Consumer Protection | Business Protection

Medical Debt and Your Credit Score

April 14th, 2014

Ben here, AllClear ID Investigator. I am going to step away from ID theft and fraud and touch on a hot issue that is relevant to many of our readers. A lot of myths about medical debt on your credit file are out there circulated by local experts who swear they heard from someone that medical debt will not hurt you.  This thought, however, is a myth and the damage from medical debt is very real. It affects the majority of our population and can often come from a clerical error that could be fixed if caught in time. It is important to know your rights with collections agencies and what bills are being passed that could change how our medical billing and collection system is run.

Any collection item including medical debt can lower the FICO score by as much as 100 points. The good news though is that the FICO credit score now ignores collection items less than $100. The hard truth here is that once a medical bill is turned over to collections there is no difference between medical and other collection accounts. FICO does not distinguish between medical and non-medical debt and sometimes a single collection on a “prime” score can drop it by 105 to 125 points resulting in an “off-prime or “subprime” score.

What to Watch For

It is important to make sure the billing and insurance for your medical claims is completed properly. Mistakes are often made when someone gets overcharged or the insurance company fails to pay for a covered expense. Also, failure to receive a bill does not prevent the debt going to collections. Bills can be sent to the wrong address, or even sent after the debt already went to collections, causing damage before you even see the bill. If you have a debt you feel is a mistake, dispute it with the medical company and your insurance provider if they were supposed to take care of it.

You do have rights when it comes to the collections process under the Fair Debt Collection Practices Act or FDCPA, enforced by the Federal Trade Commission. A debt collector may not contact you before 8 in the morning or after 9 at night unless you have previously agreed to it. If you inform a collections group over the phone or in writing that you do not wish to be contacted at work, they must adhere to your request. You can submit a letter in writing to cease communication from a collector and at that time they would only be able to communicate to inform you of an action such as if they are filing a lawsuit or informing you they will no longer attempt to communicate with you. You should note this does not mean you no longer owe the debt and the debt collector can sue you to collect.

Even if you pay a bill in full, medical or non-medical, if it is reported as a debt in error, it will remain on your credit report for seven years. During this time, even when paid, the damage is still reflected on your score. Newer systems will ignore collections accounts lower than $250, however, most mortgage lenders use an older FICO model when evaluating applications.

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How Identity Theft Impacts Your Credit Score

January 29th, 2014

Jackie here. Most people are aware that identity theft can impact the credit of a victim by lowering their credit score and making it harder for people to get legitimate lines of credit. Let’s take an in-depth look at exactly how (and by how much) ID theft can impact your credit score. We found a great article from MSN Money that hits the key points—let’s take a look at some of them.

How does identity theft impact credit? Find out below:

Higher Debt to Credit Ratio

The amount you utilize your credit can have an impact on your score. For example if you have a $1,000 credit card and have charged $999, this is considered high credit utilization which can have a negative impact on your credit. Since ID theft may add new charges to your existing accounts it can increase the amount you have borrowed, leading to a higher debt to credit ratio.

Impact on your credit score: up to 45 points

New Accounts

Identity thieves may also your information to open new accounts, often with large balances that are never paid. This can have a huge impact on your credit, especially if you didn’t have any previous late payments listed on your report.

Impact on your credit score: up to 100 points

Inquiries

Businesses typically examine your credit during the credit application process. This typically only has a minor impact on your credit, but if done many times because of ID theft, this impact can add up. What’s more, many people often don’t think about cleaning up the inquiries after they remove fraudulent charges from their accounts, but this step is necessary as well. Inquiries can be more problematic for those with few credit accounts.

Impact on your credit score: variable

While ID theft can cause problems with your credit report, they are fixable. Check out this article on our blog for tips on fixing your credit. It will take time, but with diligent effort you can restore your credit after identity theft.

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Credit Score vs. Credit Report

August 26th, 2013

Allison here. The terms “credit score” and “credit report” are often used interchangeably, and it’s easy to get the two confused as they are similar. However, credit scores and credit reports not the same thing, so we wanted to offer a refresher course about the differences between the two. Here are the differences between a credit score and a credit report.

What’s the Difference?

The credit report is the overall picture of your credit history. This information is sourced from lenders, utility companies, and landlords. It includes your personal information, the types of credit you have, your credit balances, any new credit you’ve opened, and when you opened all the credit lines you have.

The credit score is simply the numerical value representing the information on your credit report. Oftentimes, the credit score will not show up on your credit report and you will have to pay to learn your credit score.

Places to Check Your Credit Score

There aren’t many places where you can simply check your credit score for free. Some websites, like those listed below, will provide an estimate. Most will give you your credit score for a fee. Unlike credit reports, there is no federal law mandating that you can receive your credit score for free.

Places to Get Your Credit Report

AnnualCreditReport.com is the only website federally authorized to provide consumers with free annual credit reports. However, there are a few legitimate sites that will provide you a free credit report along with a credit score estimate, no strings attached. They include: Bankrate.com, Credit.com, CreditKarma.com and CreditSesame.com. By law, everyone is entitled to a free credit report once a year from each of the three credit reporting bureaus: Equifax, Experian and TransUnion.

Related Links:

Why Your Credit Score May Be Wrong

A Consumer Resource: The Consumer Financial Protection Bureau

How to Dispute Errors on Your Credit Report

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Why Your Credit Score May Be Wrong

February 15th, 2013

Chris here, AllClear Investigations. The Consumer Financial Protection Bureau, or CFPB, has recently released a report addressing one of the most common complaints regarding credit bureaus: inaccuracies on consumer credit reports. While there are several different ways that inaccuracies can find their way onto someone’s credit report, the CFPB notes that some of the more common ones are: inaccurate information during the credit application process, incorrect match of a consumer to a certain credit file, or a lack of identifying information about a person from government records. Recent studies released by the U.S. Public Interest Research Group have shown that these types of errors may affect as many as 79% of consumer credit reports.

Not only are these types of errors extremely widespread, the credit bureaus methods of disputing and correcting them have proven largely ineffective. The typical process for consumers to correct errors on their reports are to: pull copies of the reports, locate the errors, and then file a dispute with the particular bureaus sighting the error and providing documents to back up your claim. However, the CFPB found that in nearly 85% of disputed claims, the evidence provided by consumers to support their claims is disregarded. This is largely due to the fact that the disputes are largely handled by computers and automated systems when they reach the credit bureaus.  The CFPB found that the disputes filed are picked up by the bureau’s automated system and given a code, which is then forwarded to the company that originally reported the error, However, the code does not contain the evidence provided by the consumer, which  can cause your claim to be invalidated and the error to remain on your credit report.

So how do you know if credit reporting errors are affecting your credit reports and scores? The first step is to pull copies of your credit reports through www.annualcreditreport.com. If you do find any errors on the reports, the next step would be to file a dispute with the individual credit reporting agency. This can be done online, over the phone or through the mail. All of these options are typically outlined on the credit reports themselves. The bureau then has 30 days from receipt of your dispute to address your claim. They will either deem it to be a valid claim and correct the error, or they will find it to be an invalid claim, which will result in the error remaining on the report. If the error remains on your report after the initial dispute, and you believe that you have sufficient evidence showing that it should be removed, then you can file a complaint against the bureau with the CFPB on their website (http://www.consumerfinance.gov/). The CFPB will contact the credit bureau, and assist with clearing the error and cleaning your report.

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A Consumer Resource: The Consumer Financial Protection Bureau

February 14th, 2013

Tamara here, AllClear ID Investigations. Are you having troubles obtaining your credit report or score or getting incorrect information removed from the file?  Is your credit report being used or shared improperly (you received marketing offers after opting out, or your report was provided to your employer without your written authorization)?

If you would like to file a complaint regarding the troubles you have had regarding your credit report, you’re in luck. The Consumer Financial Protection Bureau (CFPB) is here to help with this, among other things. Their central mission “is to make markets for consumer financial products and services work for Americans — whether they are applying for a mortgage, choosing among credit cards, or using any number of other consumer financial products.”

The bureau, set up by United States Senator Elizabeth Warren, began July 21, 2011. Under Director Richard Cordray, the bureau is working to educate the consumer, enforce Federal consumer financial laws, and study and analyze data to get a better understanding of the markets.

While there are many areas in which the CFPB is helpful, we are going to touch on credit reporting today. So, let’s say you answered yes to one of the questions above, or your quest to resolve your credit report has been so frustrating, you just want to give up. It’s time to file a complaint with the CFPB here. The complaint takes around ten minutes to complete, and asks you to provide  your contact information, the nature of your complaint, and provide any details or supporting documents regarding your case. The CFPB will then email you a confirmation that they have received the complaint, along with a complaint number, which you can refer to in the future to check the status of your complaint.

Once they have received the complaint, the CFPB will review the complaint and determine what the next steps should be. If the CFPB cannot help you with your specific complaint,  they will forward it to the proper Federal regulating agency. If more information is needed to process the complaint, they will request that you contact them to provide that. If you need to take further steps before the CFPB will forward the complaint, they will inform you exactly what those steps are.

When they deem the complaint legitimate, the CFPB will then forward it to the company you have filed the complaint against. Usually, the company responds within 15 days. Sometimes, it requests an extension, and has 60 days to respond. If you were having trouble getting a response from a complaint you filed with a company before, filing a formal complain with the CFPB is a great way to get that response you were looking for from the company.

In my line of work, I file disputes with the credit reporting agencies every day. I have turned to the CFPB in the cases where more assistance was needed, and have received positive outcomes with the CFPB’s help. So, if you’re having an issue with credit reporting, consider this step to get your dispute resolved.

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5 Free Ways to Protect Yourself from Identity Theft

December 5th, 2012

Allison here with AllClear ID. Some folks will tell you that spending money on identity theft protection services is a waste of time, and in some cases, they are right. There are effective ways to protect yourself from identity theft that don’t cost a dime, and one of them is our identity theft protection mobile app. This app will alert you if any aspect of your personal identification is stolen, and has a protection guide so you can be proactive about protecting your identity. If you don’t have an iPhone, or are looking for more ways to protect your identity, here are five other free ways to protect yourself:

  • Stop the Junk Mail: Yes, there are actually ways to stop the junk mail, and the result is similar to the Do Not Call list for telemarketers. Stopping credit card offers and direct mail involves registering online to an opt-out mailing list, but this only applies to insurance companies, credit card companies, and members of the Direct Mail Association. If you want to stop solicitations from other organizations, such as local businesses, alumni associations, political campaigns, and non-profit organizations, you have to contact them directly. It’s all a little old-school, but identity thieves still raid the trash for personal information and credit card offers they can use.
  • Get Copies of Your Credit Report: This is one that almost everyone is aware of, but it is still worth mentioning because people often forget to do it. Federal law states that every consumer is entitled to one free report copy per year from each of the credit report companies. You can either view the report online and print out a copy or request that a copy is sent to you in the mail. Although seeing it online is easier, you do have to answer a series of questions to verify your identity in order to get access, and that access only lasts for 30 days unless you create an account.
  • Check Your Employment History: Just like a credit report, an employment history report is also available for free. This report will let you know if someone else with the same name has a work history that may be confused with yours, or if there’s an alternate history that’s a result of identity theft (as some people do steal identities in order to get a job). Keep in mind that not everyone will have an employment history report, as it only exists if an employer (or potential employer) requested this information.
  • Check Other Specialty Reports: Your credit and your employment history aren’t the only things that are impacted by identity theft. Other information, such as medical records, driving records, bankruptcy filings, and public records of criminal or civil cases could also reflect the consequences of identity theft. The information in these specialty reports is also available for free under the Fair Credit Reporting Act. Employers, landlords and insurance companies access this information before choosing to do business with you, so it’s important to know what they are able to see.
  • Implement a Fraud Alert: If you suspect (or know) that your personal information is in jeopardy, then you can tell each credit reporting company to place a fraud alert on your file. This lets them know that you are a possible victim of identity theft, and now certain extra procedures must be followed in order for a credit account to be opened in your name. All it takes is a simple phone call or email to each of the companies, and you can place either an initial fraud alert (which lasts 90 days) or an extended fraud alert (which lasts seven years). You may still have to provide additional information to prove your identity and to demonstrate your identity theft risk, but there isn’t a charge to place this alert.

 

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How to Dispute Errors in Your Credit Report

November 26th, 2012

Jackie here. As you know, credit reports are often one of the first places that signs of identity theft appear. Your credit report can lend a lot of clues about the safety of your identity, from accounts that you didn’t open to balances that appear to be too high. If you check your credit report and everything looks good, you don’t have to worry and you don’t have to do anything. But, what happens if you find an error or a problem? What do you do next?

Under the Fair Credit Reporting Act, you are entitled to dispute errors in your credit reports. This means that should identity theft occur, you have the ability to fix it. Here are some tips for fixing problems in your credit report. Don’t forget: the process might be difficult, but it is vital to dispute any false accounts or claims.

  • Dispute with the Credit Bureaus- Many people make the mistake of disputing their errors with the creditor directly, not the credit bureau. Rather than simply contacting the creditor, also get in touch with the credit bureau as they are legally required to investigate your claim. If you have both the creditor and the credit bureau working on the error, you are more likely to get it fixed.
  • Compare All Three Credit Reports- Different companies report to different credit bureaus, so your file with TransUnion might not look the same as your file with Experian or Equifax. You are entitled to one free report each year from each of the credit bureaus. You are also entitled to additional reports if you are denied credit based on information in your report, if you’re unemployed and plan on starting a job search, or if your report is inaccurate due to fraud or id theft. Compare all three reports, looking for errors and inaccuracies in each. A problem might be hiding on one report and won’t be visible if you don’t look at all of them.
  • Get It In Writing- Rather than calling to report a dispute, send in a written letter. Include copies of any supporting documentation you may have. It is a good idea to create a file where you keep dated copies of all correspondence you send and receive regarding this matter. Once the credit reporting company receives your dispute, they will investigate and you will hear back from them, typically within 30 days. You should also send a written dispute to the creditor. It may be a good idea to pay extra when sending these requests off and get a return receipt so you have proof that the letter was sent and received. Online requests should also be avoided. When disputing errors, stick to the postal mail system.

For more information about disputing errors, check out this fact sheet from the FTC. We’ve also found a great article for you that talks about the 5 biggest mistakes people make when disputing errors.

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Behind the Scenes of a Credit Card Application

September 5th, 2012

Aaron here, with the AllClear Investigation team.  Credit is one of the first places identity theft is discovered, so knowing the status of your credit is an important step when thinking about applying for a credit card.  As easy as it is to apply, we recommend you not jump straight into the credit application process before reviewing your credit and taking care of any problems you may find.  This is important as every time you apply for a credit card the creditor does a “hard inquiry” on your credit report. Each time this is done, your credit score is lowered temporarily, so the best option you have is not to apply unless you are confident you will be approved. The standard hit to your credit score per inquiry is approximately 5 points, lasting for 6 months from the date of the inquiry.

Bad credit history – even as the result of identity theft – could make you ineligible for the credit cards that offer lower interest rates, higher limits, cash back offers, and other good benefits.  A lot goes on behind the scenes when you apply for a credit card, so review my recommendations below before applying for a credit card.

Know your Credit Score: Checking your credit score does cause an inquiry however it is what is called a “soft inquiry” which does not affect your credit score. Your credit score can range from 300-850 and is a result of your reported credit history. The lower your score, the higher the risk for creditors to decline you or may result in approval but with much less favorable terms. As for your credit history itself, there are three major credit bureaus to which is reported – Trans Union, Experian, and Equifax – who each hold an individual credit score based on five factors:

  1. 35 percent – Payment History
  2. 30 percent – Amounts Owed
  3. 15 percent – Length of Credit History
  4. 10 percent – New Credit
  5. 10 percent- Types of Credit Used

Each bureau usually has slightly different scores then one another, because each bureau may show slightly different information depending on the reporting practices of each creditor.

Pull Your Credit Report: Your credit report stores the information used to compute your credit score. Every consumer is entitled to one free credit report per bureau, per year. We suggest using only www.annualcreditreport.com to request your free annual credit report as there are no hidden fees – you only incur a cost if you want your credit score with it or have pulled the report in the past 12 months. We also recommend pulling 1 of your free reports every 4 months instead of pulling all 3 at the same time so you can review them for free throughout the year.

Clean Up Any Issues: If inaccuracies are found on any of your credit reports, you have the right to dispute it and each bureau has 30 days to respond. If the dispute is resolved in your favor, the information will be removed/updated on your credit report which can also result in an increase in your credit score. You also have the right to add a short  statement to your credit report (100 words or less) where you can explain any issues that may be contributing to your credit history.

Apply: Once you’re ready, know that a credit score of 650 and above will likely qualify you for credit cards that have lower interest rates and extensive benefits including cash back.  Shop around for the best card offer, including interest rate and perks, and once approved, use it wisely!

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Privacy Isn’t What It Used to Be

August 10th, 2012

Jackie here, with AllClear ID. The internet has really changed things from a privacy standpoint. While your personal data used to be relatively private, it has now become big business for data companies who sell your information to inquiring parties for just a few dollars a pop. This makes it ever increasingly difficult to keep your identity safe in an online era.

What Exactly Do Data Brokers Sell?

If you haven’t much to do with a data broker, you may not realize how much information is available and how low the prices actually are. This article on Paid Content discusses the economics involved with consumer privacy and data brokerage companies.

One of the data brokerage companies specifically listed in the article is known as Intellius. My only interaction with this company has been when I Googled a name and their results popped up in the search.  For no charge, you can find out a person’s full name, nicknames, age and relatives. A dollar or two will get you much more including their address, birth date and phone number. A full report (regular price $49.95) will include property records, criminal background check, a listing of bankruptcies, liens, lawsuits and judgments, information on their neighbors and even marriage and divorce records. Intellius isn’t the only company out there. Other data brokerage companies include: Ameridex, BeenVerified, LocatePLUS, People Search Pro, PrivateEye and many others.

What Can You Do?

Data brokers are in business to sell your personal information and as such, opting-out can be very difficult. But there are a few things you can do. The Privacy Rights Clearinghouse offers tips in their article titled, “Online Information Brokers and Your Privacy”. They recommend restricting the amount of information available about you. This means checking the privacy settings on social networks and other accounts, having an unlisted phone number, etc. You can also take action and let your representatives know how you feel about data brokerage companies. Finally, you can opt-out of many of these services.

How Do I Opt-Out?

Many data brokerage companies have options available to opt-out of their directories, but the process isn’t easy. Intellius – for example – requires you to complete an online form and verify your identity by providing a copy of your driver’s license or passport (or a notarized letter). Once your information is received, it takes 7-10 days to process and remove your information. That doesn’t mean you are done though. On their website Intellius notes:

“… please note that any time your identifying information appears in a public record in a manner which is different from the record you opted out, it will again appear in our system. (For example, if your address or area code changes your new information will again appear unless you opt out the new record.)”

If you want to opt-out, you will need to contact each data brokerage company individually to complete opt-out requests. Here is a list of some of the data brokerage companies provided by the Consumerist.

Data Brokerage Companies and the Law

Currently, data brokerage companies are completely legal – but that could change. Congress has recently opened an investigation into the practice. This article on the Washington Post explains more. Also check out our past blog post on Spokeo.

Identity thieves need information to prosper and since information is readily available at these data brokerage companies, they could potentially put your at an increased id theft risk.

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Credit Bureaus to Receive Supervision

July 26th, 2012

Jackie here, with AllClear ID. Things are changing for the credit bureaus due to new supervision requirements made the Consumer Financial Protection Bureau. This bureau will now be responsible for creating rules to govern the credit reporting industry and to monitor its actions. This will be in addition to the consumer protections already provided by the Fair Credit Reporting Act.

What Does This Mean For You?

The full impact of these changes won’t be known until they are fully implemented, but this change should help consumers and others to learn more about this often-misunderstood industry. The director of the Consumer Financial Protection Bureau, Richard Cordray, explained in a New York Times article that little is known about the credit reporting industry because they haven’t been subject to federal supervision before. Previously, the industry was monitored through Congressional oversight, but this change assigns a single federal overseer.

Another potential benefit relates to fixing incorrect information on credit reports. It is notoriously difficult to fix errors when you find them, due both to id theft and simple reporting mistakes. Hopefully these new changes will resolve some of the issues. The difficulty in resolving inaccuracies on credit reports is one of the primary concerns of the new oversight bureau in addition to the information sent to bureaus and how the credit reporting companies store the information they receive.

Here at AllClear ID, we know that identity theft can demolish an otherwise clean credit report. It’s our top priority to absolutely resolving and cleaning up those errors for you. We look forward to seeing how this change will impact the credit reporting industry and make it easier for identity theft victims to clean up their credit reports, and get their lives back.

Read more about the change in this article by the New York Times.

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How to Read Your Credit Report

May 18th, 2012

Jackie here, with AllClear ID. We’ve discussed how credit reports are a great free ID theft protection and detection tool, but if you haven’t read one before they can be a bit tricky to understand. Don’t worry, credit reports might seem confusing at first, but once you know what you are looking at, they are actually quite easy to read.

 

To Get Your Free Credit Report

The only authorized official source for your free annual credit report is AnnualCreditReport.com. Simply fill out the easy form and request your report. You are entitled to one free credit report from each of the three credit reporting agencies each year. You can get all three at once or take them one at a time, it’s your choice. Each credit bureau’s report will look a little different, but they all contain the same basic sections. Remember: each report can have different information, so it is important to review each of your credit reports looking for signs of identity theft or inaccuracies.

 

Sections on Your Report

  • Identifying Information- Near the top of your credit report you will find your identifying information. This will include your name, birth date and Social Security number as well as information about how long you have had a credit record with that particular credit agency.
  • Current/Past Addresses- This section will have your current address and any past addresses that have been reported to the credit bureau.
  • Employer Information- This section will have information on current and past employers.
  • Accounts- Pay attention when you review this section. Accounts that you haven’t opened or don’t recognize could be a sign of ID theft. Each of your credit accounts will be listed. Under each account you can find information about the amount you have borrowed and your total credit limit. Look at each account and make sure that the amount borrowed is similar to the amounts shown on your records. If you find inaccuracies or account fraud make a note and dispute them.
  • Credit Inquiries- Any time a creditor or potential creditor asks to see your credit report a note will be made on your record. Watch for inquiries from companies that you don’t recognize or that you haven’t authorized as this may sometimes indicate ID theft. As you review your credit report make notes of inaccuracies or fraudulent information. Any inaccuracies can be disputed. Here is some information from the FTC on what to do if you notice fraudulent information in your credit report.

 

Where is My Credit Score?

Many people think that their credit score is the most important part of the credit report, but when it comes to ID theft, score doesn’t matter. Your free reports from AnnualCreditReport.com won’t include a credit score. If you want to see your number you will have to pay extra. Looking for fraudulent accounts and credit inaccuracies is far more important than your actual numerical credit score. See, reading a credit report isn’t that difficult when you know what to look for. Head on over to AnnualCreditReport.com for your free report today.

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Fraud is a Problem at For-Profit Colleges

November 22nd, 2011

Juan here, from the AllClear ID investigation team.  For-profit schools (think University of Phoenix and Kaplan University) seem to have an unusual amount of student loan fraud compared to the standard, not-for-profit four-year colleges and universities. People who have attended for-profit schools have noticed that they have student loans in default or in collections that supposedly went to their school. Kaplan University is a big perpetrator. In fact, it has been linked to a federal investigation, and many state Attorney General offices have been filing complaints or investigation requests for it.

The fraud cases don’t have a specific geographic center, though I have noticed more cases in California, Nevada and Arizona. FAFSA student aid can be applied for and accepted online very easily. From the people I’ve spoken with, the fraudulent loans seem to have all stemmed from online applications. FAFSA only requires one to create a four-digit PIN to access applications and accept offers from its site. Read this New York Times story about one woman, sent to prison for forgery, who filed applications for financial aid and admission to Webster University on behalf of 23 unknowing inmates, and got the $467,500 in requested aid sent in the form of debit cards to the residential address she supplied.

It becomes incredibly difficult for a victim to prove he did not apply nor accept the offer, and these debts can be very large, going into the tens of thousands. Furthermore, the amount of companies that these student loans and debts can be passed through can make it rather difficult to track down the origin of a student-aid request, as well as who to work with to settle the matter.

FAFSA’s webpage seems to be the biggest problem. It is much too easy to create a PIN with three basic pieces of information – your name, date of birth and Social Security number. There is no credit check or verification done after submitting a request for a PIN. FAFSA’s site does have a disclaimer that entering false or fraudulent information will result in a $20,000 fine and/or jail time, but it does not appear to be enforced. Also, there are some cases where it seems like the loan officer at these schools is the perpetrator. The U.S. Department of Education seems to be getting more aware of identity theft scams and offers information about how to protect one’s student aid information and how to report scams at its MISUSED website.

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Why College Students Should Think About Identity Theft

November 16th, 2011

Vanessa here, with AllClear ID. The British government recently  surveyed college students in the United Kingdom about how they protected their online privacy. Ultimately, it found that most were failing to adequately protect themselves against the threat of identity theft.

A third of the surveyed students who had lived at a previous address while in school still hadn’t had their mail forwarded to their current address. Over three quarters of them hadn’t checked their credit score in the past year; two-thirds of them had never checked it, meaning they were totally unaware if their credit history was being compromised.

While that report is from across the pond, the results would probably be the same if that survey was taken here in the U.S.  As we’ve posted often on our blog, children and teenagers are being targeted by identify-theft scammers nearly as often as adults.  And college students can make easy prey for identity thieves because they are like blank canvases – their credit reports are mostly blank, so they can be easily used to secure new credit.

ScamBusters.org, a nonprofit focused on identity theft protection, offers some good advice for college students to protect themselves.

  • Keep your personal information under lock and key, and shred your old records. This is especially important if you have roommates, as they have easy access to your mail and personal documents, making it possible for them to sabotage or duplicate your identity.
  • Keep your computer information and access secure. If you’ve already shared a password with someone else, change it, and do so regularly.  Don’t choose a password that might be obvious for someone who knows you to guess.  If you’re using a public or school computer, make sure you log out of any online service or email account when you’re done.
  • Keep your personal and financial information confidential. Roommates, study partners and co-workers could learn a lot about you from your casual conversations. Don’t announce a new credit card or your PIN for ATM access to a group of friends. Don’t leave examples of your signature lying around. Details about your parent’s job or your sibling’s experiences should be kept confidential. Don’t leave a door open for later identity theft because of your willingness to confide.
  • Conduct personal business privately. Don’t jot down passwords or other private information where others can find them.  Lock up all your student loan and financial aid correspondence and other similar paperwork. Anything with your name, address, Social Security number, and phone number should be for your eyes only.

Read the rest of ScamBuster.org’s advice for college students to protect themselves. Also, be sure to check out the U.S. Department of Education’s advice on why college students should care about protecting their privacy.

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Does Your Credit Report Look Off? You May Have a “Mixed File”

October 26th, 2011

George here, from AllClear ID’s investigation team.

A very common error at credit bureau agencies is the addition of inaccurate information on a consumer’s credit card, meaning more and more accounts are being reported to the wrong credit report. That type of error is called file contamination, or a “mixed file.”

How does this happen? Very easily, unfortunately, and both creditors and the credit bureaus can be at fault. When creditors do a credit inquiry or collection agencies report an account to the credit bureaus, they don’t need a SSN, only a name and home address. Very common names have a higher tendency to be incorrectly associated with another person with the same name or a similar address. Examples are a Joe Smith who lives in Los Angeles, or a Bill Johnson Sr. and a Bill Johnson Jr. who live in the same town.

This means that if you find an incorrect variation of your name or a wrong address on your credit file, your file may be contaminated. In the case where negative accounts are reported, your credit score will take a dent through no fault of your own.  You may think fraudsters are plying identity theft when in fact it’s simply a credit reporting agency or one of your creditors making a clerical error.

If you have a common name, or you’re a Junior or Senior in your family, you must take precautions to just use one deviation of spelling your name. And be sure to obtain a copy of your credit report at least once a year or one to two months prior to applying for credit so you can catch and fix mistakes in time.

Check the personal information section of your credit report from all three credit bureaus (Equifax, Experian and TransUnion).  It should include your name and any other past versions of your name, including a marriage-related name change. If you have applied for credit in the past under a different name, and that name is not listed, it may be a warning that your file is split. If your report shows your name with a different middle initial, that should alert you that your file may be mixed with someone else’s.

Also check that all previous addresses are accurate. A listed address that you did not live at is a red flag that your file may be mixed. An old address that is not listed at all may also be a warning sign.

It’s important to check all three credit reports because creditors may not report to all of them; debts from smaller creditors may only be reported to one reporting bureau, while larger debts, such as home mortgages, are typically reported to all three.  And don’t forget, you have the right to a copy of 1 report from each credit bureau once a year, so you should be able to check for error for free.

A small difference in your credit scores from each credit bureau is normal; a big difference, more than 30 points or so, may be an indication your credit file is mixed.

If an AllClear ID customer discovers inaccurate information on their credit file, we prepare “blocking letters,” requesting the credit bureaus correct the information and provide the customer with an updated credit report. These letters are mailed to the credit bureaus via certified mail, paid by us, along with other pertinent personal documentation. After receiving a blocking letter, credit bureaus have 30 days to make the correction and respond to the customer.

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Car Shopping or House Hunting? Prepare for Multiple Credit Checks

October 11th, 2011

George here, from the AllClear ID Investigations Team. As an investigator, I work our customers’ cases and look out for identity theft scams that may be affecting a wide number of people.

I often talk to customers who ask me why multiple credit checks are being done on their credit report without their knowledge. I ask them about new or different things they’re doing outside of their usual financial routines. In many cases, the person tells me they’re shopping for a new car or thinking about buying a home. That’s when I realize what has been happening to them; credit inquiries are being done when a customer is car or house-shopping, oftentimes without the person’s knowledge or permission.

Let’s say you’ve starting the house hunt, and have looked at several houses but haven’t found the right one. In the meantime, your real-estate agency has likely run a credit check on you, as well as the mortgage broker you visited to talk about being pre-qualified for a loan.

Each credit check on your record can drop your score by about five points, and they’ll stay on your record for six months. If multiple credit checks are made in a short period of time, they will cause quite a dent, albeit temporary, on your credit score. Your score will bounce back up after that time period, but in the meantime, the credit score can be lowered significantly by multiple checks.

And these credit checks are done even if you just express interest in a car loan or home mortgage. What you may not realize is that by asking for a quote, you are authorizing your credit report to be pulled. A Social Security number is not needed for the inquiry; your name and home address is enough. So if you’re going to several dealerships or work with several real estate agents, your credit history will rack up a list of requests.

So if you are car shopping or house hunting, do a lot of research at home first. Determine what kind of car you want or what home type and neighborhood you want to move into, then  figure out which car dealer or real estate agent you want to work with to seal the deal. By working with just one entity, you’ll significantly lower the number of credit inquiries. Or if you do want to shop around, be blunt: Tell the car dealer or realtor not to check your credit without your express permission.

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