credit report and credit score provide a history indicating you are a reliable, trustworthy person. Clearing
up any errors will also ensure that what is reported is all about YOU and not about a thief or someone with a similar
name.
Safeguard your credit by protecting your credit cards from theft. For a small fee, and sometimes even for free,
credit card companies will provide a credit protection service whereby, should your card be lost or stolen, the
service will immediately cancel your cards and you will not be liable for fraudulent charges. In some cases, you
may be liable for up to $50 in charges, but that is certainly better than finding yourself attempting to resolve
$50,000 in fraudulent debt! Some services cover all your credit cards; others cover only the credit card they issue.
Whatever you do, plan to locate a credit card "insurance policy" of some type!
Do not record credit card numbers in files in your home that are unlocked or locked with an easy to break lock.
Home robbers often look for credit card information to use online in your personal file drawers. If your credit
card company sends you "checks" for easy cash advance withdrawals, cut them up. If you do wish to hold
one in reserve for an emergency, place it in a secure, well-hidden location. Thieves look in files for these checks
as well.
If you make credit purchases online, be absolutely certain that you are entering information into the site you
are believe you are accessing. One of the new scams is to "redirect" you to a fake site that looks similar
to the real site you are trying to purchase from. Never respond to email that says, "press here to pay" or
provides a link to follow. Actually enter the URL in the address bar of your browser yourself so you know exactly
what site you are entering. Better yet, use an online payment service such as PayPal, which provides a debt card,
if you request. You can fund purchases only by providing proper information to PayPal. If someone stole your PayPal
debit card, they would also have to find a means of stealing your PayPal user password in order to make fraudulent
purchases.
Do NOT keep your credit card numbers stored on your computer! Those nice utilities that fill in forms for you
can be hacked and all your precious information drained into someone else's computer. Keep your credit information
to yourself.
Knowing that your credit report is correct and that you are protecting yourself against fraud and identify theft
in the best ways possible, will help you rest easy knowing your financial credit history is safe and correct. Carelessness
with credit can be the source of much physical, mental, and emotional pain, not to mention the loss of valuable
time to investigate and repair the problems. For peace of mind, obtain a free credit report, review your credit
card bills, and know that your physical and financial lives are healthy and safe.
|
