Most of the time, we kind of just assume we have an idea of what our respective credit scores are. But the truth is we only find out when we really need to. That’s great for the time. But if someone actually wanted to maintain or life their score, doing it blindly isn’t the most effective way. You get three credit reports a year. My advice is to space them out over the year and don’t just use them in preparation for applying for a loan or buying a car. Use this data to maintain your score. It shouldn’t be an afterthought until its needed.

Here’s the breakdown. The great lies in the 700+ range. Then there’s the good. That one ranges from 699 to 680. The okay is in the 679 to 620 range. You aren’t going to be denied here, but the terms could get a little hairy. 619 to 580 makes you a bank brokers new best friend. This is the start of the bad. Here they are gonna kill you with expensive loans and get fat off hefty commissions. This still isn’t the ugly. The ugly starts at 579 and goes to 500. This means your credit reeks. If they offer you a loan here chances are you shouldn’t take it anyway. It will kill you in the long run. Then there’s the 499 and below. Here you may as well put a brown paper bag on your head with eye holes. No financial institution will look at you or your jaded score.

The credit score is prepared by taking into consideration payment history (35% of the rating); length of credit history (15%); new credit (10%); types of credit used (10%); and debt (30%). Income is never taken into account. A credit score isn’t the same thing as a credit report. The report is a detailed snapshot of your credit history used to show potential lenders the type of creditor you are. The information shown there is used to assign you that number: the credit score.

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We’ve all see those commercials with the three guys jamming out in mom’s basement, in the Geo Metro, at the pirate restaurant, and at the renaissance fair. Freecreditreport.com is the name of the site. That’s exactly what we’re looking for right? A credit report that costs us nothing. Too good to be true= fine print. Those dudes with their catchy songs about credit scores and their funny outfits and atmospheres were all smoke screens! “Monitoring with Experian begins within 48 hours of enrollment in your free trial. Monitoring with Equifax and TransUnion takes approximately 4 days to begin, though in some cases cannot be initiated during your trial period. You may cancel your trial membership any time within 9 days of enrollment without charge.” Whoa! The sites called freecreditreport.com. Capitalism at its best.

There are three main nationwide consumer credit reporting companies:

• Equifax: 1-877-576-5734; www.alerts.equifax.com
• Experian: 1-888-397-3742; www.experian.com/fraud
• TransUnion: 1-800-680-7289; www.transunion.com

You are entitled to one free report from each every 12 months under the Fair Credit Reporting Act. They can be requested all at once or spread out over the year. You can request your free report online, by phone or by mail. Visit AnnualCreditReport.com, call 1-877-322-8228, or fill out the Annual Credit Report Request form and mail it to Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281. It just goes to show, consumers are only as smart as advertisers allow us to be. There are organizations in this country that make millions off a service consumers can get for free. God bless America. Why? Well, it’s because research is too complicated and tedious and advertising is too expensive for the government to indulge in. Or maybe it’s because these companies generate money that the government then get a chunk of on the back end in taxes.

Hope this has been informative and will save a couple of you out there some change. I’m still going to enjoy those commercials though.

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“The hardest thing to understand in the world is the income tax.”
-Albert Einstein

The easiest way to answer this question would be: Somewhere deep in the 7^th ring of Dante’s inferno. But in all seriousness, it comes from a complex tax formula. For example, if an individual makes over $400 biweekly but not over $1,392 then you take 12.40 + 15% x Amount over 400. There are different ways of withholding, but that’s the simplest. When you start a job they have you fill out a W-4. The exemptions claimed, the number of kids you have, or if you are married all contribute to how much you get to wave goodbye to for Federal Tax Withholdings every time you collect your paycheck.

It’s not so bad considering you will see that money again; perhaps not in its entirety. Refunds are not always the way to go. I mean if you don’t claim so many exemptions, some of that money can go right into your savings and begin compounding interest. Get the right number of exemptions and keep them update them with your life situations and you won’t need to worry about your refund every year.

This year, The American Recovery and Reinvestment Act has a provision called “Making Work Pay”. This stipulation provides a refundable tax credit up to $400 for working individuals and an $800 one for married couples filing jointly. The credit is calculated at a rate of 6.2 percent of the earned income. This became effective as of 3/10/2009. Sadly the credit stops as the AGI (adjusted gross income) reaches excess of $75k for single people and $150 for those married.

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“No credit? Bad credit? Repossession? No Problem. Come on down!”

I hate to burst the bubble, but these guys at the shady car dealerships don’t have it right. Your credit history can determine everything: whether you get a good job, a decent apartment, a deal on your cell phone or reasonable rates on your insurance. Not to employ scare tactics, but a late payment, maxing out your credit cards or defaulting on a loan can haunt you for years. Building good credit in a safe way is a task that may take some time. There are steps involved too.

If you don’t already have one, establish a savings account. Lenders see this as a sign of stability. Starting out without a credit history, you may need to piggy back off someone else’s credit. Usually, parents or spouses are the co-signer. Remember any delinquencies on the account are going to be adversely affecting them and not you.

They used to tell college kids to stay away from those booths on campus. Well all saw them, the ones offering credit card to all. I signed up for a few just for the free t-shirt and them never used them or quickly cancelled them. Not exactly a good practice. But college is a time to build credit. So don’t avoid the booths. Just find yourself a card with a low APR and make your payments on time. Pay it off every month if you can. The credit card companies call these people, the ones who pay in full every month, “deadbeats”. Ironic, right? But I digress. Secured credit cards are always a good start. You can give yourself a limit in the amount of your deposit. So you’ll never have issues. Also, carrying a balance won’t hurt your credit and not carrying one doesn’t either. Just pay on time.

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Identity theft is the newest version of robbing your bank. But there is no FDIC help on it this go around.

“Innocent victims of identity theft sometimes do suffer losses. And if the crime is not detected early, people may face months or years cleaning up the damage to their reputation and credit rating, and sometimes they lose out on loans, jobs and other opportunities in the meantime.”

That’s really all they offer in the area of identity theft clean-up. Prevention is another story. Prevention is the jest of this post and this site.

It is baffling that individuals are so reluctant to recognize the pending threat. Just because you shove your head in the sand doesn’t elevate the problem. This is a call to arms people! In 2008, 10 million people were deemed victims of identity theft. That’s 22% more than the previous year. The degree of the felony varies from state to state as does the liability of the action. Restitution of the funds may not fix the credit history that you will have to deal with for the years to come. But if you protect yourself, the problem goes away:

• Protect your Social Security number (SSN), credit card and debit card numbers, PINs (personal identification numbers), passwords and other personal information.
• Protect your incoming and outgoing mail.
• Keep your financial trash “clean”.
• Keep a close watch on your bank account statements and credit card bills.
• Avoid identity theft on the Internet by using secure avenues like Paypal.
• Exercise your new rights under FACTA to review your credit record and report fraudulent activity.
• Make sure your financial institution has a no-liability policy

The breakdown for the stats behind identity theft is not pretty. About 10% of the entire population of the United States has had their identity “hijacked” to date.

Our goal at ProtectIdentity is to raise awareness with the hope that doing so will help to stop the rapid increasing of this hanis crime.

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