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Archive for March, 2010

A credit bureau can either be your best friend or your worst enemy. They provide information to individuals and businesses as well as banks, landlords, employers, and other institutions.

This is a list of some of the reasons that a credit bureau exists:

• It helps monitor a person’s financial history. This is part of what determines a person’s creditworthiness. This is one of the first steps towards getting a loan-examination of a person’s credit report and credit bureaus hold this information.
• Another purpose of a credit bureau is to verify the existence of a credit or loan applicant. This helps store owners, banks, and even colleges and employers know that they are dealing with who they are dealing with.
• Credit bureaus help combat identity theft. Often alerts are placed on credit reports to help prevent further unauthorized action. Certain portions of a credit report may be blocked when this happens. In other words, one role of a credit bureau is to protect consumers.
• Organizations such as Equifax, TransUnion, or Experian are also around for another reason. These organizations prevent creditors from trusting in people who are not responsible with money.
• Another reason that credit bureaus exist is for recording-keeping. These organizations keep track of all your spending as well as all your major purchases and other inquiries. They also keep track of your financial obligations and how timely you make your payments.
• Another reason that organizations such as the ones mentioned in this article exist is to help repair your financial history. Being able to improve your credit history is one incentive to make better financial decisions.

Using your Credit Report

Often people seek a free credit report to help them come to terms with changes that need to be made. They also do it to make sure there is no activity that counts against them that has resulted from charges they did not authorize.

One of the main reasons people seek a free credit report is to figure out what can be done about their financial situation. One of the major areas of concern is unsecured (credit card) debt.

The average American unsecured debt is approximately 20,000 dollars. This debt may never go away for some people mainly because they do not realize that making minimum payments will not do it.

Then, if they miss a payment or do their interest rates double or even triple. This makes it even more impossible to pay off this unsecured loan.

To make matters worse, even some of the most supposedly reputable credit card companies are taking advantage of people. This may not always be the intention, as sometimes the high late fees along with over the credit limit penalties can be an incentive to make timely payments.

However, many credit card companies are not very kind when it comes to missing repayments. They are very hard on people and do not offer much grace at all-aside from of course the typical 20 to 30 day no-interest period.

In fact, when it comes to unsecured creditors anything short of near death or national tragedy seems to be a poor excuse for a missed payment. This can be tough and is one reason many people are forced into default and forced to settle while using a credit counselor.

It can be tough to decide what is worse-leaving a credit card bill go until a collection agency offers to settle on it or receiving debt negotiation counseling. Either solution might have its disadvantages.

However, in order to repair your credit-particularly unsecured debt balances-it often is necessary to reach out for help. It is usually better to get help than to not get help.

Usually when you are seeking budget and credit counseling you may have access to your credit report. This is given out free at least once a year.

You never can be too careful when using the Internet. This is evident in the number of identity theft cases that take place annually-and even daily, weekly, and monthly. This pertains to making purchases as well as using free credit report services and shopping in traditional stores.

Statistics

According to Better Business Bureau and Javelin Strategy & Research, over 9 million cases of identity theft crimes have taken place now for two years in a row. Within the past five years there have been a total of over 30 million victims, as reported by agencies such as the FTC and BBB.

Some more interesting facts you might want to know can help you be safer. Take a look below:

• About 71% of fraud occurs within a week of someone’s personal identification being stolen. Sometimes the crime takes place almost immediately if it is a credit card being used that was stolen.
• Although online identity theft is on the rise, only about 11% of identity theft crimes originate here. Stolen wallets and physical documents make up for about 43% of all identity crimes.
• The breakdown of identity theft cases is as follows (2009): 26% credit card fraud, 18% utilities fraud, 17% bank fraud, 12% employment fraud, 5% loan fraud, 9% government fraud, 13% other. This of course are approximate numbers and 2010 stats are going to be different.

Ways Identity is Stolen

Your personally identifiable information can be stolen in a variety of different ways. Your credit cards and/or credit card digits is one of the most common forms of identity theft. This takes place as fraudulent websites set them selves up appearing as a legitimate company.

This often is the case when ordering a free credit report, which when it is legit can save you from credit card/identity fraud. However, if you enter information into a fake free credit report site you are in trouble, especially if you are entering credit card numbers or other personal data over a server that is not secure. Your financial and personal information is then stolen.

Also, numerous traditional brick-and-mortar stores are sometimes careless about asking for a picture I.D. when a purchase is made. So, when someone uses a stolen credit care it often passes through electronic credit card systems.

However, it is not just physical credit cards and credit card numbers that are stolen and exploited. Driver’s license and social security cards and numbers, birth certificates and birth dates, banking account numbers and checkbooks, and even credit reports are stolen.

Why Identity is Stolen

It is done for a variety of reasons. One of these reasons is to secure a home loan and another is to apply for a job, or to be able to find a way to have a utility or phone line turned on (i.e. using a child’s name). It could be even done to get away with committing a crime.