Archive for Your Credit

HOW TO KEEP YOUR ONLINE BROKERAGE ACCOUNT SAFE by Paul Ferraresi

Last year’s news of the Equifax data breach justifiably upset millions of Americans – essentially every individual with a credit record of any kind.

The Identity Theft Resource Center (idtheftcenter.org), a nonprofit that works to educate the public about identity theft, data breaches, and cyber security, says, “A social security number is the most valuable piece of information to identity thieves and can result in many different forms of identity theft.” They note that the crooks don’t care whether your credit is good or bad, and though you aren’t automatically a victim of ID theft due to the Equifax breach, you should take this threat seriously. It is worth signing up for their weekly newsletter to stay on top of the most recent malicious attacks.

You should update your security questions and answers, regularly monitor your accounts, and promptly report any concerns and check with your wireless service provider for steps it may recommend for protecting mobile phone accounts.

To protect yourself right now, Equifax has put up a website intended to tell you whether your data was compromised.

When I checked on the status of my family’s data, I got the message: “Based on the information provided, we believe that your personal information may have been impacted by this incident.” Equifax recommends that anyone affected enroll with its partner firm, Trusted ID, which monitors credit files and informs you if your data have been used to open a new account

A better layer of protection, though far from perfect, is to place a security freeze on your credit at each credit rating agency. To do so, you have to visit each firm’s specialized website and fill out a form. At the end of the process, you will either receive a personal identification number, or be able to generate one yourself. When you know you will be applying for a new line of credit, credit card, or auto loan, find out which credit rating agency the vendor uses. A day or two in advance, unlock your credit file so your application can be processed.

A major complaint about its freeze process was that the site generated PIN was made up of month, date, and year and time stamp of the freeze which could be easily hacked. The PIN is now a random number.

Experian’s site was experiencing such high traffic that it was very slow to respond. Transunion has an identity protection product call True Identity that’s free. You select your own user ID and password. Requiring just a request and identity verification, smaller player Innovis, a unit of CBCInnovis, cased in Columbus, Ohio, is by far the easiest of credit freezes to put in place. Confirmation of the request comes via snail mail.

Another step you can take is to turn on two-factor authentication for all financial websites and apps. This might mean your fingerprint is part of the login process on your smart phone, for instance, or that you must type in a code that changes periodically, along with your password. That will protect existing accounts. When you open a new account, enable two-factor authentication at the start.

HOW TO KEEP YOUR ONLINE BROKERAGE ACCOUNT SAFE by Paul Ferraresi

News of the Equifax data breach justifiably upset millions of Americans – essentially every individual with a credit record of any kind.

The Identity Theft Resource Center (idtheftcenter.org), a nonprofit that works to educate the public about identity theft, data breaches, and cyber security, says, “A social security number is the most valuable piece of information to identity thieves and can result in many different forms of identity theft.” They not that the crooks don’t care whether your credit is good or bad, and though you aren’t automatically a victim of ID theft due to the Equifax breach, you should take this threat seriously. It is worth signing up for their weekly newsletter to stay on top of the most recent malicious attacks.

You should update your security questions and answers, regularly monitor your accounts, and promptly report any concerns and check with your wireless service provider for steps it may recommend for protecting mobile phone accounts.

To protect yourself right now, Equifax has put up a website intended to tell you whether your data was compromised.

When I checked on the status of my family’s data, I got the message: “Based on the information provided, we believe that your personal information may have been impacted by this incident.” Equifax recommends that anyone affected enroll with its partner firm, Trusted ID, which monitors credit files and informs you if your data have been used to open a new account

A better layer of protection, though far from perfect, is to place a security freeze on your credit at each credit rating agency. To do so, you have to visit each firm’s specialized website and fill out a form. At the end of the process, you will either receive a personal identification number, or be able to generate one yourself. When you know you will be applying for a new line of credit, credit card, or auto loan, find out which credit rating age4ncy the vendor uses. A day or two in advance, unlock your credit file so your application can be processed.

A major complaint about its freeze process was that the site generated PIN was made up of month, date, and year and time stamp of the freeze which could be easily hacked. The PIN is now a random number.

Experian’s site was experiencing such high traffic that it was very slow to respond. TransUnion has an identity protection product call True Identity that’s free. You select your own user ID and password. Requiring just a request and identity verification, smaller player Innovis, a unit of CBCInnovis, cased in Columbus, Ohio, is by far the easiest of credit freezes to put in place. Confirmation of the request comes via snail mail.

Another step you can take is to turn on two-factor authentication for all financial websites and apps. This might mean your fingerprint is part of the login process on your smart phone, for instance, or that you must type in a code that changes periodically, along with your password. That will protect existing accounts. When you open a new account, enable two-factor authentication at the start.

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MAJOR CHANGES TO HOW YOUR CREDIT SCORE IS CALCULATED by Paul Ferraresi

The math behind your credit score is getting an overhaul, with changes big enough that they might alter the behavior of both cautious spenders as well as riskier borrowers.

Most notably for those with high scores: Abiding by the golden rule of “Don’t close your credit card accounts” may now hurt your standing. On the other side, those with low scores may benefit from the removal of civil judgments, medical debts and tax liens as factors.

Beyond determining whether someone gets approved for a credit card, a credit score can affect what interest rate and what spending limit are offered.

The new method is being implemented later this year by VantageScore, a company created by the credit bureaus Experian, TransUnion and Equifax. It’s not as well-known as Fair Isaac Corp., whose FICO score is used for the vast majority of mortgages. But VantageScore handled 8 billion account applications last year, so if you applied for a credit card, that score was likely used to approve or deny you.

Using what’s known as trended data is the biggest change. The phrase means credit scores will take into account the trajectory of a borrower’s debts on a month-to-month basis. So a person who is paying down debt is now likely to be scored better than a person who is making minimum monthly payments but has been slowly accumulating credit card debt.

“This is a really big deal,” said John Ulzheimer, an expert in credit reports and credit scoring. Ulzheimer said taking trended data into account has long been considered by the credit score industry, but hasn’t been implemented on a meaningful scale. He expects more lenders to adopt it.

People with high credit scores may be affected the most, since the goal of trended data is to see warning signs long before a borrower actually gets into serious trouble.

“When it comes to prime borrowers, you may not have bad behavior on your credit file, but a trajectory provides very powerful information,” said Sarah Davies, a senior vice president for research, analytics and product development at VantageScore.

The change also shakes up the maxim that had people keeping open accounts they’d opened long ago. An important metric in calculating credit scores has been the portion of their available credit people are actually using. A person with $5,000 in credit card debt with a $50,000 limit across several cards could score better than someone with $2,000 in debt on a $10,000 limit because of that ratio.

Here’s what you can do to get the best Interest Rate deals

5 Key Websites

Credit.com
Shop for the credit card that’s best for you based on interest rate, rewards or other features. Also try cardratings.com.

Bankrate.com
The site lists the best and latest rates on mortgages, savings accounts, auto loans and other financial products from lenders nationwide.

HSH.com
Find calculators here that can help you determine the size of the mortgage you can afford and the cost of refinancing.

AARP.com
Check out more than a dozen AARP calculators and tools to help you manage your finances. Search for “Money Tools.”

MyFICO.com
The company that produces the widely used FICO credit score offers tips on how to improve your score to qualify for better credit terms.