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"Given that credit scoring is based on proprietary statistical models, there's little hope that consumers will ever fully understand why they've been allocated one score over another. “It's far too complex and confusing for consumers. It's just very, very difficult to know what you should do,” said Gerri Detweiler, author of The Ultimate Credit Handbook and founder of DebtConsolidationRx.com. “Part of the problem is there's just so much information being put into and coming out of credit reports. It's getting harder than ever to stay on top of it, but if you don't, you end up really paying the price,” she said. A steep price: A consumer scoring 600 pays about $300 more per month on a $150,000 mortgage, or almost $108,000 over the life of a 30-year fixed-rate mortgage versus someone logging an 800, according to the MyFico.com calculator. “The irony is, the higher your score, the farther you can fall,” said Craig Watts, spokesman at Fair Isaac, creator of the FICO score. One late payment could push an 800 down to 640. When someone with an 800 “stumbles for the first time it puts them in such a different pool of consumers their credit risk increases hugely,” Watts said. That consumer is “much more likely to run into problems than they were before they encountered that single (late) payment. In order to reflect that change in their risk, the score drops precipitously,” he said. Given the degree to which scores affect your financial life, consider the following ways to push your score higher. 1. Ensure lenders are reporting your credit card limits. 2. Pay down a home equity line of credit. 3. Request good credit history on your report. 4. Be wary about moving to a new “credit scorecard.” 5. Ask about the date of last activity. 6. Remove duplicate data. 7. Consider credit rescoring through a mortgage lender. 8. Don't close old accounts. 9. Keep revolving-account balances low. 10. Don't open too many credit lines. Read the full article on KansasCity.com (registration req.)
"Barbara Haviluk says the call came out of nowhere. "Discover Card informed me that a person had all my information," she says. A thief had her mother's maiden name, her Social Security number and more. "It was like an out-of-body experience to realize that somebody could then use me for their financial gain." She's not alone. More than 5 million Americans have had their personal information lost or stolen in the last six months. Many don't realize there are things they can do to protect themselves.
- Experts say you can ask the credit reporting agencies for what's called a "fraud alert." Typically good for 90 days, they raise a red flag on any unusual credit activity.
- You can tell credit card companies to stop sending those convenience checks. They can be stolen from your mailbox.
- Consider using a P.O. box or perhaps buying a lockable mailbox for your home.
Back in California, Barbara Haviluk fought back with that state's credit-freeze law. Here's how it works: You send $10 to each of the three major credit reporting agencies — Equifax, Experian and Transunion — asking them to freeze access to your credit reports until you unfreeze them." Read More on MSNBC
"In the largest consumer information theft to date, shoe retailer DSW reports that 1.4 million customer records were stolen from 108 stores. DSW first reported an information breach in March, but estimates of the number of customers affected were far lower. Now they have revealed that 1.4 million customers were affected. In addition, transaction information involving 96,000 checks was taken. A DSW spokesperson said the customer information included credit card names and numbers, bank accounts and driver's license numbers. No customer addresses, PIN numbers or Social Security numbers were stolen. The theft is larger than the 1.2 million federal employee records reported lost by Bank of America late last year. The theft is only the latest in a series of database break-ins reported recently. ChoicePoint lost information on 200,000 current and former customers. At Boston College, a hacker made off with the addresses and Social Security numbers of 120,000 alumni. HSBC informed 180,000 of its credit card customers of a breach that could affect them. Last month, the London-based Reed Elsevier Group said criminals had breached its security and acquired 32,000 records. Only last week, Ameritrade warned 200,000 clients that a backup computer tape containing account information had been either lost or accidentally destroyed, even though a company spokesperson said the company did not believe foul play was involved. In the largest successful prosecution of consumer information theft in the US to date, Philip Cummings, formerly a help desk employee at Teledata Communications, was sentenced to 14 years in prison. The company he worked for provides banks and other credit providers with online access to credit reports. Mr. Cummings downloaded over 30,000 of those credit reports and sold them for $60 each. Criminals used the information to apply for credit cards, take out loans and drain bank accounts. The FBI estimates the take was between $50 million and $100 million. One of the victims was an elderly woman with a $1,000 savings account. After the thieves stole her identity, she was left with $35,000 in debt and nothing in her account. In Seattle, Gary Peter Williams, the ringleader of an identity-theft ring responsible for over $1 million in bank fraud, was sentenced to 136 months in prison plus five years of supervised release. He also was ordered to pay $856,878 in restitution. At sentencing, US District Judge Robert Lasnik said, "Identity theft is a scourge in this nation. Identity theft is like tossing a rock in a lake, the ripples go out causing problems for people far into the future." The news is catching the attention of consumers. In a survey taken in March 2005, 57% responded that they were either "very worried" or "moderately worried" about identity theft. The Senate Judiciary Committee is considering a bill that would require companies to notify consumers when personal-identity data has been compromised. The bill is based on California's Security Breach Information Act, which allows consumers to put a seven-year fraud alert on their credit reports. And the firebrand New York Attorney General, Eliot Spitzer, is weighing in. "New York State must enact reforms to strengthen consumers' ability to control personal information and to facilitate the prosecution of identity theft crimes," he stated. As Finextra.com reported: "In February, the Federal Identity Theft Data Clearinghouse reported that 38% of all fraud claims in 2004 related to identity theft, and New York State ranked seventh in the nation in per-capita identity theft reports." Currently, Colorado and Vermont are the only two states that haven't made identity theft a felony. According to the FTC, Colorado had the fifth-highest number of identity theft complaints last year per 100,000 people." Full Article on eMarketer.com
MSN Money reports on the average credit scores for 20 major U.S. cities. My city didn't make the cut, but if you live in one of those cites you can get an idea if you're surrounded by people with good credit scores or not (at least on an aggregate/average basis). Even if you're not in one of the top 20 cities, you can see how you stack up with your state's average credit score with the interactive map. According to this article, the average credit score for the entire is 676. Minneapolis tops the list with an average of 705 and Dallas comes in at the bottom with an average of 650. For overall state averages, South Dakota is #1 with an average credit score of 708, and Texas trails all states with an average of 650, just like the bottom city, Dallas. One kind of interesting thing to note if you look at the interactive map. Is it just me, or are all the lowest credit score states in the south? The states in the north have the highest average credit scores, and the states in the middle are right about in the middle. I wonder if there's a reason for that. It can't just be coincidence, could it? Read the article on MSN
"Americans seem to be concerned, but not outraged, by news in recent weeks that two big data collectors sold detailed personal information on nearly 500,000 people to buyers who had absolutely no business getting it. Maybe this is because we've become inured to the supposed inevitability of our personal data being available to anyone who looks hard enough. But it's time for some outrage -- and long past time for the legal system to hold the people who assemble this information without our knowledge or consent accountable for what happens to it. Given the current state of nonregulation of this industry, it's something of a wonder that we even know of the breaches. That we do is only because the California legislature passed a law in 2003 requiring companies to notify affected individuals of security compromises in computerized databases. BOGUS BUYERS. Being required to notify California residents, it was hard for data collectors ChoicePoint (CPS) and LexisNexis, a unit of Reed Elsevier (ENL), to hide the fact that they had improperly given out data on 145,000 and 310,000 individuals, respectively. Executives for LexisNexis and ChoicePoint told Congress during hearings held by the Senate Judiciary Committee on Apr. 13-14 that they would support a national disclosure law as long it prevented individual states from imposing even tougher requirements. They also apologized for the difficulties the breaches may have caused consumers. In considering what to do to protect this data, it's important to understand exactly what happened in these cases. There was no hacker attack and no breach of the technical security of databases, though both factors have figured in other data losses. ChoicePoint and LexisNexis are supposed to sell the data they collect only to qualified businesses or government agencies, but it turns out that they did a terrible job of assessing their customers' qualifications." Full Article from Businessweek Online/MSNBC
 "LANSING – Attorney General Mike Cox advised consumers today to order their free credit reports and carefully review all financial statements in the wake of recent nationwide security breaches involving consumers' personal information. Cox's warning follows today's reports in the media that HSBC, a financial institution, had sent 180,000 letters to consumers advising that their credit card information has been compromised. "Today’s announcement emphasizes how important it is for consumers to monitor not only their free credit reports but also their credit card bills, bank statements, and other financial reports," Cox said. "An educated consumer is an empowered consumer. Those consumers whose information is stolen will experience fewer problems the sooner they find out about any breach." Cox’s office is investigating today’s announcement from HSBC to determine how Michigan consumers may be affected and whether there have been any unnecessary delays in notifying consumers. Investigations into recent identity theft breaches by ChoicePoint, Lexis, and DSW are ongoing and Cox encourages consumers to report problems to his office. A comprehensive Consumer Alert, "Free Annual Credit Reports - What Consumers Should Know" and extensive information about preventing and reporting identity theft is available at the Attorney General's Web site, www.michigan.gov/ag. Consumers may also contact the Consumer Protection Division toll-free at 1-877-765-8388, or in writing at: Attorney General’s Office, Consumer Protection Division, P.O. Box 30213, Lansing, MI 48909."
"NEW YORK (CNN) - LexisNexis, which compiles and sells personal and financial data on U.S. consumers, said Tuesday that personal information on 310,000 people nationwide may have been stolen. That number is nearly 10 times higher than the figure LexisNexis disclosed last month when it first reported that its databases had been breached. LexisNexis said in March that 32,000 people had been potentially affected by the breaches. In a press release on its Web site, the company said it will notify an additional 278,000 individuals whose data may have been stolen, adding that it is working with law enforcement authorities to see if any of the stolen data has been misused. Letters will be sent this week to people who may have been affected by the security breach. To date, none of the individuals who were notified that some of their information was accessed last month have experienced any form of identity theft, according to the company." Full Article on CNN.com
"A month later and credit expert Thomas Urbaniak isn't so sure people get it. When the government rolled out its free credit report effort in March for Michigan residents, it was meant to empower U.S. citizens and help guard against identity theft. Under the federal Fair and Accurate Credit Transactions Act of 2003, consumers may order financial data from the three primary bureaus -- Equifax, Experian and TransUnion -- once a year for free. Urbaniak, office manager and a certified credit counselor at GreenPath Debt Solutions, 4600 Fashion Square in Saginaw Township, said many mid-Michigan residents walking through his doors are empty-handed. "A lot of people still don't know about it," he said. "For some reason, the word still needs to get out." Many clients who do pull their reports don't know how to interpret them, Urbaniak said. "There are old accounts listed that they paid off a long time ago, but they don't understand what they're looking at. "This is new, and it will take time, so people will get better at reading them, and we can help." It's difficult for Urbaniak to dole out general advice, he said, because each case varies. Another problem he encounters are consumers who prefer to just "stick their heads in the sand." "They're afraid and don't want to know," he said. "Forgetting about the report and letting go isn't the answer." Federal Trade Commission spokeswoman Jen Schwartzman agrees. She couldn't provide statistics on how many Michigan residents have taken advantage of the program. However, she also said there are some out there confused. For instance, a number of novice Internet users have mistakenly clicked on advertisements that charge fees for credit reports on the government's Web site. "Some people who don't use the Internet all the time are having a little trouble," Schwartzman said." Full Article from Mlive.com
Apparently Choicepoint is devoping a system to let people access their own personal information that is sold to various entities: "LOS ANGELES — An executive of embattled data broker ChoicePoint Inc. said the company is developing a system that would allow people to review their personal information that is sold to law enforcement agencies, employers, landlords and businesses. "You will receive the reports that we have on you," Don McGuffey, the firm's vice president for data acquisition, told the state Senate's Banking, Finance and Insurance Committee in Sacramento on Wednesday. ChoicePoint's announcement comes a month after it disclosed that thieves used previously stolen identities to create what appeared to be legitimate businesses seeking personal records. The bandits, who operated undetected for more than a year, opened 50 accounts and received vast amounts of data on consumers, including their credit reports." More from Modesto Bee
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