My bank informed me it is possible my security may have been breeched. I am keeping a close look at all of my accounts, but am concerned because I am retired and live on a fixed income. Also I am hoping to sell my house and move into a retirement community in Florida. I don't want a bad credit report to keep me from being able to buy a condo. I have heard about websites that offer free credit reports. Are these safe and reliable? Are they really free? Would like to learn any other ideas about securing my credit standing. Thanks
Joe, it is wise that you are scrutinizing all of your accounts. Everyone should do this, even if they do not suspect a problem. And checking your credit report is crucial. The highest credit score is 850, but most people's scores do not reach those heights. Each lender has their own way of interpreting the score. Most lenders agree that any score above 750 is considered excellent, scores around 650 are fair and scores under 600 are considered poor. The closer you are to a 750 score, or above, the more likely you will be approved to buy your condo and pay lower interest rates. Everyone should review their credit reports annually. Each year you can receive a free copy of your credit report from www.annualcreditreport.com. There are a number of other websites that say you will receive a free credit report, but if you have to provide a credit card to get a free report then it is not really free. Only www.annualcreditreport.com provides ‘free and no strings attached’ reports. Reports are provided from the three major credit reporting agencies (Equifax, Experian and TransUnion). Once you have your reports in hand, verify the reports and determine if there are inaccuracies. Clear up anything that is not correct by contacting the credit reporting agencies with the correct information. Inaccurate information can cause you to be denied credit or pay a higher interest rate.
Kimberly J. Howard, CFP from KJH Financial Services
Something else to consider Joe. Every time you take out a credit card or cancel one it can have a major affect on your credit rating. Most people don’t realize this – I didn’t. I signed up for 3 different credit cards because they were offering free airline miles, basically a free ticket for keeping each of the cards for a year. I never even used the cards after the first initial purchase to activate the cards, and I paid the bills immediately. I couldn’t believe that just signing up and canceling these cards would so negatively impacted my rating. And there doesn’t appear to be anything I can do about this… but if someone has an idea, please let me know.
Learn from my mistake. My husband handled all of our finances. After he died I found out he had not been paying off our credit card bills. My being delinquent in paying these bills harmed my credit rating, which resulted in my being turned down for a home improvement loan. Understand your accounts, don’t let your spouse take control of all the banking, and have at least one credit card in your name, separate from your spouse’s. Also, open all bills immediately and pay them, or if necessary dispute them, so you don’t get a black mark on your credit rating.
For many of my clients, I recommend putting a credit freeze on their records. Most states have enacted statutes that allow customers to block businesses and others from looking at their credit report without permission. This helps to stop would-be thieves from taking out credit cards or loans with stolen identity. In Georgia, where I live, the cost to freeze or unfreeze your credit is $3, and free if you are over 65. Check with your state laws.
It is a fairly simple process and can be done on-line. One thing to remember is that if you are planning to apply for a mortgage or a credit card and need to have your credit checked, you will need to unfreeze your credit. You can put a temporary "lift" on the freeze and pay the $3 fee or whatever your state has determined the fee to be.
Contact information for the 3 reporting agencies is:
Equifax: Eqiifax Security Freeze, PO Box 105788, Atlanta, GA 30348
www.equifax.com (look for "Security Freeze" under "Fraud Alerts & Freeze")
Experian: Experian Security Freeze, PO Box 9554, Allen, TX 75013
www.experian.com (look for "Security Freeze" link under "Notices")
TransUnion: TransUnion Security Freeze, PO Box 6790, Fullerton, CA 92834
www.transunion.com (look for "Security Freeze" under "Identity Theft")
Yes, there are many websites that provide free credit reports but you have to enquire whether that site offers an accurate credit report or not. Accuracy of a credit report all depends upon the bureau you are getting report from. Credit report includes your personal information, information from public records, collection agencies, and creditors. So getting report from a trustworthy agency is a must. I get my credit report at Freecreditreport.com