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Let’s Keep our Identities S.A.F.E.
Security Awareness for Everybody

Here’s how to prevent Identity Theft!

Improving your credit and having credit savvy are the two goals that you need to have in mind when rescuing your credit and getting it back to health. Let’s take a glance at just how you should go about achieving those two goals.

How to Improve Your Credit

Identify missing credit lines

If you are carrying a high credit balance on your credit cards, that can appear to creditors as if you have maxed out your credit limit, and that is never a good position to be in for credit scoring purposes. However, this is becoming a growing universal issue because more and more credit card companies are lowering credit limits, and it is leading to major inaccuracies in over-limits.

Negative information

Always make investigating charge offs on your credit report a priority. If you manage to pay off your bills in full, make sure you can provide proof of such if needed. Also, review collection accounts, on a regular basis, and make sure that there is not more than one collection account on your credit for the same debt. Lastly, please review public information on your credit such as judgments, tax liens, and child support disputes. Keep in mind that it can take months for resolved issues to be cleared from your credit report.

Error Resolution

Make sure that you contact credit companies directly to inform that inaccuracies have been reported onto your credit report as well as the credit bureaus. When you do contact them, written communication is the best solution. You need to send them a letter via certified mail, to strengthen your claim. Include the following:

Your full name

Date of Birth

Social Security number

Address

Copy of your Driver’s License

Your letter could follow a brief request like this:

I have recently been denied credit due to misinformation on my credit report. (Insert credit bureau name here) should make the following corrections to my report…

If you are applying for a loan, ask your Loan Officer for assistance, they should have a wealth of information and resources available to help you resolve this matter more efficiently as well. The credit bureau has 30 days to respond. Credit bureaus must investigate disputed items and remove them if they cannot be verified, but if the information is found to be correct, then unfortunately, the item will remain on your credit. It is your job to do your due diligence and follow up with them accordingly.

If the reporting agency refuses to remove an error for which you have substantiating evidence, you can file suit against the agency, file a complaint with the Federal Trade Commission, and contact your state Attorney General’s office.

 

Credit Savvy

Being credit savvy requires commitment and diligence with your finances. It is never too late to begin to be credit savvy, but keep in mind, the sooner you start, the better. Your credit is a valuable tool when it comes to ensuring that your financial health is intact. Here are some helpful tips to keep in mind:

 

Credit U

The Credit CARD Act, requires that anyone under 21, will need to have a co-signer to be approved for a credit card. If you are under 21 and already have a credit card, this law will not affect you, but if you are under 21, be mindful that this law was designed to possibly help you from potentially getting in financial distress, down the line, and at a young age.

 

Credit 101

If at all possible, do your best to avoid paying the minimum payment on credit cards. Doing so can cause somewhat of a trap, because if you are just paying the minimum you will incur late fees, and it becomes difficult to pay off your debt altogether. Another positive to the Credit CARD Act, is that now credit card statements must show how long it will take for you to repay your debt paying only the minimum every month. Also, keep in mind that you can receive a free copy of your credit report every year for free. Annualcreditreport.com, is a recommended and trusted site to use to secure your report. If you take advantage of all of these resources, then you can be on your way to rescuing your credit, possibly, before you encounter any serious problems.

Credit card as emergency savings

Most of us do fall on hard times at some point or another, but having to use your credit card for emergencies is never a good idea. If you rack up debt, and still find trouble paying off your credit card, then you run the risk of maxing out your limit. When that happens you get higher interest fees tacked onto your balance, and before you know it you are in a credit trap. The best way to counter this problem is to work to have an emergency cash savings. Even if it is only $500, it’s better than nothing, and having to use your credit cards. That may mean cutting out gourmet coffee or the movies or even asking a family member for help, but in the end it could make the difference in your credit report and keep you credit savvy.

 

What should I know about an introductory APR?

If you receive an offer from a credit card with a low APR, bear in mind that often that rate only remains for a few months, and then it increases. So before you do accept a credit card with a low APR think about the following:

How long does the introductory offer lasts

What is the APR that applies after the introductory offer expires

Are there any other additional conditions

Also keep in mind that if you make late payments, or go over your limit, or do not make the minimum number of purchases each month, then you will run the risk of losing your low introductory APR.

 

What is the grace period on purchases?

The best plan of action when you begin using credit cards, is to pay your balance in full every month, when your bill is due. This is the grace period. This is also how credit cards assess interest on purchases. If your credit card company does not apply a grace period on purchases, then you will accrue interest from the time you make purchases. Or if you do pay in full one month, but not the next, you will be charged interest for the month that you did not pay in full. This is why it is best to pay your bill in full and by the due date, in order to avoid interest.

 

What if I only pay the minimum amount due?

Well, that could lead to problems that will impact your credit report. Simply because you are not able to pay back your debt in a timely manner. Paying the minimum can also cause the interest on your APR to change or increase.

What if I do not pay on time?

Unfortunately, you will be charged a late fee and possibly a higher APR on your credit card debt.

 

How do I know what my credit limit is?

The good news is that, credit card companies will inform you of what your credit card limit is when you first obtain your credit card. If you are responsible and handle your credit card with care, then over time your limit could increase, if you do not, then the opposite can take effect and you could incur over the limit fees, and an increased APR. Also be mindful, that it is possible to go over on your limit, even if you get the green light from your creditor to make a certain purchase.

 

How are payments applied and why does it make a difference?

This is a good question that anyone with credit needs to know. This is a how it works; usually your payment will be applied to the balance that has the lowest APR. Bear in mind that most credit card companies offer a totally different APR to balance transfers and cash advances. So basically you will end up paying longer on the purchases that have the higher APR. While you have a credit card, you may also run into having to pay; annual fees, late fees, returned payment fees, cash advance fees, balance transfer fees, foreign transaction fees, and expedited card replacement fees.

Your best bet is to only use your credit card when needed, pay your bill in full or as much as you can, and keep track of your balance and limit. Make sure that your interest accrued does not put you over the limit. Always read your statement, view it online, or call them for additional support.

A smart solution to avoiding late fees is to set up online payments or automatic payments. Use the internet for bill pay options or call the billing department in advance (even though you may be charged a fee), or mail your payment in at least one week before it is due.

 

How do I Choose a Card

This can be a tough decision to make. There are countless credit card companies out there, all promising to be your best solution. The best way to approach this is to really think about how you envision needing to use a credit card. Do you desire a certain card so you can rack up reward points as a frequent flier, do you like having warranties for large purchases and that retailer’s credit card offers such, or are you just wanting a card for peace of mind?

Answer all of these, then research the companies that offer what you are looking for versus just signing up for the first card that sends you a pre-approved offer letter.

Where do I find out about individual credit card terms?

When you apply for a credit card, read the application very carefully, the fine print will often tell you everything that you need to know. Most provide a summary table on the application, which makes understanding their terms very easy. All of the conditions, such as APR should be highlighted and noticeable. Your bill will also usually have all of the information that you will need to be informed about the terms of the card. Items such as due dates, balance, and credit limit, should be clearly presented on your bill for your reference.

If I apply for a credit card, will I receive a card with the terms offered in the application?

In most cases you will, but like with everything, there are always exceptions. Often it boils down to verification such as income and previous credit history, to determine if you receive the same terms that you were offered in the application.