Credit Reports

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Why Should You Protect Your Credit?
Credit, second only to your family and your time, is the most important asset you possess. The difference between having credit or not can be the difference between freedom and oppression, between opportunity taken and opportunity denied.

In every other system in this country, you are innocent until proven guilty. Not so with your credit. All a creditor has to do is say that you were late or delinquent in your payments and it goes on your record. It's up to you to prove conclusively that you were in fact, not late. If you don't have any proof, your creditor wins and you lose. This is especially frightening if someone steals your identity, because even if you are innocent, it will cost YOU money to go to court, track down documentation, hire lawyers, etc. Your creditors cannot be held liable as there is no way they could have known you were a victim of fraud. If, in the unlikely event you can find and identify your identity thief, chances are slim you will be able to recover costs from him/her for your efforts to clear your name. In other words, this will cost you a fortune to clear your name, all non-refundable. It's worth the effort to take precautions against this happening to you.

How You Can Protect Your Credit?
The most important things you can do to safeguard your credit:

1. Buy a shredder. Shredders are inexpensive these days; about $25 in most office supply stores. Buy one. Use it religiously. It is the cheapest and easiest way to protect your privacy.

Shred any paperwork containing personal information before it hits the trashcan. Dumpster-diving, the practice of looking through trash for personal information, is the most common method that identity thieves use to get personal information.

Therefore, shred:
All of those credit card applications you get in the mail
Any credit card receipts
Paystubs
Bank statements, deposit receipts
Utility bill stubs
Old tax returns
Anything containing your SSN number  

2. Pull your credit report at least once a year. Currently, this may cost you $9 each or $27 for all three credit reporting agencies. When the new credit law takes effect sometime before December 2004, everyone will be able to get one report free each year. Interesting note on this: Lots of credit monitoring companies out there will charge you $60/year for their services. Do you see how you can save a few bucks by pulling your own reports? What to look for on your report which may indicate identity theft has occurred. If you find indications, before you panic, use our credit repair methods to challenge accounts you know aren't yours. It could just be a mistake. Are all of the credit lines on the report yours?

Make note of each one.
Inquiries - were there excessive inquiries made on your report? Can you account for all of them? Excessive inquiries could mean that someone is trying to get credit in your name. Use our methods of challenging these inquiries if you want to find out more information.

Other items to look for just to keep your credit report "tidy" and in the best possible shape for when you get the sudden urge to apply for new credit. Don't wait to clean up your report, do it now. Cleaning up your credit can take 30-90 days. You should also note that it is becoming an new industry practice to raise rates on existing credit card rates if other credit lines go delinquent. Once a credit card company raises your rate, it is difficult to get them to lower it again, even if your credit report has been corrected. Is old credit (like closed accounts, old delinquent marks) on your report that should come off? Credit lines which have been closed or had no activity for 7 years should not be on your report, including derogatory credit.

Look for any late pays - are they accurate?
If you have joint credit, pay attention to the current balances on these accounts. Were you aware of any high balances?

3. Secure your paperwork, especially if you have roommates. The saddest tales of all are when people you know steal your identity. You don't think this happens? Read our article on Family Fraud. How to do secure your paperwork? Buy a file cabinet and LOCK it or rent a safety deposit box. Obviously, a safety deposit box is not as convenient as a file cabinet, but if you don't trust the people around, it is a great option.

What kind of paperwork should you lock away from prying eyes?
Any credit card receipts
Paystubs
Bank statements, deposit receipts
Utility bill stubs
Old tax returns
Anything containing your SSN number

4. Take your name off mailing lists. The less paperwork being sent to your house with "preapproved" credit cards, the better. Some identity thieves don't wait for those applications to get into the trash, they steal them right out of your mailbox. Here are some ways to get rid of all that junk mail.