Credit & Identity Theft


Credit Report

What is a credit report?

  • A  credit report provides you with all of the information in your credit file (“credit history”)maintained by a credit bureau that is provided about you by a third party, such as a lender. Generally, a credit report will reflect your credit pattern of behavior for a period of seven years. A credit report will also include information on everyone who has received a report about you from the reporting company within a certain period of time, depending on the bureau (“inquiries”).
     
  • There are 3 credit bureaus in this country, Equifax, Experian, and TransUnion. You may request a free report once every 12 months from each of the three bureaus.
     
  • Adopt a review system that staggers reviewing one report every four months (i.e. January, May, and September). Bundling the reports and reviewing them on the same day restricts your free access for twelve months.

How do you request a credit report?

  • The best way to request a FREE credit report is through www.annualcreditreport.com. The 3 credit bureaus links are contained on this website.  You can also request a free annual credit report by phone or mail and it will be mailed within 15 days.
     
  • Requesting a credit score involves a nominal processing fee and is not necessary every time you request a credit report.

Is a credit report the same as a credit score?

  • No. A credit score is a number that reflect your credit risk level, with a higher number indicating lower risk.  It is generated through statistical models using elements from your credit report. For example, payment updates or a new account could cause your score to fluctuate.  As well, many different credit scores are used by the financial services industry.  Your score may be different from lender to lender or from car loan to mortgage loan depending on the type of credit scoring model used.
  • It’s important to note that even though your score changes as your credit report changes, each bureau may have a different credit score for you.  This is due to the fact that there are more than 1,000 proprietary formulas being used to calculate credit scores.
     
  • It is not uncommon for college graduates with long-term student loan debt for their credit score to decrease when the loans become active debt after the deferment period ends.

A credit report is not the same as a credit score as it shows your credit history and how financially responsible you are.

Why are credit reports and credit scores used?

  • Credit reports help a credit grantor decide whether to grant you credit based on your credit payment history. If a lender finds what it considers excessive inquiries, it may reject your credit application.  Lenders are free to determine their own guidelines for what constitutes excessive inquiries. Don’t give out your credit information unless you are ready to apply for credit. 
     
  • Credit scores help lenders assess risk more fairly because they are consistent and objective.  Consumers also benefit from this method.  No matter who you are as a person, your credit score only reflects your likelihood to repay debt responsibly, based on your past credit history and current credit status.

low to high credit scale

A higher credit Visual score means a lower interest rate. For a $20,000 car loan, with a low credit score of 500-589 you would pay around $9,000 in interest as compared to a score of 720-850 and a total of only $1,699 in interest. A credit score is made up of 10% type of credit, 10% new credit, 15% credit history, 30% amount owed, and 35% payment history

Credit Score

FICOTM is an acronym for the Fair Isaac Corporation and refers to the credit scoring system used in more than 90% of lending decisions in the United States. The FICO score is calculated by applying statistical methods, developed by the corporation, to gather information on one’s credit file.  To learn more about the FICOTM scoring system go to www.myfico.com.

Your Credit and You

Articles on Credit/Finance Management

What is Identity Theft?

Identity theft, as defined by the Federal Trade Commission (FTC), occurs when “someone steals your personal information and uses it without your permission. Damaging your finances, credit history and reputation”.

How Can I Prevent Identity Theft?

Review your credit report, look for any irregularities and report them as soon as possible. You are entitled to a free credit report every 12 months from https://www.annualcreditreport.com/ or by calling 1-877-322-8228. This is the only Government authorized website to provide consumers with a FREE annual credit report.

  • Stop pre-approved credit offers. Have your name removed from marketing lists. Call toll-free 1-888-567-8688 or online.
     
  • Respond quickly to notices from the Internal Revenue Service. If someone has used your Social Security number on a tax return, contact IRS’s Specialized Identity Theft Protection Unit 1-800-908-4490.
     
  • Read your bank, credit and account statements, and Explanation of Medical benefits. Look for changes you DID NOT make.
     
  • Keep your important papers secure. Lock up your financial documents and records.
     
  • Be careful with your email. Do not share passwords. Make sure to log out when leaving, especially when using a public computer in areas such as libraries, coffee houses, or public Wi-Fi areas.
     
  • Create strong passwords. Mix 10 or more letters, numbers and special characters.  DO NOT use the same password for more than one account.
     
  • Shred sensitive information. Identity thieves  get a hold of your information by “dumpster diving” and using the information they find to open credit cards or pay for purchases online. In order to protect yourself be sure to shred all documents before tossing them in the garbage.
     
  • Don’t overshare on social networking sites. Posting too much information about yourself on social networking sites makes it easy for identity thieves to find out detailed information about your life (birthdate, address, etc.). For tips on how to limit your online exposure visit the California Office of the Attorney General.
     
  • Protect your Debit Card and PIN. DO NOT share your PIN. Use credit instead of debit whenever possible. Only use bank's ATM’s and review your bank statements regularly. Be sure to report any transactions you do not recognize or ones that may look suspicious.

For more tips on keeping your identity safe visit the Federal Trade Commission’s website.

What If My Identity Has Been Stolen?

Visit https://www.identitytheft.gov/ to get a personal recovery plan. This a government website. They will walk you through the plan, help you track your progress, and assist you every step of the way.