The Credit Reporter

The Truth About Rewards Credit Cards

2008-06-03T12:54:00.002-06:00

Do rewards credit cards offer any real rewards? If you carry a balance, you are probably getting ripped off because you're paying out more in interest than you get back in rewards.

This article on Money offers some tips and advice on rewards credit cards

Changes to FICO Credit Scoring System

2007-08-02T13:45:00.000-06:00

From the Star Telegram:
In September, the FICO credit-scoring system is set to undergo a major overhaul. Fair Isaac Corp., the Minneapolis company that creates the formula used to calculate the score, is downplaying the change, saying that it won't have much of an effect.

But 40 of the top 50 financial institutions in the country rely on FICO scores to determine whether to approve a loan and what rate to charge. Retailers, landlords, insurance companies, employers and utilities also use it to decide how to do business with you -- or whether they should.

So any change in the way that scores are decided affects millions.

Because Fair Isaac doesn't want rivals to copy its formula, it isn't giving out too many details about the changes, but spokesman Chris Watts did say this: Fair Isaac divides the population into 10 segments based on credit history and applies a different formula to each. Eight segments include people with good credit, and two are for people with serious problems. Under the new system, the population will be divided into 12 segments: eight for people with good credit and four for people with bad credit. That could result in a slight change -- up or down -- in many scores.

Read Full Article

Getting your credit report isn't easy

2007-07-03T10:16:00.000-06:00

The way the system is supposed to work for getting a free credit report is not how it really works.

Yes, there is only one official Web site — annualcreditreport.com — and it provides a free copy of your credit report once every 12 months from each of three nationwide credit bureaus: Equifax, Experian and TransUnion.

But misspell that Web address or, worse, guess at its name on a Web search engine and you will wind up at sites offering a whole bunch of "free" stuff from credit scores to credit monitoring that ain't free.

Full article from the Houston Chronicle

Credit Report Forums Closed Indefinitely

2007-01-24T17:04:00.000-07:00

I just realized that our forum was hacked a while ago and a bunch of junk threads were posted. I was getting so much dang spam in that forum and so little actual visitor participation, I figured it was for the best to just delete the forum and move on with life without it. I'm sure no one will miss it unless you were looking for viagra or breast enlargement or one of the other great products being advertised in our informational forums. The truth is, it took me a while to even realize that the forum was hacked because I quit monitoring the forums. So, I doubt anyone will really miss the old forum.

I still think it's a good idea to have a forum or similar venue to discuss credit-related issues, but maybe now's not the time and phpbb isn't the way to do it.

Closing Your Credit Card Account Can Hurt Your Credit Score

2007-01-24T16:33:00.000-07:00

I was just reading about how Closing Your Credit Card Account Can Hurt Your Credit Score on the About.com credit blog. I've heard this before--that closing your accounts can negatively affect your credit score due to change in length of credit history and ratio of used to unused credit. But it can also be good for your credit score to cancel cards that you no longer use. So the idea is it could be good or it could be bad.

My opinion is that you shouldn't beat yourself up over this issue. If you need a good credit score because you're getting ready to buy a house and can't pay for it with cash (who can), it might be worth hanging onto the account (not using it, though) for a little while. But if you don't have any immediate need for credit, forget about it and just cancel the stupid thing. You'll be better off financially if you just pay off all your credit cards and start saving and investing your money anyway. If you've got money in the bank, who cares what your credit score is? You don't need credit to buy stuff with cash. Our economy works largely on the whole credit scoring system, but in a lot of ways we're just playing along with a stupid game. If you've got no debt and money in the bank, you can get a loan for a home, and get a good interest rate. You might have to do it the "old fashioned" way--working with an actual human being, but you can get a loan. Plus, you'll sleep a lot easier at night not having to worry so much about your credit score. Just save your money and live your life.

Protect Against Identity Theft Over the Holidays

2006-11-20T19:16:00.000-07:00

My wife keeps reminding me that it's that time of year when we do a LOT of shopping. As you're out there flashing the credit, you've got more to worry about than your own personal will power to not overspend beyond what you can afford. There are identity thieves lurking out there looking for opportunitites to steal your credit cards, and your identity.

From a CBS News report:
Many consumers are already warming up their credit cards ahead of Friday's unofficial launch of the holiday shopping season. Are you being careful enough with your credit AND with your privacy? Ray Hennessey, editor of SmartMoney.com, offers some help.

Following Black Friday, many shoppers hit the internet for Cyber Monday - the first Monday after Thanksgiving - and complete some of their holiday shopping online from work. "It's the more dangerous time because your using your credit card and your using the internet," Hennessey says. "It's a more secure world than a few years ago, but there are some things you can do to make sure it's even more secure."

Hennessey recommends only using websites of merchants you know and trust. These are the sites that have the more secure sites. And while you are visiting these larger sites, consolidate your purchases. "If you're going to go to a place like Amazon, do as much as your shopping in one thing so you are just dealing with one charge on your bill instead of multiple charges," he suggests. And immediately check receipts against your bank statements. The quicker you find problems, the sooner they can be fixed.

Full article from CBS News

New York law lets consumers freeze credit data

2006-11-06T09:40:00.000-07:00

Nov. 1 marked the enactment of a new state law allowing New Yorkers the option of 'freezing' their credit information, effectively keeping identity theft thieves out and valuable credit information secure.

The New York State Security Freeze Law allows any state consumer to write to the three major agencies - TransUnion, Equifax and Experian - and request that their credit records be blocked from any inquiries.

The credit firms however, believe the law makes it very difficult for consumers to get credit when they need it, and suggested better, easy-to-use and free options, such as placing a fraud alert on their credit file, said Jennifer Costello, a spokesman from Atlanta-based Equifax.

While file freezing may be appropriate for some consumers, it can pose

inconveniences and unintended consequences for credit active Americans,” Equifax said in a statement sent to this publication. “A security freeze requires a consumer to plan ahead as it limits credit grantors and other businesses access to their credit file to make offers of credit, employment, etc.

Full Article from DMNews.com

New York law lets consumers freeze credit data

2006-11-06T09:39:00.000-07:00

Tips for Preventing Identity Theft

2006-10-31T10:11:00.000-07:00

From WSBTV.com News:

Check your credit reports at least once a year from all three credit reporting agencies.
When possible, do not carry your social security card with you.
Don’t put your social security number or driver’s license number on your checks.
Don’t ever give your social security number to anyone unless they have a legitimate reason for needing it.

Can't Read the Fine Print From Your Credit Card Companies

2006-10-20T12:49:00.000-06:00

Does anybody read the fine print from the credit card companies? Isn't that why they call it fine print? It's too small to read without a magnifying glass or some kind of super powered eyeballs? A government entity (GAO) just put out a 114 page report that basically says the credit card companies use typefaces that are too small for many people to read. The article from the Chicago Tribune didn't say whether they can actually do anything about it, but it took 114 pages to explain that the font is too small. I could have told you that in 5 words...oh, the beauty of our tax dollars at work.

Here's an excerpt from the article:

The U.S. Government Accountability Office looked at credit card fine print and found that, for some, the reading is difficult.

The GAO, in a new study, said that according to a review of the fine print by a 'usability expert,' disclosures from the largest credit card issuers were often written well above the eighth-grade level at which about half of U.S. adults read.

'Contrary to usability and readability best practices, the disclosures buried important information in text, failed to group and label related material, and used small typefaces,' the 114-page report found.

The report also looked at how much interest consumers pay on credit cards.

It said about 80 percent of credit card accounts from the top six issuers were charged interest rates of less than 20 percent in 2005, with more than 40 percent having rates below 15 percent, a new study shows.

Article from Chicago Tribune

Capital One Blitzes Credit Reports Looking For New Prey

2006-09-19T10:11:00.000-06:00

Don't you love getting those unsolicited credit card offers in the mail? Capital One has been aggressively going after new victims...er, customers lately. This report from Consumer Affairs...

The next time you watch one of the slick commercials from Capital One asking "What's in your wallet?", keep in mind that there's no need for them to ask -- they already know.

The credit card issuer is famous for constantly checking consumer credit reports in the hopes of finding new borrowers which it can bombard with its credit offers, or luring credit card customers away from their current lender with better terms.

People who have never held a Capital One card or ever done business with the Virginia-based company regularly report finding multiple "inquiries" from it on their credit reports.

More from ConsumerAffairs.com

Note: in the article they mention the ability to opt out of these prequalified offers--which basically means that the companies can't pull your credit without your permission. To do that, you just need to call 1-888-567-8688 or fill out the form at Optoutprescreen.com. I opted out several months back and my junk mail from credit card companies went from about 2 a day down to nearly zero...so I highly recommend it unless you want Capital One to know what's in your wallet ;)

I'm Gonna Have to See Your Credit Before I can offer you this job...

2006-09-12T09:21:00.000-06:00

I keep hearing more and more of these reports about companies doing credit checks on potential hires. Here's another one...

In the past, only banks and financial service companies routinely ran credit checks on potential employees. But employers in other sectors increasingly are including them in the screening process to assess applicants' honesty and integrity, traits not readily gleaned from a résumé.

US employers' use of credit checks increased 55 percent over the last five years, according to Spherion, a recruitment and staffing firm with offices around the country, including Massachusetts.

“The credit check has become a general measure of responsibility and organization,” said industrial psychologist Carl Greenberg, senior vice president of Spherion. “If you cannot organize your finances, how are you going to responsibly organize yourself for a company? Organization is a measure of responsibility.”

Companies are relying on credit reports because employers, afraid of being slapped with libel suits, are no longer as candid about the performance of former workers. And the aggregation of consumer data and the Internet have made the information easier to access. Federal laws require that companies notify job applicants before conducting credit checks, butmany firms reason that viable applicants with good credit have nothing to hide.

Full article from theday.com (free reg.)

AOL adds free insurance coverage against ID theft

2006-09-12T09:16:00.000-06:00

From BusinessWeek...AOL to offer free coverage against identity theft and computer damage. This is obviously a shot at regaining the trust of their dwindling customer base. It's essentially a small supplemental insurance policy that kicks in to cover some of the costs that aren't covered by users' home owners or other insurance policies. Not sure if it will be enough to stem the outflow of AOL customers, but it's a good idea anyway.

25 percent of credit reports contain errors

2006-07-05T13:19:00.000-06:00

According to the U.S. Public Interest Research Group (U.S. PIRG), 25 percent of all credit reports compiled by the three national credit reporting bureaus (Experian, TransUnion and Equifax) contain errors that are serious enough for credit grantors to deny credit applications. Even if an application is approved, the interest rate is likely to be higher, costing the consumer hundreds, if not thousands, of dollars.

Full article on MiamiHerald.com

Good credit reports increasingly important

2006-07-05T13:17:00.000-06:00

For most people, checking your credit report twice a year is sufficient. Consumers who want to be pre-approved for the real estate market or for another type of large purchase should start checking quarterly about a year before they shop for a mortgage, says Fenton N. Soliz, president of Mortgage Experts Inc. in White Plains, N.Y.

Even if there are no mistakes, information is power.

'It's like looking at a picture of yourself,' says Duni. 'When people see it they want to act on it. Especially for someone in their 20s, if they haven't always paid their bills on time. By their late 20s when they're ready to buy a house, there's plenty of time to get their credit score above 650 -- that's what most lenders are looking for to get a good rate.'

Despite all the information consumers are bombarded with about credit history, most people still don't check their credit score. Last year, TrueCredit did a survey with random digit dialing and asked consumers if they know their credit score.

Less then 10 percent of people were able to answer the question.

Full article from delawareonline

Vets Will Get Free Credit Reports

2006-06-26T18:02:00.000-06:00

The Department of Veterans Affairs announced Wednesday that free credit monitoring will be provided to the millions of veterans whose personal information was stolen last month.

Veterans Affairs Secretary Jim Nicholson said the agency would seek to protect millions of veterans and military troops against identity theft after names, Social Security numbers and birth dates were taken May 3 from a VA data analyst’s home.

Those eligible for one year of credit monitoring will be any of the estimated 17.5 million people who are known to have had their Social Security numbers compromised. The VA has said up to 26.5 million could be affected, including 1.1 million military members on active duty, 430,000 members of the National Guard and 645,000 members of the Reserves.

Full Article from Kerrville Daily times

Five Myths About Credit Reports

2006-06-21T09:34:00.000-06:00

Motley Fool UK reports on 5 common credit report myths.

Here are the myths:

1) Credit reference agencies hold credit blacklists.

2) Previous occupants of your home can affect your creditworthiness.

3) Adverse information can be removed from your credit report for a fee.

4) Your credit report shows when credit has been refused.

5) Negative information about you affects the rest of your household.

The truth from the Fool

0% Credit Card Rates and Other Offers that Seem Too Good to be True

2006-06-19T09:42:00.000-06:00

The credit card companies spend a lot of time and money enticing customers to apply for new credit cards and use those cards more and more. All over the place we get bombarded with 0% interest rates and all kinds of sweet deals that seem too good to pass up, and even too good to be true. You've probably learned the hard way about a lot of the tricks the credit card companies use to get their hands on more of your money. Just reading through the fine print of your credit card agreement will open your eyes to all kinds of fees and stipulations that you were not aware of.

This article from MSN Money offers some good insight and tips on how to not be suckered by the marketing gimmicks of the credit card companies.

The Credit Cabal

2006-06-13T07:33:00.000-06:00

Some good insight and thought provoking questions about the validity of the credit reporting system...

Ninety percent of American adults have credit reports. Your credit score depends on what the report says about your number and types of accounts held, length of history, late and overdue payments, whether cards are maxed out, and other information. Then creditors use that score, ranging from 350 to 850, to determine how much to charge for a loan. Someone with a low credit score, in the 500 to 589 range, may be assessed a mortgage rate that is three times higher than someone with an exemplary score over 700. Currently, according to credit bureau Experian, the nation's average score is 33 points shy of prime, at 677. Providian Financial Corporation estimates that if the average consumer credit score were raised just 30 points, Americans, would save $16 billion annually on lower credit card finance charges alone.

Full article from TomPaine.com

Credit Haiku Contest

2006-06-09T10:59:00.000-06:00

It's been a while since I've written a Haiku. I think the last one I wrote was back in elementary school--5th grade, maybe...anyway, CreditBloggers is having a Credit Haiku Contest. So head over there and give it a try. (In case you don't know what Haiku is, it's a form of Japanese poetry that is 3 lines long, the first and 3rd line have 5 syllables and the second line has 7 syllables).

I'm going to see if I can come up with one. Don't expect too much out of me, I'm a little rusty in the Haiku department.

What to do if your personal data is stolen

2006-05-23T08:39:00.000-06:00

A CNN report about identity theft

They recommend these steps to safeguard your personal info:

Monitor your accounts for any irregularities over the next few years.
Put a fraud alert on your credit reports.
Order credit reports directly from each credit bureau.
Consider signing up for a credit monitoring service.
Insist on identifiers other than your Social Security number.
Change your bank account numbers.
Change identifiers on your 401(k), life insurance policy and stock-options brokerage account.
Opt out of pre-approved credit offers.

Read the full article on CNN

Veterans' Personal Data at Risk

2006-05-23T08:32:00.000-06:00

Today’s report that more than 26 million veterans and their spouses may now be exposed to identity theft because a federal employee violated government policy by taking home a computer disk with veterans’ personal information, a disk that was later stolen during a burglary of the employee’s home, threatens to be a headache for many people for a long time.

Perhaps the thief doesn’t realize what he has and has already tossed it and the veterans will dodge the danger of identity theft.
But if the thieves, assuming there was more than one, understand what they have—including names, Social Security numbers, and birthdates—many innocent people could wind up experiencing the nightmare of identity theft.

Full story

Avoiding Common Credit and Debt Scams

2006-05-17T13:35:00.000-06:00

About.com offers some good advice jon how to avoid some of the common scams that are running rampant these days.

ID Theft Prevention Bill Clears Senate Floor

2006-05-16T13:44:00.000-06:00

Helping people protect themselves from identity theft by giving them the ability to lock and unlock their credit reports in 15 minutes is the goal of SB 1744 by California State Senator Debra Bowen (D-Redondo Beach), which passed the full Senate today on a 24-11 vote.

"The security freeze is the only tool that's proven effective in stopping identity thieves in their tracks," said Bowen, who authored California's first-in-the-nation security freeze law in 2001 and a number of the state's other ground-breaking identity theft prevention laws. "When you freeze your credit report, you're safe even if someone gets their hands on your Social Security number because anyone who applies for a car loan, credit card, mortgage, cell phone service, or anything else using your name and Social Security number will run into a brick wall."

Under California law, SB 168 (Bowen) which took effect in 2003, credit reporting agencies must allow people to place a "security freeze" on their credit reports in order to prevent identity theft. People who place a freeze on their credit report can already lift the freeze in order to get, for example, a new loan or credit card, but currently it can take up to three days to lift the freeze. SB 1744 requires credit bureaus to give people the ability to lift a freeze on their credit report within 15 minutes by September 1, 2008. The credit bureaus must already set up systems to do 15-minute lifts for residents of Utah and New Jersey under new laws passed in those states.
Full Article

Congress may gut credit-report protections

2006-05-12T14:52:00.000-06:00

A new state law that would allow Floridians to block access to their credit histories could be superseded by one of several federal proposals now working their ways through Congress.

Consumer advocates say one of the federal measures in particular would eviscerate the state 'security-freeze' law, which was designed to protect credit files from identity theft.

If enacted, the federal bill would also nullify Florida's existing 'breach notification' law and similar laws in other states that require companies to notify people when their personal data is stolen or otherwise compromised, critics of the federal measure say.

'It is the worst consumer-data bill ever,' said Ed Mierzwinski, Florida program director for the Public Interest Research Group, a watchdog organization based in Washington, D.C. 'It not only pre-empts other state laws that make a [security] freeze available to everyone, but its pre-emption is so broad it may prevent other state consumer-protection measures in the future.'

Representatives of the financial-services industry say such reactions are extreme and premature. They say the federal bill in question is only one of many proposals now before Congress, and most of them incorporate many of the protections included in state law.

Full article from the Orlando Sentinel