[Tracy Winters]

How to prevent identity theft

Here is a short list of easy-to-do steps, that can help you protect your information and minimize the chances of someone stealing your identity:

1. Never take your social security card in your wallet. Instead, keep it locked at home.
2. Never give anyone your SSN unless it’s absolutely necessary
3. Keep all the files the contain personal or financial information on your computer are password protected.
4. Install a proper Internet security software on your computer.
5. Make sure you Wi-Fi is password protected.
6. Clear browser history after shopping or banking online
7. If you have a laptop, make sure it locks itself and requires a password to wake up from standby or hibernation.
8. Never confirm account information or passwords via email. Your Bank or Credit Card Company will never ask you to do so.
9. Never throw away documents containing personal information. Always shred or burn them.
10. Never give personal information over the phone unless you have initiated the call

You can find many more protection against identity theft tips at Ways To Prevent Identity Theft.

[Tracy Winters]

I’d wait two more months

I am assuming you’re getting your credit reports online and not ordering the actual hard copy from the bureaus.
The online services are normally about 90 days behind on their reporting. If you have only had the card for 4 months that would explain why it is not yet appearing in your online reports.

As long as you are using the card I am sure Capital One is reporting to the bureaus. Just be patient.. I am sure it will show up on Experian shortly.

I’d wait 2 more months (you need at least minimum of six months to have a score anyway), and if it doesn’t sort itself out by then I’d call or write Capital One.

[Tracy Winters]

Both are bad for your score

Foreclosure and bankruptcy are very bad for your credit score. No one can tell you for sure which is worse because no one knows the FICO formula, but take it from me – they are bad.

Bankruptcy, foreclosure and charged off credit card accounts will show on your credit report for 7-years from the date of first delinquency while a chapter 7 bankruptcy will show for 10-years.

As long as they show on your credit report – they impact your credit score, although as time goes by their impact diminishes.

Anyone who gets your credit report will be able to see these negative items, although they won’t be able to tell how exactly these item affect your credit score.

BTW, a potential employer must have your written consent to obtain a copy of your credit report.

Hope this helps.

[Tracy Winters]

Start by filing a formal dispute with the credit bureaus

The first thing you need to do is send a written dispute letter to each of the 3 major credit bureaus with a copy of that police report. Indicate the accounts are due to identity theft. Include a copy of your driver’s license, social security card, and birth certificate showing you were a minor when the accounts were open (See this link for details).

File your dispute in writing rather than on-line. You want to create a paper trail. Send your dispute by certified mail, return receipt requested.

Then send a certified, return receipt letter to each creditor indicating the ID theft. Include a copy of the police report.

Clearing up identity theft can be a problem. The default accounts mat be sold to new collection agencies, and you may need to repeat the process again. Keep copies of all correspondence, and demand answers in writing.

You may also file a formal complaint with the Federal Trade Commission. Call toll-free 1-877-ID-THEFT (1-877-438-4338), TDD: 202-326-2502, or visit http://www.ftccomplaintassistant.gov or http://www.ftccomplaintassistant.gov/FTC_Wizard.aspx?Lang=en.

Another thing you may want to check is the Statue of Limitations. If a new collection agency calls, you can have the upper hand if the these old accounts are time barred in your state (this means they are too old anyways to seek legal action to collect. You can check your state’s SOL here: http://www.bankrate.com/finance/credit-cards/state-stat…

[Tracy Winters]

Re: How to build credit score

Margaret,
First, you need to pay your debts. Not only from the moral point of view. If you don’t – they’ll probably sue you and get a judgment against you. You will end up paying the debt’s, interest, fines, legal fees and ruining your credit – which will cost you even more…

If these defaults are already on your credit report than Paying them off won’t improve your score. However, paid old debt also looks better to creditors that review your credit report.

Making small payments as part of a payment plan on already defaulted debts is a really bad way to pay back defaults. They can take your payments for a year then resell the account to a new collection agency, which could restart the collection process all over again.

What you need to do is save your money and settle the accounts in full for less, like 25% of the defaulted amount. Get all terms in writing first.

Bad debts will come off your credit report by themselves in 7 years automatically, unless you negotiate full payment for a complete removal of them from your credit report. Once again, before paying get all terms in writing first.

And you don’t need to waste money on a monitoring service. CreditKarma.com offers a free score estimator based on your TransUnion report. It’s not FICO but within 50 points of so. Good enough to check for your purposes.

You will need at least 24 months of consistent, on time payment history to see any improvement in your score. If you don’t have an open, active line of credit, get a credit card, even if you have to get a secured card. Use the card for regular purchases, wait for the statement, and pay the balance in full every month. This will build credit and avoid interest.

[Tracy Winters]

It stays for 7-1/2 years on your credit report

Derogatory items fall off your credit report 7-1/2 years from the date of first deficiency (default). This is per the FCRA and nothing restarts that clock. Paying will not improve your score, nor get the items removed.

You could try to negotiate a Pay for Delete Agreement with the collection agency. Some will and most won’t. Be sure to get a written settlement agreement before you pay and do not give the collector direct access to your bank account.

If no one is contacting you about these debts, you may want to just let sleeping dogs lie and let them age off. The older they get, the less impact on your score. Of course, if you plan to apply for a mortgage any time in the near future, mortgage lenders will require those items be resolved before approving a mortgage.

[Tracy Winters]

Vantage score will get you nowhere

I can’t understand why you waste your time over a 10 point drop. It means nothing.
It’s true that having a low utilization ratio is good for your score. and by the way – your score is pretty good.

Anyway – I think that you’re wasting your time and money over vantage.

FICO is much more important. Almost all financial institutions use the FICO score and not the Vantage.

FICO and Vantage are entirely different, so monitoring your Vantage score benefit you nothing.

It’s only good for the credit bureau that’s selling you this service. They try to push it to customers’ throats, and I can see that they’re doing a pretty good job..

P.S. the same goes to KreditKarma. I know it’s free, so at least no one waste money over it, but really – it’s good for nothing.

[Tracy Winters]

Stefanie,

You are very right. The federal law prohibit many personal information items from being factored into your credit score, including your deriving habits (points on your driving license).

Federal law also prohibits factoring any private information “that is not proven to be predictive of future credit performance”.

As to why credit scores have effect on your insurance rate – I’m not sure. Anyway, it’s a known fact.

[Tracy Winters]

These types of payments don’t build credit

It’s very logical. Unfortunately, you need to use credit in order to build a credit history. Stuff like rent utility bills, gym memberships, checking accounts, saving accounts, cell phones are not extensions of credit and do nothing to build credit score.

These types of payments do not go on your credit report. Since credit scores are based on the information that’s on your credit report, this explains why you don’t have a score.

You nee to use credit in order to build credit history and have a credit score. For this you need to use either Installment credit (Student loan, Car loan, Furniture loan or any other loan) or Revolving credit (Credit Cards) and use them for at least 6 months.

You need to start using credit. The best way to do this is by getting a small secured loan and a secured credit card.

You can read more about it here.

[Tracy Winters]

Building good credit takes time and patience

Building credit takes time. You may see many advertisements promising to build or fix your credit history in a matter of days. Don’t fall for them. It’s only your money they’re after. The plain truth is that it may take years to build a GOOD credit history, and there are no shortcuts.

You must understand that good credit is more than just a good credit score. There IS a difference between the two.

While 90% of your credit score is determined by your credit activity from the past 24 months, your credit report includes information from the last 7 years. So in theory you may have a good score, but a lousy report.

When creditors pull your report, they look at much more than just your score. So if your report has derogatory items on it, you may find it impossible to get credit even with a good score.

So How to build good credit?
You need to take care of two different aspects of your credit report:

• If you have negative information on your report (defaults, Pay-Offs, Late Payments etc) – you must fix these items.
• You need to establish a stream of positive information (i.e. a steady flow of timely payments.

Fixing Negative Items
Negative items may or may not weigh down on your score. The older they get, the lesser the effect on your score. However, as explained earlier – you must fix them regardless of whether they will improve your score.

In fact, with old negative information, most likely that your score will remain the same. BUT, when a creditor checks your report, a paid collection or default (with a zero balance) looks much better than unpaid one.

Building Positive Information
With or without negative information on your report, you need to establish positive information. For that, you need to actually use credit.

Since it’s hard to establish credit with bad or no credit history, you have two options:

• Apply for and use secured credit cards.

  Secured credit cards are easy to get because the bank has a security in case that you default.

  You need to use the secured card for small purchases and keep paying the statements on time. Avoid carrying balances on the card. It’s better to pay the statements in full. Also, avoid using more than 35% of your available limit.

• Apply for a secured loan.
  Much like secured credit cards, secured loans are easy to get. Why do you need one? To diversify your credit types and establish another stream of timely payments.

Here are the 4 most important points of How to build good credit:

1. A steady history of timely payments (at least 2 years)
2. No derogatory items on your report
3. Low credit utilization (below 35%)
4. A healthy mix of credit types (installments, Revolving etc)

Lastly, read this list of Credit Building Do’s & Don’ts.

P.S. if you have an auto loan or a store credit card to add – go ahead. It will improve your credit.

[Tracy Winters]

Get a cheaper car!

You can get houses for $18,000. Why on earth would you want to lock yourself in to high interest payments for years on a $18,000 car.
You can get beautiful cars for $3000 all day on Craigslist.

[Tracy Winters]

You can’t block your current contractors

You have no way of doing that. A security freeze is only good for blocking NEW creditors and lenders from accessing your credit report.
However, once you have an existing relationship with a business, they continue to have free access to your credit report regardless of the security freeze, or even a fraud alert for that matter.

This is for a good reason, because they need to maintain and monitor your existing account with them.

Hope this helps.

[Tracy Winters]

Absolutely

Not only these defaulted accounts CAN re appear, it is very likely that they WILL!

Disputing accurate information is a complete waste of time. When you send your dispute to the credit bureau, they contact the creditor and verify the debt with him. If the creditor fails to respond within 30 days, it is considered as un-verified debt and the credit bureaus must remove it from your report. This is as per the FACT Act.

However, when the creditor subsequently responds and verifies the account, the credit bureaus put it back on your report.

Even if the creditor doesn’t respond, he may simply report the same debt again, or sell it to a collection agency. Either way – the account re appears up on your report.

Correctly reported derogatory information cannot be legally removed from your credit report.

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