A credit freeze is a really nice tool in the fight against identity theft. Essentially, a freeze makes it impossible for anyone to open new credit accounts in your name even if they have all your personal information.
Of course, it adds a little extra work if you want to open a new line of credit, but I think it’s a fair trade. Besides, didn’t we all learn a little lesson in 2008 about what happens when it’s too easy to obtain credit?
At any rate, it turns out if you’re an Indiana resident you can request a credit freeze free of charge. It’s a right provided by Indiana law to Indiana residents. I don’t know if other states have this type of thing in place (after all, I can’t do research on 49 attorneys general in the time I’m taking to write this). If you ain’t from around here, check online with your state’s attorney general to find out.
You can request a freeze either by paper mail or online. More information is available at the Indiana AG’s website. Check it out today!
There is an excellent blog site called Get Rich Slowly that I highly recommend. It doesn’t really cover fraud or identity theft—the focus is on personal finance. Getting out of debt, saving money, spending wisely; J.D. covers it all, and he speaks from experience (he went from a mountain of credit card to zero over the course of a few years).
However, since we’ve been on the topic of credit reports and credit repair this week, I thought I’d post a link to a GRS article from a couple months ago. The article is about Annualcreditreport.com versus the one with the silly commercials, and you can read it right here. He also links to an article from yet another site. There’s plenty to read!
Normally I like to create the content for this site, but that’s just because I like to write. When someone else has an article I think you should read, I have no problem linking to it. Definitely check out Get Rich Slowly. It’s good stuff.
They say they want to help you. They say they can fix your less-than-perfect credit history.
What they really want is to rip you off.
First off, it is important to know that there are legitimate agencies that can help you get your financial situation back on track. I’ll talk about some of those later.
However, there are also a lot of agencies looking to help themselves to your cash. Here are a few things to remember:
You should never pay an upfront fee for any type of credit counseling service. This is a major warning sign that they are up to no good.
They must (by law) provide you with a copy of your rights as a consumer. This tells you what you may and may not do in regards to your credit history. If they do not provide this information, it is another warning sign.
If your credit history has accurate negative information, it’s there to stay for seven years (ten for bankruptcy). There is no legal way to have it removed. Are they offering to delete records of a credit card you actually defaulted on? Warning sign.
If there are mistakes on your report, know that you can correct them yourself for free. If an agency is trying to keep you from contacting a credit bureau yourself, that’s…you guessed it: a warning sign.
It is illegal to try to create a new Social Security number or Employer Identification number for the purpose of creating a clean credit file. It doesn’t work, and it can get you into far worse trouble (we’re talking about the kind of trouble that could involve handcuffs and mugshots).
Check out any credit reporting agency with the Better Business Bureau before you even consider using their services.
The minute they use the term “piggybacking,” walk away. It doesn’t work. Warning sign.
There are advertisements everywhere for credit repair services—email messages, on the radio, even on television. I’m just going to throw this out there: ignore them all. Maybe some of them are legit, but many are not. Do your own research and make your own decision. A flashy commercial that makes big promises is a definite (say it with me) warning sign.
Legitimate credit counseling agencies are non-profit organizations. Every single one of them.
So…now that you know how to avoid a scam, where can you go for legitimate credit couseling?
REGIONAL Federal Credit Union works with Consumer Credit Counseling Services of Northwest Indiana (http://www.cccsnwi.org/), a non-profit agency. REGIONAL partners with CCCSNWI because they’re trustworthy, and they do exactly what a credit counseling service should do.
You can also find information about legitimate services nationwide from the National Foundation for Credit Counseling (http://www.nfcc.org/). They don’t work with scammers.
As always, before you use any credit counseling service, check them out with the Better Business Bureau (http://www.bbb.org). If they’re not BBB accredited, and if they don’t have a pretty spotless record, look elsewhere.
Personally, I’d never use an agency that had anything less than an “A+” rating.
By law, you are entitled to one free credit report per year from each of the three major credit reporting agencies, TransUnion, Experian and Equifax.
There is only ONE place to safely obtain these credit reports: https://www.annualcreditreport.com/. Beware of websites with similar names, since these could be spoof sites created to steal personal information (which you are required to provide when you get your credit reports). Also, do not be taken in by cute commercials with catchy songs. You know the ones I’m talking about. That is a service (of debatable value) that costs around $80 per year and, from what I hear, is very difficult to cancel. They’ve gotten in some hot water regarding advertising practices, too.
You can obtain your credit score when you get your reports, but you will have to pay for this information. The report is free, getting the score is not. For the purposes of checking for identity theft, fraud and errors, you do not need your score. Actually, you don’t really need it for much of anything, unless you’re the type who wants to brag about your credit score. People are not impressed by that, incidentally.
All three of the major credit reporting agencies are required to share new information with each other within 24 hours, so your credit reports should all contain the same information. Use this to your advantage: stagger your reports so (for example) you’re getting TransUnion in January, Equifax in May, and Experian in September. It’s a great way to keep tabs, rather than getting all three in January then waiting 12 months to check your reports again.
When you read your credit reports, you’re looking for accounts you did not open, errors regarding late payments, charge-offs or collections, and balances that are wildly different than what you think they should be (if it says you owe Discover $14,000 when you’ve never owed more than $27, for example). Basically, you’re checking to make sure all the information is accurate.
Credit reports are a vast, complex subject. I’ll talk more about them this week—this could turn into a series!