Credit Repair services » Social Security Number

Kids, Credit and Credit Ratings

admin — Mon, 29 Mar 2010 16:11:32 +0000

You probably have never given much thought to your young child’s credit history and rating. However, the increase in identity theft means dads have to be more vigilant about protecting their kids from thieves who will take their financial identity, often not to be discovered for many years. As crises go, this one isn’t earth shattering, but the Federal Trade Commission, the federal agency that tracks identity complaints, says that 11,600 complaints for victims under 18 were filed in 2005. This is roughly double the number filed in 2003. Many of these are fraud cases involving relatives, but some involve real theft too.

What can dads do to protect their kids?

1. Guard their social security number. Social security numbers should only be given out for financial and tax purposes, and medical reasons; so ask yourself whenever anyone (school, community groups) demands your child’s social security number. That goes for parents as well. At some point, the social security number could become a national ID number, but this has not yet occurred.

2. Understand how someone could use his or her number, so you understand why a child with no credit could be a target. Anyone working needs a social security number.

3. Watch the mail. Is your son or daughter suddenly getting mail solicitations for credit cards and loan products? This may be a warning sign that someone has used his or her number and your child has been identified as financially mature.

4. It’s not a bad idea to consider checking your child’s credit report, which you can do for free each year. You can also place a fraud alert on their records, but that has to be renewed every 90 days. Companies exist, like LifeLock (www.lifelock.com) that will track your credit and can add your children to their alerts. These are checks you can do for free by asking for a credit report, but may be worth the fees ($10 per month plus add-on of $25/year per child) if you are concerned.

An allowance for kids is an important part of growing up and plays a significant role in developing the ability to manage money. A few things for parents to keep in mind while choosing how much allowance for kids.

By: P. Banas

How To Clear Your Credit Report

admin — Fri, 19 Mar 2010 02:51:00 +0000

If you’re being turned down for credit left and right by every mortgage broker, credit card company, and landlord, or you’re not even able to refinance your own house, that is an indication that you have some negative items on your credit report that are scaring away lenders. You have two choices: You can either walk away and decide to wait out the next seven years until those negative items drop off your credit report, or you can take control over the situation and learn how to delete negative items from your credit report.

You may have seen those advertisements where those law firms or credit counseling companies promise to fix your credit, raise your FICO score, and get you a fresh start. How do you delete negative items from your credit report? The answer is based on a law passed by Congress in the latter half of the twentieth century known as the Fair Credit Reporting Act. This law was passed to protect consumer’s rights to access their credit report and play an active role in ensuring that it does not contain any inaccuracies or misrepresentations of your true credit profile.

If you have derogatory information contained in any of the credit reports issued by the “big three” credit bureau, you simply need to write a letter to each respective creditor disputing the accuracy of that particular entry in your credit report. By law, then the bureau must contact the creditor to verify that specific item that is in dispute. And here is where the law works in your favor: If the bureau is unable to verify the accuracy of the information within 30 days, they are required to delete that item from your credit report altogether!

Here is an example of how you would do this: Let’s say that you were late for your mortgage payment in May of last year, you simply write a letter to the credit bureau that is reporting that late payment, detailing that entry, and including your name, address, and social security number, in which you state that in accordance with the Fair Credit Reporting Act, you are disputing such and such entry as you believe it may be inaccurate. And in this letter, you must state that, in accordance with the Act, if the agency does not verify this information within 30 days, then they are required to delete the information from your credit report.

Now what if the bureau is able to contact the creditor and verify the information within the 30-day timeframe? Well, then the information stays on your credit report. What if the creditor is a little slow but gets back to the bureau within 45 days? Then yes, even though the bureau deleted the item after 30 days, the information can be added back in the subsequent month. But through patience and persistence, if you follow this method, you will eventually be able to improve your credit score. There is no 100% guarantee, however, which is why shouldn’t pay anyone to fix your credit for you, unless they offer a money back-guarantee if your credit score doesn’t improve within a specific period of time.

A couple of bits of advice: Write one separate letter to each bureau for each disputed item. For example, if you have five derogatory items on your report, that were reported to all three bureaus, then you should write fifteen letters. This way you can track the progress of each dispute, plus it guarantees that the credit agency will pay individual attention to each one. Give them more paperwork to process and they will be that much more backlogged to meet their thirty-day deadline.

And one final bit of advice: The Fair Credit Reporting Act also allows the bureaus to disregard your dispute if it s frivolous in nature. In other words, if you do something to cause them to suspect that you are just filing disputes that you know are more than likely to be accurate, just for the sake of flooding them with requests, then they can disregard your inquiry and not take it seriously. Therefore, be careful not to do things like repeatedly dispute the same item over and over again if it keeps on getting verified. The law was passed to protect the legitimate needs of consumers against credit fraud or data entry errors.

By: Hyder Khan

Don’t Fall Victim To Credit Repair Scams

admin — Thu, 04 Mar 2010 00:35:05 +0000

If you suffer from poor credit, you’ve probably seen advertisements for credit repair services. Many ads for credit repair services claim to be able to remove bankruptcies, create new credit identities, and even erase bad credit.

Beware! Many of these credit repair companies exist only to cheat money out of their customers. Many people have paid hundreds of dollars in fees, only to find that these credit repair companies simply vanish because they can’t deliver what they have promised. Don’t be fooled, the only real way to improve your credit report is with time, effort, and a good payment history.

But if you decide to try out a credit repair service, there are certain warning signs you should look for to decide if the company is legitimate. A credit repair service should not want you to pay for credit repair services before any services are provided. Another warning sign is if a credit repair service recommends that you not contact the credit bureau directly or refuses to answer questions about your legal rights as a debtor.

Some phony credit repair services will advise you to creat a new credit identity by applying for an Employer Identification Number to use instead of your Social Security Number. If you follow this illegal advice you may be commiting fraud, and find yourself facing prosecution. It’s a federal crime to make false statements on a loan or credit application, to misrepresent your Social Security Number, or to obtain an Employer Identification Number from the IRS under false pretenses.

While no one can legally remove accurate and timely negative information from a credit report, the good news is that the law does allow you to dispute information on your credit report that is inaccurate or incomplete. According to the Fair Credit Reporting Act, you can dispute mistakes or outdated items for at absolutely no cost to you. Just ask the credit reporting agency for a dispute form and/or submit your dispute in writing. Include supporting documentation, clearly identify each item in your report that you dispute, explain why you dispute the information, and request a investigation be done. Make sure you remember to keep a copy of the dispute for your records. If the new investigation reveals an error, you can ask that a corrected version of the report be sent to anyone who received your report within the past six months. If the reinvestigation does not resolve your dispute, you can have the credit bureau include your version of the dispute in your credit report.

Luckily, many states have laws regulating credit repair companies. So, if you believe you have been cheated by a fraudulent credit repair service, don’t hesitate to report the company to your local consumer affairs office or your state attorney general.

By: Dave Robinson

Building Credit With Credit Cards

admin — Wed, 03 Mar 2010 21:02:36 +0000

When people find themselves with bad credit the most common refrain they hear from friends, family and idiots on TV is “… first thing: cut up those credit cards!” That couldn’t be more wrong. Credit repair, like life, is often counterintuitive, and the role of credit cards in rehabilitating your credit scores couldn’t be more so. Let me walk you through a worst case scenario.

For our scenario lets assume you have horrible credit scores, sub- 500, with lots of write-offs and old, bad debt. The last thing you want to do is cancel any existing credit lines for two reasons. First, if you close them they will continue to report as a debt each month but they will not show any available credit and you need as much available credit showing as possible. Even a store credit with $289 owed with a $300 ceiling is better than $289 owed on a closed account. The second reason we don’t want to close any credit lines that are still viable is that with credit this bad you won’t be able to open any new accounts for a while so you’re best off working with what you have. Paying down that $289 debt to $149 will make a tremendous impact on your credit scores, probably pushing you above the “drop-dead” 500 credit score.

In a real worst case scenario you don’t even have one account active and clean enough to work with, thats when credit cards become a necessity if you want to rehab your credit within your lifetime. There are cards that will approve anyone with a valid social security number but the costs are high. A typical “worst case” card will offer guaranteed approval but your credit line will only be $300 and the fees to get the card will be upwards of $240, which is applied directly to the card. Thus you get a legitimate credit card that will report your good payment monthly to all three major credit bureaus but you will start out with a fat balance right away. The key is to now pay that down right away so that you are showing an available balance greater than half the maximum credit line of the card, in this case less than $149 owed on a card with a $300 limit. This may seem like a very predatory lending practise and it is, however you are not signing up for credit you are “buying” a credit booster. Simply paying this credit card balance off with on time payments will greatly improve credit scores within 3-6 months.

After you’ve had the “worst case scenario” card for 6 months, assuming you haven’t been late or defaulted on any new debts, you will no longer be a “worst case scenario”. You can now apply for a better card that will actually start with some credit. You usually need a job and one line of credit in good standing for 6 months to get a “step-up” card, that is where the “worst case scenario” card comes in. If you can transfer the balance from your first card to the new one that’s great but you don’t want to cancel the first one even if it seems silly to pay monthly and annual fees to keep a card you will never use. You will keep all of these cards until you have truly reestablished your good credit. This new card should have reasonable fees but you will still be paying $60 to $100 in set up fees and you will have an interest rate at the very high end. It doesn’t matter the interest rates because you aren’t supposed to use this card anyway, just let it bouy your credit.

After you’ve had both cards reporting good payment for about a year with low balances you will see an amazing improvement in your credit scores. The reason is because the formula the credit bureaus use to determine who deserves credit is based on who already has credit. The more unused credit you have the more credit lenders want to give you. At this point you should start replacing predatory cards with high annual fees with good cards with zero annual fees.

Building credit through “bad credit credit cards” is not the only way to improve your credit but it is one of the most important steps if you are really in a deep hole.

By: Mitchell Torek

Discover The Truth About Credit Repair

admin — Sat, 20 Feb 2010 17:25:33 +0000

If you have bad credit, then you may be tempted to hire a company that tells you that they can give you an entirely new credit file, or remove bad marks from your credit report—whether or not they’re true.

Don’t be fooled! The truth is, there are no shortcuts or magic pills that will give you a AAA credit rating.AAA credit will take time and a lot of effort on your part to make it a reality. And there are some scams that you need to be aware of so you won’t fall victim to one of these questionable credit repair companies. Because of this, we’ve put together some guidelines to help you in the process.

First of all, beware of any company that tells you they can remove true marks from your credit report. Generally, a credit repair scam that tells that it’s possible will try to bombard the credit reporting agencies with inquires and hope that they won’t respond in the given time-period. Or will simply take off the remarks to stop the incoming letters. Here’s the truth: even if the scam operation does manage to get a few bad remarks removed from your credit report, they can always be added on again should the lender prove that the bad marks were true.

Next, don’t walk, run as fast as you can from companies that offers to get you a new credit report identity! Being part of these scams could land you in jail! Why? Because their mode of operation is to get you to apply for a tax identification number, which has the same amount of digits as your social security number, and then use it whenever applying for credit. The number will come up “clean,” and you won’t have to pay the consequences for your past bad marks. Now, here’s the downfall. Lying to the federal government about your intended uses for a federal ID number is a federal offense—and guess who will take the rap? That’s right—you—the person who actually filled out the forms “under penalty of law.”

Another sure sign that a company is operating a credit repair scam, and not a true credit repair company, is if they try to pressure you into signing a contract with them. They will likely want large, upfront fees and will tell you that the offer expires today, or use some other high pressure tactic. A company that is truly concerned about helping you to repair your credit will never pressure you or try and trick you into signing a contract with them. In addition, they will make it clear to you, that if you do change your mind within three days of signing, it’s the law that you will be release from any obligation.

Finally, you should accept the fact that no one can “repair” your credit if you’ve truly made the errors in your past. The only way to build a good credit report is to pay your bills on time, not extend your credit limits, and be careful not to apply for too many credit lines. Do all of these things on your own and you’ll soon find yourself with a AAA credit report!

By: Dave Robinson