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Did you know that mistakes, errors, and inaccuracies within your credit reports can cost you financially if you’re not aware of them early on? It is suggested that over 79% of consumers credit reports contain serious errors resulting in denial of credit. Many inaccuracies may be a result of simple human error while others may be due to more severe cases, such as identity theft. Most people only order their credit reports once a year. Yet, mistakes on your credit reports can happen all throughout a twelve month period. If only ordered once a year, those mistakes could catch you unaware and may hinder you from making major purchases.

That’s why it’s imperative to gain access to all three credit reports at minimum – every three to six months – for review of accuracy and/or errors. Signing up for those “free” online advertisements to provide continual access and credit monitoring of your credit reports may not necessarily be a bad thing. Just don’t rely on those free services to provide you a complete and comprehensive mechanism for identity theft or credit restorative services. Adopting this one small habit of consistency can help reduce the amount of errors being reported. Most creditors may not alert you of their mistakes. However, when a creditor or credit bureau is notified by the consumer of an error – they must correct and/or remove those items reporting inaccurately. Federal law mandates the consumer’s right to a free credit report annually from each credit reporting agency, but not to a free credit score.

The Federal Trade Commission better known as the “FTC” governs many state and federal laws that protect consumers and insures the completeness and accuracy of credit and debt practices. These laws do not guarantee credit approval to consumers. However, they are in place and require creditors to provide consumers a fair and equal opportunity to receive credit and resolve disputes over credit errors.

The Fair Credit Reporting Act (FCRA) is one of the most notable rights in place to protect consumers. This act was passed in 1970 regulating the collection of credit information and the access to credit reports. 

The FCRA ensures to promote the accuracy, fairness and privacy of personal information within the files of credit bureaus/credit reporting agencies. In addition, the FCRA protects consumers by requiring credit bureaus/credit reporting agencies to adopt “reasonable procedures” regarding confidentiality, accuracy and proper use of consumer’s credit information. Per the FCRA, a consumer has the right to personally dispute incomplete or inaccurate information within their credit reports. However, there are times when the extra help by a professional credit expert may advance the disputing process.

Credit Restoration or Credit Repair has come under scrutiny by some for these top three reasons:

1. A consumer didn’t experience their anticipated results and now claims “the credit program didn’t work”.

2. A credit repair person or company – over promised or guaranteed certain results to the consumer yet undelivered on their services provided.

3. A consumer who has never went through a credit restoration program received second hand information from an unhappy consumer who actually went through the program. Quick Note: Always follow your own path in life and not the path of someone disgruntled with no success.

Terms like “fix my credit”; “guaranteed credit repair”; and “erase all items” all have negative connotations and should not be included in any conversation regarding credit restoration. When partnered with a reputable and ethical professional or organization, credit restoration has been known to increase credit scores and restore a consumer’s financial image – allowing them to “Become Credit Worthy” again.

To order all three credit reports, please visit www.annualcreditreport.com.

Our country has been plagued and bombarded with data breaches and threats of Identity fraud all around us. Seemingly every other week, there is another company coming out of their hub sharing that a data breach has occurred within their computer systems and now hundred upon thousands of people may have been exposed. No wonder why people are scrambling for some form of identity theft protection through their credit cards, car insurance, credit unions, banks, and online. Unfortunately, many of these companies that say they offer identity theft protection only cover the financial portion of the consumer. Very few take a holistic approach to monitor and provide coverage in every aspect relating to a consumer’s protection.

Unfortunately, the fear of one’s identity being compromised or stolen seems to be a widespread concern for many. It’s considered one of the fastest-growing crimes in the United States. Many don’t realize how easily a criminal can obtain your personal information for their malicious use. It’s become one of the savviest offenses. A criminal no longer needs to enter your home to gain access to your most prized information. Cyberspace inclusive of the dark web has done a pretty good job of exposing our information to the world. An identity fraud problem if not handled properly and with promptness can also become a legal situation. It’s not just about what you know but really about what you don’t know that CAN hurt you. Most consumers don’t even realize that there are numerous forms of identity theft that are not detected via our credit reports.  

Some of those include:

• Driver’s License Fraud

• Character/Criminal Fraud

• Tax Identity Theft

• Employment Identity Theft

• Synthetic Identity Theft

• Medical Identity Theft

• Insurance Identity Theft

• Children’s Identity Theft

• Debit/Credit Fraud

• Online Shopping Fraud

It’s imperative to know what to search for in a product or program when looking to protect you and your family. Make sure that the product itself is robust and offers a complete wall of protection that extends beyond the credit reports, bank accounts, and beyond the plastics that you carry in your wallet. Social media has now become a breeding ground for identity thieves as well. So again, look for a comprehensive product as opposed to an inexpensive product. Have you ever heard this saying, “you get what you pay for”? While many identity theft products share their claim to fame, there are no bulletproof solutions that can actually halt identity theft from occurring.

The main objective is to have broad protection in place using a proactive approach, rather than not having anything in place and becoming more reactive. Who do you know that acquires car insurance after they’ve totaled their car, or gets homeowners insurance after their house has burned down; or even signs up for life insurance after they’ve died? I’ve actually heard many consumers say, “My credit is so bad that a thief can steal my credit because they’ll just want to give it back”. My reply to anyone who has this mindset is, “You’re more than just a 9 digit Social Security number”! Keep in mind that if a thief gets your credit cards or money from bank accounts, those tangibles can be replaced. However, if a thief steals your identity, that’s your life which is irreplaceable!

There’s an old saying that goes, “It’s better to have something and not need it than to need something and not have it”. To learn more information on how to help protect what you can’t afford to lose, please visit my website www.alisanders.wearelegalshield.com.

Ali C. Sanders is an Independent Associate of LegalShield.

Did you know that having a high credit score just means that you’re good at borrowing money? That’s your reward for making timely payments consistently for a long period of time.

On the flip side, your penalty for borrowing is called – Interest. The question now becomes, should I become a better borrower and stay in debt with a good credit score? OR, should I become a better saver and steward over my money with little to no debts owed and STILL maintain a high credit score?

Think about this – When you borrow money, you will now be charged interest as a penalty – for borrowing – so the amount you pay back now becomes greater than the amount you originally borrowed. Hmmm… Interesting, yet a brilliant concept – right?! It’s called being a Debtor to the Lender. How about switching this scenario and actually being in a position to Lend to someone in need instead of always being the indebted one.

Truth be told, it’s the lending industry that has put such a demand on having high credit scores. The belief system is that a high credit score gets you more and a low credit score makes you pay more – to get the “more”. While this holds a great deal of merit, specifically, when it comes to installment loan applications, car loans, and mortgages, lenders additionally have some negotiating power and may play an active role in making decisions on whether you are approved or denied credit.  So let’s explore credit scores.

Your credit score is a three-digit number generated by a mathematical algorithm utilizing the information contained within a consumer’s credit file. This numerical number can predict potential risk associated with lending money to consumers. It helps a lender determine its risk to help mitigate losses due to acquiring a bad debt or debtor (consumer). Credit scores can also provide a reflection of a consumer’s repayment on credit obligations. Ideally, the scoring system allows creditors to evaluate applicants consistently and impartially to determine their creditworthiness.

Yet, there is one scoring model that is relied on and in demand more so than all the others and that is called the FICO scoring model. Developed in the 1950s, the FICO scores have evolved and become an industry standard. It is suggested that over 90% of financial institutions uses the FICO scoring model when it comes to their decision to grant credit. FICO scores range anywhere from 300 to 850, where a higher number indicates lower risk and a low number indicates a high risk.

There are also various versions of the FICO scoring model that can provide industry-specific scores:

Example: If you’re purchasing a car, a FICO auto score may be helpful since it’s used in the majority of auto financing-related credit decisions. The same may hold true if you’re applying for a credit card. A FICO bankcard score may be used since it’s specific to that industry and used by many credit card issuers.

Even with the multiplicity of FICO Score versions being used throughout the credit world, they still share the same premise – having the ability to detect high risk versus low risk applicants. Similarly, good credit behaviors like paying your bills on time and keeping a low debt to credit utilization are also reflected in credit scores. All of these factors work in tandem to allow your FICO scores to be accepted across the board.

There are five factors that determine your three digit credit score. Some weighing heavier than others: (graphic). However, a scoring system may not use certain characteristics like race, sex, marital status, national origin or religion as factors. Although age may be a factor with some creditors, any scoring system that includes age must give equal treatment to elderly applicants.

Generally a credit score of 700 or higher would be considered very good and with major buying power. An 800 credit score is considered exceptional and can pretty much allow you to obtain whatever you desire. A score in the mid 600’s may result in a demand for more money as down payment and higher interest rate when making a major purchase like a home or car. However, that same 600 score may be adequate enough when applying for credit in department stores.

Your credit score changes regularly as you make payments as do the information contained in your credit reports. Keep in mind that as negative information ages; it has less of an impact on your credit score. That’s why it’s imperative to be diligent in monitoring your credit reports. Your credit scores may not always comply with lender’s standards. However, lenders may take into consideration special reasons for your past credit problems. Furthermore, lenders not only review your credit scores but may also observe other factors such as – job history; current income; and other savings to determine a final decision. Become Credit Worthy Today. For more information on how to maintain a positive credit score, order your copy of “Becoming Credit Worthy. On Sale today!