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Identity Theft Archives | Ovation Credit Repair Services

Understanding Your Credit – Score, Reports and Bureaus

By | Credit Reports

Understanding Your Credit

Most Americans do not realize how credit scores, reports and bureaus actually work. In fact, 42 percent believe the myth that lenders must report to all three major credit bureaus. This is wrong and causes a huge headache at times. The truth is that your score could vary by as many as hundreds of points between your files at each of the bureaus.

This is just one of many examples of credit misinformation. When you research how credit works, there is a web of knowledge to uncover. It all helps you become a better borrower, as you can pay your debts and manage new credit more efficiently.

Credit Scores & FICO Explained

Your credit score, or “FICO score,” is something you need to mentally master. It is a single output that significantly impacts your borrowing abilities and creditworthiness. All credit score factors matter to you – therefore, it is essential to have a solid understanding of how they work.

The Types of Credit Scores

While there are many types of credit-scoring algorithms, the majority are a type of FICO score. This is why the term “FICO” goes hand-in-hand with “credit score” so often. If you hear the term “FAKO score,” it just means anything but a FICO score.

Here are some different credit-scoring models that exist:

  • BEACON
  • CE
  • Empirica
  • FICO
  • VantageScore 3.0

At least nine of 10 lenders use a FICO score to screen applicants.

 

(Source wwww.myfico.com)

How Does FICO Calculate Your Credit Score?

  • Payment History = 35%
  • Amounts Owed = 30%
  • Length of Credit History = 15%
  • New Credit = 10%
  • Credit Mix = 10%

Of course, each type of credit rating will have a slightly different algorithm. But, you should hold these rating factors as the most important variables. Focus on avoiding delinquencies or worse, and start bringing your total debt down.

Hint: pay revolving debt first. Your installment debts (such as student loans) do not count toward your utilization ratio.

Which Credit or FICO Scores Do Lenders Use?

FICO offers 28 main score versions to each of the three major credit bureaus. It provides a scoring algorithm for these bureaus to determine a FICO score to assign to each file. With the help of FICO, every credit bureau also has an in-house scoring model. They are as follows: BEACON (Equifax), FICO Risk Score (Experian) and Empirica (TransUnion).

A lender will decide on which credit bureau to pull your file from. That bureau will dictate the score that is provided – based on the type of account you wish to open. This means your score could vary for a car loan, home mortgage and so on.

Auto Score vs. Bankcard Score vs. FICO Score

There is an appropriate time for a lender to use each type of score. FICO Score 8 is the most generally accepted model between borrowers and lenders. Older FICO score versions are regularly used and more common in the mortgage market. FICO Auto Score is the go-to score when qualifying an applicant for an auto loan, and Bankcard Score is used to measure the worthiness of credit card applicants.

FICO Scores Used by Auto Lenders

FICO Auto Score is most common, but the version each bureau uses will differ. Equifax typically supplies FICO Auto Score 5 or 8. Experian uses Auto Score 2 or 8. Meanwhile, TransUnion falls to Auto Score 4 and 8. Since the FICO Auto Score 9 recently came into being, it might start gaining traction with any or all of the credit bureaus soon.

FICO Scores Used by Credit Card Issuers

FICO Bankcard Score 2 and 8, and FICO Score 3, are all sometimes pulled for the purpose of making credit card lending decisions. FICO Bankcard Score 9 also now exists but is not yet commonplace. The Bankcard Score focuses more on your credit card history and less on your medical debts, utility bills and any one-off missed payments.

FICO Scores Used by Home Loan Providers

A mortgage broker or private lender will typically use a dated FICO Score. This is because the underwriting rules for the U.S. mortgage industry require the use of older versions. As such, Equifax uses FICO Score 2, Experian uses FICO Score 5, and TransUnion uses FICO Score 4 to qualify mortgage applicants.

Even after reading about scores here, you no doubt have some questions. A good way to gain more knowledge is by reading the informative content on myFICO.com’s website. This will give you a better idea on how the credit rankers run things, too.

Credit Report Mystery

Reading and Understanding Your Credit Report

Confusion forms when you first look at your credit report. It is hard to know what is there, what is not and how things got there in the first place. But, this foggy way of thinking clears up once you get a good grasp of basic credit report terms. Below are some things you might find in your file:

Default

After you fail to pay, it will say you are in default on your debt. This happens after you fail to repay as scheduled. With credit cards, a default is usually reported after you go 90 days without making any payments. The default status will stay on your credit report for six years before it drops off.

Derogatory

A derogatory mark means only that the item is a negative one. It usually implies a late payment, charge-off or court judgment against you. It serves as a warning from a scorned lender and symbolizes a lack of creditworthiness. The derogatory status can stay on your report for up to seven years.

Satisfied

A satisfied item is anything that went into dispute with a creditor but is now fully resolved. As with all public record documents, a court judgment will stay in your file for seven years from the date you satisfy the debt.

Settled

A settled item is a debt that was in arrears but no longer exists because a settlement agreement was made between you and the creditor. This is a payoff that allows you to settle for less than what you actually owe – it is common when dealing with debt collectors since they pay pennies on the dollar to own the debt and will typically negotiate. Not paying the total amount back can harm your score, and the damage will stay on your file for seven years.

If you are a responsible borrower, the positive terms you might see include “Pays As Agreed” or “Paid/Closed Never Late.” Additionally, when you start running late on your payments, you might see 60 Days Past Due or 120 Days Past Due on your report.

What Else Your Credit Report Tells You

Your credit report contains many other pieces of information aside from the current account status for each debt. Take a look below to better understand what all is on your credit report and how to read it.

Personal Information

Your credit report will provide personal information, including your full name, where you live, your place of employment and your Social Security number. This data is gathered from the various accounts you hold that are being reported to the credit bureaus. A credit report will get an update to its information any time an account is updated. It can mix up information at times if your accounts are not up-to-date, so keep that in mind.

Soft / Hard Inquiries

Any time a lender pulls your file, it will result in an inquiry. This inquiry can be either soft or hard, with the latter having a short-term negative impact on your score. Soft inquiries mostly occur when employers run a background check for employment purposes. Many lenders will also perform a soft pull of your credit report to see if you pre-qualify for one of their offers before sending it to you.

Hard inquiries occur when lenders determine your creditworthiness at your request. A hard pull can drop your score a few points but will drop off of your report two years after it posts.

Public Record and Collections

Your credit report will include any public records in your name, such as bankruptcies, court judgments, foreclosures, lawsuits, wage garnishments and tax liens. The length of time these entries stay on your reports is variable. A civil judgment will last for seven years. Meanwhile, tax liens are very dangerous – they drop off seven years after the paid date, but leaving them unpaid can plague your file for 15 long years.

Credit Errors

 

Tackling Your Credit Report – and the Errors!

You have a credit report on file at Equifax, Experian and TransUnion. Each bureau accepts information from credit reporting companies. The creditors submit details to one, two or all of the major bureaus. Thus, it is possible for your reports to contain inconsistent information.

Some lenders will pull from one credit bureau only. This means your chance to qualify for credit comes down to which bureau they choose. So, it is important to make sure your information is accurate. You also need to make sure that all your accounts show up on each of your reports.

Boost Your Score by Fixing Credit Report Errors

Did you know that the FTC’s 2015 follow-up study on credit report accuracy found that roughly 20 percent of subjects saw a credit score increase after fixing errors found on their reports? This news came after discovering that 20 percent of credit reports contain at least one inaccuracy.

These errors are often little details that get mixed up. This typically happens when lenders only report to one of the credit bureaus. The missing pieces of your payment history can make or break your credit score. Furthermore, having only part of your debt in each file will result in an inaccurate calculation of your credit utilization rate – for better or worse.

Credit Report Errors Worth Disputing

The hardest thing to decide is whether you should report an error or not. It is not wise to ignore anything that is incorrect, but many issues will not impact your score. Little discrepancies in your personal information, for example, will not lead to a points boost.

The best time to report an error is when you see a major issue. If something is literally holding your score down, then you should report it. Even as little as 25 points can influence how you are able to build your credit. Imagine a few unjust rejections as you apply for loans and credit cards – these further drop your score. Ultimately, you look like a less reliable borrower than you really are.

Here are the errors that can impact your FICO score the most:

  • Letting an account enter Collections status = up to 100 points
  • 30 days delinquent on a bank card debt = up to 100 points lost
  • Missing a single credit account = up to 100 points difference by file

Understand that if you have an error causing a 100-point difference, it is severely holding you back. Going from a 780 to 680 score alone can result in more than $450 annually spent on extra interest. Take advantage of the chance to improve your score whenever you can. However, make sure not to fabricate errors or exaggerate issues to get bad debts removed.

How to Find Errors on Your Credit Report

First, simultaneously obtain current copies of your credit reports from the big three credit agencies. Then, you can compare the data and determine where any inconsistencies lie. This will be effective for picking up on most or all errors, but further review may still be still necessary.

One thing to watch for is debt that gets sold and resold. The information can change with time, and even the amount owing might be different. Any discrepancies may be grounds for removal of the entry.

This can bring your score up, but, how much will it increase? Four in every 1,000 reports with errors will see a change of as many as 100 points. This is a staggering statistic, but you should look at the stats affecting the majority. Five percent of erroneous credit reports contain inaccuracies of 25 points or more.

It is free to dispute credit reporting errors. Do this if you find anything in your file to be unfair or unjustified. Your credit score will improve after the errors are removed. However, make sure to only report true inaccuracies; if the debt reappears, your score boost will reverse itself fast.

Step-by-Step Credit Report Error Guide

So, have you come to the decision that reporting your errors is the right thing to do? It can make a major difference and aid you in your journey to rebuild your FICO score. With that said, you will only get good results if you follow the proper protocols.

Here’s how you can go about reporting errors in your credit file:

Contact the Credit Bureau

Reach out to the credit bureau to report your claim with a dispute letter. Be respectful, and provide all evidence you have to back up the fact that an item should be removed. If the information is inaccurate with all three bureaus, make sure to report the problem to each.

Wait to Hear Back

The company that reported the debt will have a short period to dispute your claim. This is when any information against you can come into play. After that, the dispute can go into mediation for a final judgment. Typically, you will hear back from the creditor within 30 days.

Usually, the judgment will be completed within this short time frame. In difficult situations, though, it can run on for a few months or longer. Once all is over, your score will recalculate. However, it is important to note that the entries might drop off temporarily and return after evidence against you is found. So, if you report factually accurate entries, it could end up leaving you in a worse position later.

What if You’re the Victim of Identity Theft?

This is an entirely different situation, but the process for handling identity theft is somewhat similar to reporting other issues. You must contact the credit bureau(s) with your claim. However, to be better prepared, a copy of your FTC Affidavit should be supplied. You can also use this to obtain a police report at your local police station.

Supplying all this information, along with your proof, will be adequate. From there, you will wait for a reply and see if any further documents are needed. Identity theft entries can damage your score drastically, and they should be reported as soon as you notice them.

Furthermore, it is important to watch out for identity theft all the time. This issue hurts many Americans every year, and there are endless ways for fraudsters to target you. There are many free identity theft protection services that work wonders.

If you believe you are the victim of identity theft and have contacted the credit bureau, you will also receive a fraud alert on your credit report. This lets lenders know to be careful when dealing with someone who connects to your file.

Read the FTC’s Disputing Errors on Credit Reports to learn the entire process.

Credit-Related FAQs

You should have a clearer view now of how credit works, but here’s extra info (and reminders) to help you out!

1. Do Lenders Report to ALL Credit Bureaus?

A lender can post information to one or all of the major credit bureaus, which are Equifax, Experian and TransUnion. This data will calculate into your FICO score. Eventually, a lender will use your credit rating to determine your loan eligibility. Your reports can get mixed up and have varying scores, which can result in unjust denials of credit.

2. How Do Credit Bureaus Collect Personal Data?

Information like your current employer and physical address can come from your credit card issuer, your loan provider or your utility provider. These data points are put in your file on a somewhat regular basis – monthly, quarterly, etc. This gives the bureaus what they need to try and keep your personal information up-to-date.

3. How Do You Get a Copy of Your Credit Report?

Go to www.AnnualCreditReport.com to make a request online. This is a service that allows U.S. citizens to request a free credit report from Equifax, Experian and TransUnion. You can pull your reports once a year, and per the FACT Act, it is your legal entitlement. You may view the reports online or request that printed copies be mailed to you. However, keep in mind that this will only get you copies of your reports – and not the associated credit scores.

4. How Often Should You Check Your Credit Report?

You should always stay up-to-date with what posts to your credit report at each of the major credit bureaus. Spread things out, and check one of your files every four months. Alternatively, a free or affordable credit monitoring service can help you keep tabs on things.

5. Can You Find Out Which Score a Lender Will Use?

Thanks to the FCRA Act, a lender must include “the range of possible credit scores under the model used to generate the credit score.” This means you will know whichever credit ratings a prospective lender receives. Not only that, but you will also be told the type (version) of FICO score that was pulled for your application.

6. How Long Does Stuff Last on Your Credit Report?

  • Unpaid tax liens: Up to 15 years from the filing date
  • Bankruptcies: 10 years – possibly seven years if you get a Chapter 13 discharge
  • Tax liens: Seven years from the filing date
  • Collection accounts: Seven years + 180 days from the first month’s missed payment
  • Foreclosure: Seven years after the date of your foreclosure
  • Late payments: Seven years after the date of the payment delinquency
  • Charge-offs: Seven years after the date your debt is written off as a loss
  • Soft inquiries: Two years from the date of the inquiry
  • Hard inquiries: One year from the date of the inquiry

Sources:

https://blog.creditkarma.com/personal-finance/how-much-do-americans-really-know-about-credit/

http://www.myfico.com/crediteducation/credit-score.aspx

http://www.myfico.com/

https://www.ftc.gov/news-events/press-releases/2015/01/ftc-issues-follow-study-credit-report-accuracy

https://www.ftc.gov/news-events/press-releases/2013/02/ftc-study-five-percent-consumers-had-errors-their-credit-reports

https://www.consumer.ftc.gov/articles/0151-disputing-errors-credit-reports

Who is the real thief when it comes to identity theft protection?

By | Credit Repair, Credit Scores

identity-theft-culpritNo one wants to fall victim to identity theft. According to the Federal Trade Commission, this crime has been first and foremost on consumers’ minds for nearly 15 years. In fact, many will do just about anything to arm themselves, even if it means dipping into the monetary assets they long to protect to pay for potentially ineffective identity theft coverage.

Protection inspection

For an average annual fee of $25-$60, identity theft insurance can offer anything from credit alerts and account/credit monitoring, to reimbursement of fees associated with credit repair for identity theft victims. Note the word victims. That means, insurance does not protect you from the act of falling victim to identity theft—nor does it reimburse you for your monetary losses once the damage is done.

Deal or no deal?

According to the National Association of Insurance Commissioners, benefit limits on identity theft insurance policies usually range from $10,000 – $15,000 yet customers must pay a deductible of $100 – $500 to restore tarnished credit scores. But, if you skipped identity theft coverage and used a credit monitoring service, you would only pay approximately $10 a month, sans deductible, to receive similar alerts that can enable you to put a freeze on your accounts if needed to avoid identity theft in the first place.

If you want something done right, DIY

If you choose to forego identity theft insurance, there are some safety measures you can take to protect yourself. To monitor ID security, set up a post office box in a different zip code other than your own. Once established, use the box office as your tax mailing address and have your auto insurance, vehicle registration information, and credit card statements sent there. This way if your wallet is stolen, the thief won’t know the zip code associated with the credit card (which is typically requested on high-price purchases).

Safety net

Even by taking the right steps, you may still find yourself in a predicament where your credit score has been compromised. If you need credit repair, seek advice from an industry leader such as Ovation. Each of our knowledgeable representatives will work with you personally to build a credit repair and credit re-establishment plan that is tailored solely for your situation. Your path to debt-free, stress-free credit repair begins with a phone call for a free consultation.

Tax Identity Theft: What it Is and How to Protect Yourself

By | Credit Repair, Fraud Protection

The sheer thought of identity theft is frightening. Tax identity theft, in particular, is increasingly popular and becoming a growing problem. According to an IRS watchdog, in 2013, more Americans’ identities were stolen in tax refund crimes in the first six months of the year than in all of 2012. It is estimated that 1.2 million taxpayers were victims of tax identity theft last year.

Tax identity theft defined

Tax identity theft occurs when someone else uses your social security number to obtain a tax refund or to get a job.

Uncovering tax identity theft

You are more than likely a victim of tax identity theft if you receive a notice from the IRS stating you earned wages from an employer you don’t recognize or if more than one tax return was filed using your SSN.

The effects

If someone falsely uses your SSN to report wages before you do, they may receive your refund first. When you file your return at a later date, you will receive notification from the IRS that more than one return was filed for you. If someone falsely uses your SSN to get a job, then that employer will likely report that person’s earnings to the IRS using your SSN. After you file, you will then receive a notice from the IRS stating that you did not report all of your earnings. The IRS doesn’t know that you don’t recognize this false employer.

Repairing the damage

If you receive a notice from the IRS stating that more than one return was filed under your SSN, or that you did not report all of your wages, it is critical you contact the IRS immediately because you may be a victim of tax identity theft.

The IRS employs specialists who will work with you to file your appropriate return, get  you a correct refund, and protect your account in the future. You should also file a police report to report the fraud. Finally, you need to send a copy of your police report to the IRS Identity Protection Specialized Unit along with proof of your identity. It’s also important to keep track of the dates you made calls to the IRS and sent letters. You should always keep copies in your files for your reference.

Protect yourself and stay educated

Once you have contacted the IRS, it’s important that you take additional steps to minimize any potential damage. You should order credit reports and set up fraud alerts with all major credit reporting agencies. You should also file an identity theft complaint with the Federal Trade Commission. It’s important to stay educated on how to protect yourself and to tell your friends and family. Tax Identity can happen to anyone. To help raise awareness, the FTC instituted a national Tax Identity Theft Awareness Week, January 13 – 17, to raise awareness about this crime and to educate consumers.

Tax identity theft can cause multiple problems for you aside from your taxes. If your credit is ever damaged as a result of tax identity theft, you should consider credit repair solutions.  Let us at Ovation help you. We offer a wide range of credit repair solutions that are customized to meet your unique needs.

Contact us today to see how we can help.

 

Credit Reports, Credit Cards and Identity Theft

By | Credit Cards, Credit Reports

With annual cases now exceeding 10 million people, identity theft is a growing problem. It can be a shock when it happens, but your best defense could be a good offense – by proactively monitoring your information and guarding your most personal details. So when it comes to your identity, how does the theft happen?

This is part 1 of a series we are writing on identity theft. In future installments, we will look at some ways to safeguard yourself and smart steps you can take to prevent this ever from happening. But first, let’s look at what identity theft is, some common schemes that thieves use, and the impacts they can have on you.

When you think about it, signing up for a credit card is pretty simple. It usually takes only a few minutes. Unfortunately, that very convenience makes it easy for thieves to get away with financial fraud. A dishonest person can glean most of the details they need in just two minutes alone with your wallet. If they can see your driver’s license and social security card, they’ve got your birth date, mailing address, and SSN; which is more than enough to begin the process of identity theft.

But, you say, nobody’s seen your wallet. Today, thieves have gotten more sophisticated. For example, let’s pretend you placed a non-shredded, intact credit card offer in your garbage can. Someone could grab it, open the letter, fill it out (in your name) and even file a change of address form for the statements. While the thief has gone on a shopping spree, you would never see the bill, since it would be diverted to the new fake address. It’s not your fault, but you can’t cancel what you don’t know exists.

It may take years for the described fraud to come to your attention. By that time, a small crime could have snowballed into a major problem. Since you would be a victim of fraud, in theory, your credit score should not be harmed. But that doesn’t take into consideration the frustration, wasted time and hard work of ironing out the mess.

The best option is to prevent identity theft from ever happening. With good common sense and judicious monitoring, you can dramatically cut your chances of ever being a victim. In future postings, we will get into some of the smart ways you can protect yourself to prevent all of the above from ever happening.

If you have been the victim of identity theft and had your credit tarnished, Ovation can help. Contact us today to explain your situation and get advice from our experts. Call us at (866) 639-3426 to start repairing your credit.

 

How Many Credit Cards Should I Have?

By | Credit Cards


Credit cards are not inherently evil. People can have equally good (or bad) credit scores, no matter how many credit cards they have in their wallet. Credit cards don’t get people into debt, people get themselves into debt. However, how you use your credit card(s) can drastically affect your credit score.

There are some basics about how best to use credit cards. If you can master these guidelines for using your existing cards, then adding more may be beneficial. If maintaining these guidelines with the couple of cards you have is difficult, then you’re probably better off declining any future credit card offers.

Using Too Much Credit

One of the biggest problems with having several credit cards is that too much of your available credit is being used at any one time.  This can negatively affect your credit score. Credit cards with high balances drop your credit score. Thirty-percent of your FICO (credit) score is determined by how much of your available credit you are using. If you have nearly maxed-out all your cards – that’s bad. While using only 10% of your credit limit is good. This “credit utilization ratio” is calculated by looking at your total available credit across multiple cards. So, if you are disciplined and know how to keep your balances low and make your payments on time, a new card that boosts your available credit could be beneficial to your score. A good bit of advice is to have no more than 3-4 credit cards at any time.  This will allow you to keep track of your balances and available credit.

Payment History

Even more important than your credit utilization ratio, is your ability to pay your bills – that includes credit cards – on time. Payment history accounts for 35% of your credit score. It won’t matter that you have ten cards, all with low balances if your credit card bills are never paid on time. Opening a new card to improve your credit utilization ratio will be useless if you forget to pay the bill.

Cleaning House

You can’t clean-out your wallet the same way you clean-out your closet. Just because a card is old or hasn’t been used in the past year does not mean that it should be trashed in favor of a brand new card. Lenders and the credit bureau take comfort in seeing someone who can maintain an account for a long period of time. If you’ve managed a credit card properly (keeping the balance low and paying on time), you want to keep that card for as long as possible. In fact, the longer you can keep a card, the better.

Ready to Juggle?

If you read the above credit cards tips and thought “Who doesn’t know that?”, you might be ready to juggle and successfully manage multiple credit cards. But before you embark on an application spree, here are some words of caution.

  • Don’t apply for multiple cards all at once. Even if you are stellar at managing multiple payment schedules, your credit score takes a hit every time you apply for credit. Multiple inquiries for your credit report reflect negatively because it looks like you’re desperate for money.
  • Don’t be surprised if your credit card portfolio scares lenders. Even though your credit score is in good shape, lenders might not like the idea of you having access to so much credit – especially if you have a short credit history. Lenders may worry that you will max out your cards and possibly default on your loan.
  • Don’t ignore your statements. You may have paying bills down to a science – but simply paying your cards based on the calendar and saving receipts could get you into trouble. Having multiple cards makes you more vulnerable for identity theft. If you ignore your statements for a couple of months because you haven’t used the card – fraudulent expenses could be going unchecked.

As with anything related to your credit score, the best thing you can do is pay your bills on time. If you feel that you have more cards than you can handle and payments are getting missed, consider closing some of the newest accounts or the accounts with the lower credit limits – this will simplify your payment schedule without sacrificing your credit history or your credit utilization ratio.

What to Do When a Company You Do Business with Has a Security Breach

By | Ask a Credit Expert, Fraud Protection

The cleverness of the criminal mind never ceases to amaze. Recently, it was reported that thieves targeted Barnes & Noble, stealing consumer credit card data by rigging the POS PIN pads (the machine where you swipe your card to pay for your purchases) at more than 60 stores across the country.

If you shopped at one of the affected Barnes & Nobles stores, your credit card data, and even your identity, might be at risk for theft. Barnes & Nobles is only one of many companies to have had a data security breach, putting consumer credit card data at risk of theft. The question is: What do you do to protect yourself after the fact?

Carefully review your credit card statement every month

When your credit card statement becomes available, carefully review it to make sure the information on the statement matches the purchases you actually made. Better yet, if you have online access to your credit card accounts, don’t wait for the statement. Log in right now to review recent purchases and make sure all of them are legitimate.

Monitor your credit card usage going forward

Check your credit card usage regularly, and if you have a PIN associated with the account (a debit card or a credit card that allows you to obtain cash using a personal identification number), change that PIN with your credit card company right now. You should also (whether or not your account has been compromised) change the passwords you use to access your online billing regularly. Secure passwords should contain a combination of uppercase and lowercase letters, numbers and special symbols.

Request a copy of your credit report

It is a good idea to review your credit report regularly anyway, but any time you’ve conducted business with a company that has experienced a security breach, you should request a copy of your credit report from each of the three major credit reporting agencies, to make sure there is no fraudulent activity. If you are a victim of identity theft, report it to the police immediately.

Managing your credit reputation requires taking a proactive approach, to minimize potential risk. Ovation can help; contact us today for a free consultation.

What Do I Do If My Identity Is Stolen?

By | Credit Repair, Fraud Protection, Your Credit

In the realm of science fiction and as a device in slapstick comedy, identity swaps often lead to hilarious adventures and comical misunderstandings. The humor in mistaken identity is a common plot element, even appearing in the works of Shakespeare. In the modern world of credit cards and digital money, however, the loss of or change in your identity is nothing to laugh about.

A stolen identity can encompass much more than just a stolen credit card. Identity theft includes personal information such as your name, address, and social security number, which allows another individual to make purchases or open accounts in your name. This is a serious crime, and it should be reported as soon as possible (even if it is a relative).

The first thing to do is to call the police, and file a report. Next, place fraud alerts on your credit reports by notifying all three major credit bureaus: Experian, Equifax, and TransUnion. Each of these bureaus will request a copy of the police report; you should in turn request a copy of your credit report. Review your credit reports thoroughly, because it is important to identify which actions are your own and which are those of an imposter. By logging all your recent activity, you can successfully track what has been stolen from you. The credit bureaus can put a lock on your account, to prevent any further credit from being issued.

The next step is to close or change all of your accounts, in order to effectively lock out the individual who may be responsible. Contact each of your credit card companies, your bank and other lenders to let them know about the situation. This helps to ensure that the thief can no longer use your identity.  The last step is to file a complaint with the Federal Trade Commission (FTC). The FTC employs nationwide resources to track down those who commit identify theft and works to help those who are victims of this callous crime.

Identity theft can effectively ruin your credit, and although the issue can be resolved, it is certainly not a pleasant experience. Take measures to protect yourself against identity theft by paying close attention to your credit affairs. If you are getting phone calls from debtors about items you never purchased or offers for credit cards that you never applied for, it might be a sign that someone has hacked into your life. Do not hesitate to investigate your credit, if you feel something is awry. Legally, credit bureaus are required to provide one free credit report per year upon request. Additionally, the credit bureaus also have to give you a free report if you feel you are a victim of identity theft. When it comes to identity theft, it’s better to be safe than sorry.

How To Handle Domestic Fraud

By | Ask a Credit Expert, Credit Laws, Fraud Protection

You hear about identity theft all the time. There seems to be tons of stories in the news these days about someone hacking into a business and stealing data on customers or their credit card numbers. It’s easy to know what to do when a stranger steals your information and commits fraud, but fraud can also be committed against you by someone you know.  It might sound more like something that happens in a movie, but maybe your brother-in-law dug that pre-approved credit card application that came in the mail out of your trash and helped himself to your better credit and opened the account.

At Ovation, we’ve seen it all – from clients whose family members have opened cable accounts and cell phones in their names without their knowledge to family members who rack up thousands of dollars in credit debt. Until you get a bill for a line of credit or a service you never opened, or you see a delinquent account on your credit report, you may never even know they’ve done it.

When a stranger commits identity theft, there is no hesitation about phoning the police and filing a police report (the surest way to protect your credit). With domestic fraud, it’s not always that easy to call and turn in your brother, mother, or nephew. Sometimes, you can handle the fraud privately between you and the family member responsible. Try talking with that person to see if you can work out a way to repay the debt that resolves the problem without impacting your credit score or sending your loved one to jail.

While some creditors may not even ask you who committed the fraud or care if you do know who was responsible, it’s likely they’ll ask for a police report. Generally it makes it easier to prove fraud if there’s a police report, but we understand it can be hard to file one against a relative, even if they are that black sheep of the family who always seems to be looking for a free ride at everybody else’s expense.

If the “figure it out between us” approach doesn’t work, you may be left with no choice other than reporting the abuse.  You can try to handle the debt yourself, and you may have the resources to do this, but if you don’t and you end up with a delinquent account on your credit report, then you’ll need to consider calling the credit bureau and telling them that the negative account on your credit report is the result of fraud. No matter who committed the fraud – friend or stranger – you have the right to dispute the charges and repair your credit score.

What To Shred – Reduce the Risk of Identity Theft

By | Ask a Credit Expert, Credit Cards, Credit Scores, Fraud Protection

Eleven million people a year and 54 billion dollars. That’s the hit that identity theft puts on us. And it’s mostly avoidable. How? Well, you can toss your personal and financial information in the trash and hope no one digs through it, or you can shred. But why take the chance? Thieves think nothing of rummaging through trash looking for valuable information. When they find yours, they’ll have everything they need to live their life on your dime. Shred and you cut them out of the picture. And you stay out of that statistic.

It only takes a few minutes a day to sort your discards. Set aside the documentation you should not shred such as recent tax information, and shred the items that contain potentially harmful information. Not sure what they are? It’s a fairly short list. Here’s ours.

Old Tax Returns. They contain your name, address, social security number, income, and your children’s names and social security numbers. The kids may not be eighteen yet, but people can still try and get credit in their name. Just be sure that you keep the most recent seven returns though, in case you get audited.

Credit card offers. You don’t want to leave them lying around and you don’t want to throw them in the trash. You never know when someone might see them and decide “Oh, I’m going to go get a credit card and they’re not going to know.” You will, when it’s too late.

Pay stubs. They have your name, social security number, address, salary and deduction information, and all kinds of employer information on it. So you definitely want to shred pay stubs.

Convenience checks. Let’s say you receive some from your credit card company, rip them in half and threw them in the trash. Then someone comes along, sees them, tapes them back together, fills them out, and sends them in. Yes, they could be honored even after being torn in half. You’ve just paid off their credit cards and added to yours.

Bank statements. They have your account number, name, address, and account balances on them. Even better than shredding is to go paperless with on-line banking.

Canceled checks. A lot of people think, “Oh, I wrote void on it, no big deal.” But it still has your routing and account number on it.

Canceled credit cards. Always shred a canceled debit or a credit card that so that no one can get the number. It’s a part of your credit history that could help a thief “prove” they’re you.

Outdated IDs. Items such as old college IDs, security badges, employee name tags, and photo IDs could be of value to a thief. There might be information on them that ends up on a fake ID. Shred them.

What Do Spielberg, Nimoy, and DeVito Have In Common?

By | Ask a Credit Expert, Consumer Rights, Credit Repair, Fraud Protection

Sorry to disappoint, but there’s no movie in the works. But Stephen Spielberg, Leonard Nimoy and Danny DeVito have more in common than you might think: They have all been victims of identity theft.

James Rinaldo Jackson enjoyed a spurious lifestyle by stealing the identities of these famous individuals. Jackson became privy to their most intimate information including social security numbers, bank and credit card statements and even credit reports.

The former identity thief describes his wicked gift in his book, “Your Evil Twin.” When recounting his misadventures Jackson said, “It is very easy to be anyone you please, on any given morning you awake.”  Jackson, who was quite good at thieving identities, has since gone straight. However, don’t take comfort in the fact that he is off the job or that when he was in the identity theft business he targeted the rich and famous.  Though Jackson has turned over a new leaf, there are countless criminals who would rather steal your identity than create a financial identity of their own.

Identity theft occurs when personal identifying information is accessed, without permission, and used to commit a crime. Stealing the information in the first place is criminal and the Federal Trade Commission indicates that at least nine million Americans are victimized each year. The sad fact is most of these people will not realize the violation until their credit report or credit score is negatively affected and they are turned down when applying for credit. Then where to turn?

The first thing a victim of identity theft should do is to file a police report. With the police report in hand, you can go back to lenders, requesting the account be closed as fraud and to write off the debt so that you’re not responsible. Go through reports of all three credit-reporting agencies with a fine toothed comb. It is extremely important to move as much damage away from your credit as possible. Many lenders will provide a fraud affidavit – a notarized form – which indicates you had nothing to do with the fraudulent account.

Figure out the extent of the theft – whether, for example, your social security number has been compromised. Monitoring programs that are in place for monitoring your credit reports can help you. Placing a fraud alert on your credit report will necessitate that the creditor contact you before any credit in your name is approved.  It will also assist you while cleaning up the mess left behind by the identity thief. There may be a number of accounts to dispute and a copy of the notarized affidavit and police report will go a long way as documented proof of innocence.

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