Credit Cards

Beware of Annual Credit Report Scams

October 5, 2015 By Alexa Mason Leave a Comment

Credit scores have a major impact on the day-to-day lives of consumers. They determine if you can rent an apartment, how much you will pay to borrow money and if you can purchase a home. The contents of your credit card used to be a mystery that only lending officers had access to. To aid consumers, the government required credit bureaus to allow consumers access to the contents of their credit reports.

The government requires that credit bureaus provide consumers with a free copy of their credit report once per year. The three credit bureaus Equifax, Experian, and TransUnion have created one site to meet satisfy this requirement.

What s an annual credit report?

The annual credit report is the free copy of their credit report that every consumer is entitled to once per year. It shows all the information that is in a consumer’s credit report. The annual credit report does not provide a credit score, but it does provide the information that is used to calculate your FICO scores.

The website that the three credit bureaus created to fulfill the government mandated reporting is Annualcreditreport.com. It provides one copy of the your credit report from each of the three credit bureaus one time per year. You can download all three copies at the same time or download one report from each credit bureau at different times during the year. There are some exceptions that will allow a consumer to receive more than one copy of their credit report during the year. For example, if you are denied a loan based on your credit score, you can receive a copy of your credit report.

Common Annual Credit Report Scams

Scammers have capitalized on the opportunity to take advantage of unknowing consumers. Here are some ways to avoid common annual credit report scams.

Avoid Imposter Sites

There is only one legitimate annual free credit report website. If the URL is not annualcreditreport.com, it is an imposter site. Do not enter your personal information into an imposter site. You will put yourself at risk for credit card fraud and identity theft.

Do Not Enter Your Credit Card

The annual credit report is free and will never ask you for a credit card to access your free report. It does not provide a credit score, but there are sites that offer a free credit score. Legitimate free credit score sites like Credit Karma and Credit Sesame do no require a credit card to open an account. A website that offers a free service and asks for a credit card before you can sign in is a warning sign. Do not enter your credit card on a website that claims to offer a free credit report.

There Is No Quick Fix For Your Credit Score

The only way to improve your credit score is to make good financial choices over time. Removing errors will give your score a quick bump, but there is no quick fix to your credit score. If a company claims that they can dramatically improve your credit score right away, be wary. It is most likely a scam.

5 Ways to Avoid Credit Report Scams

October 5, 2015 By Alexa Mason 1 Comment

Millions of people have signed up for free credit reports and credit monitoring with respected sites like Credit Karma and Credit Sesame. Although there are several respected sites that will provide free credit reports, there are also a lot of credit report scams online. Here are 5 ways to avoid getting caught by a credit report scam.

Do Not Click on Email Links

Phishing emails look legitimate and can be very convincing. If you are a member of Credit Karma and receive an email telling you to click on a link to access your account, don’t do it. Instead, go to the Credit Karma website yourself and log in. If the message was legitimate, you will see it when you log into your account on the website. Phishing emails also commonly use banks and PayPal as a cover to get your personal information. For security, it is better to make a habit out of going directly to the website instead of clicking on an email link and risking your personal information.

Check the Domain Name

Scammers will often send an email claiming to be from a legitimate site. Or they will purchase a domain name that is similar to a legitimate site’s domain name. Check the domain name the email comes from to verify that it is legitimate. Also, remember that government entities usually send notices by mail. They rarely send information via email. A common scam is an email that claims you owe the IRS money. The IRS will never send you a demand notice by email. If you are in doubt, phone the agency or go directly to the website to login instead of clicking on a link.

Do Not Enter Your Credit Card

Legitimate free credit score sites like Credit Karma and Credit Sesame do no require a credit card to open an account. The free annual credit report is really free and will never ask you for a credit card to access your credit report. A website that offers a free service and asks for a credit card before you can sign in is a warning sign. Do not enter your credit card on a website that claims to offer a free credit report.

Avoid Imposter Sites

There is only one legitimate annual free credit report website. If the URL is not annualcreditreport.com, it is an imposter site that could potentially steal your credit card information or steal your identity. Do not enter your personal information into an imposter site.

There Is No Quick Fix for Your Credit Score

Consumer are more aware of the importance of a good credit score than they were in the past and many people are taking a much more active approach to monitoring their credit score. Unfortunately, scammers see this as an opportunity. Be alert and protect your identity.

Is Credit Sesame a Scam?

October 5, 2015 By Alexa Mason 3 Comments

Credit Sesame’s mission is to find the best way for you to manage your credit and loans and to save money and build wealth. To achieve its mission, Credit Sesame offers free credit monitoring and reporting services to consumers.

Credit Sesame members receive one free credit score per month and are able to monitor their credit report for free. Consumers who sign up for Credit Sesame also receive free identity theft protection insurance.

Is the credit score on Credit Sesame really free?

Yes, the credit score is free. Credit Sesame does not charge consumers for a copy of their credit scores. Credit Sesame does recommend loans and credit cards based on your credit score and earns a fee from banks for recommending their products.

Some companies offer you a free credit score, but require your credit card number when you register. They then charge you a monthly fee for keeping your account. Credit Sesame does not do that. They do not ask for your credit card to open an account.

Does Credit Sesame give your actual credit score?

The credit score you receive from Credit Sesame is not the FICO score that lenders see when they pull your credit report. Credit Sesame gives you a score from Trans Union that is similar to your FICO score and tracks along the same trajectory as your FICO score. An increase in your FICO score will show as an increase on the Credit Sesame score.

There are three credit bureaus that track you credit score. Not all lenders report to all three credit bureaus so the information on your credit report will vary between the three credit bureaus and your credit score will vary between the three credit bureaus. There is no one actual credit score. Everyone has different credit scores based on the credit bureau reporting the score. The score your receive from Credit Sesame is close to the credit score a lender will see.

What is credit monitoring?

Credit monitoring tracks changes to your credit report. It sends you an alert if a new credit inquiry is reported or there is any change to your credit report. Being aware of changes to your credit report helps protect you from identity theft.

Is it safe?

Credit Sesame needs your social security number to sign up. Once you sign up, Credit Sesame tracks your credit score and debt over time so you can see the change. But is it safe? Yes, Credit Sesame uses the same encryption methods as banks. Credit Sesame does not sell your personal data or share it with advertisers, employees or third parties.

Credit Sesame actually provides free identity theft protection. All Credit Sesame members have $50,000 worth in insurance for protection from identity theft.

Is Credit Sesame a scam?

Credit Sesame is not a scam. User data is securely stored and not shared. Millions of people have benefited from monitoring their credit score with Credit Sesame and other services like Credit Karma. They have also saved on loans using the products recommended by Credit Sesame. If you are looking for a way to monitor your credit score and learn more about improving your score, Credit Sesame is a valuable free resource.

Are Free Credit Reports a Scam?

October 5, 2015 By Alexa Mason 1 Comment

There are several companies that offer free credit reports. Credit Karma and Credit Sesame are two popular free credit report companies. So… are free credit reports a scam?

Credit Sesame members receive one free credit score per month and are able to monitor their credit report for free. Credit Karma members receive credit score updates weekly and also are able to monitor their credit report for free.

Is the credit score on really free?

Yes, the credit score is free. Credit Karma and Credit Sesame do not charge consumers for a copy of their credit scores. They do make recommendations for loans and credit cards based on your credit score and earn a fee from banks for recommending their products.

Some companies offer you a free credit score, but require your credit card number when you register. The company then charges you a monthly fee for keeping your account. Credit Karma and Credit Sesame do not do that. There is no risk of being charged in the future because they do not ask for your credit card to open an account.

Is it your real credit score?

The credit score you receive is not the FICO score that lenders see when they pull your credit report, but the score is similar to your FICO score and tracks along the same trajectory as your FICO score. An increase in your FICO score will show as an increase on the Credit Karma and Credit Sesame score.

There are three credit bureaus that track you credit score. Not all lenders report to all three credit bureaus so the information on your credit report will vary between the three credit bureaus. Your credit score will vary between the three credit bureaus. There is no one actual credit score. Everyone has different credit scores based on the credit bureau reporting the score. The score your receive from Credit Sesame is close to the credit score a lender will see.

What is credit monitoring?

Is it safe?

Credit monitoring websites need your social security number to sign up so they can pull your credit report. Once you sign up, they track your credit score and debt over time so you can see the change. But is it safe? Yes, they use the same encryption methods as banks.

Credit Sesame does not sell your personal data or share it with advertisers, employees or third parties. Credit Sesame actually provides free identity theft protection. All Credit Sesame members have $50,000 worth in insurance for protection from identity theft.

There are fraudulent services online that offer you a free credit score, but either charge you for the score or sell your personal information. Credit Karma and Credit Sesame are not a scam. User data is securely stored and not shared. Millions of people have benefited from monitoring their credit score with Credit Karma and Credit Sesame. They have also saved on loans using the products recommended. If you are looking for a way to monitor your credit score and learn more about improving your score, make sure you sign up with a reputable services.

Money Management Skills Everyone Should Have

October 4, 2015 By Danielle Warchol Leave a Comment

Have you ever heard people talking about the skills you need in order to get a job? Or maybe you’ve seen lists of skills you should have in order to pursue a certain hobby. Well, having a certain set of skills in order to improve your finances is no different. While there are many skills that will help you improve your financial state, here is a quick list of some must have financial skills that will not only help you out in everyday life, but will definitely help when it comes to handling your money:

Basic Math and Accounting

Of course, basic math or accounting skills will greatly help you manage your finances. While a lot of people don’t know how to balance a checkbook these days, it’s still an important skill to learn. Basic accounting skills allow you to draw up budgets and set up net worth tables, which you will need to get an accurate picture of your cash flow and wealth. You probably should also learn to do complex math in your head. a At a bare minimum, you will want to learn to calculate compound interest and estimate expected monthly payments on a loan given the principle and interest rate. This is especially important when deciding between two loan options.

Organization

If you want to keep track of how much money you spend or what you’re spending money on, it’s important to stay organized. Keep all your receipts, bills, and financial statements in file folders so that you have easy access to them if a problem or question arises. You should be keeping all of these items anyway, but keeping them in an organized file cabinet or file folder will help you out in the long run. This is also important because your major financial expense is likely to be income taxes. You’ll want to have good records so you can minimize your taxable income and therefore the amount you need to pay in taxes.

Ability To Prioritize

If you have a lot of bills to pay or financial issues to take care of within any given month, the ability to prioritize is an important skill to have. For instance, if you’re having trouble coming up with enough money to cover all your bills one month, you need to prioritize how you spend your money and which issue is the most important (such as paying the heating bill instead of the cable TV bill). Hint: pay your rent or mortgage first.

In addition, a large part of successful personal finance is goal setting. You probably have limited resources and will need to decide how to allocate your resources. In this case, think focus. Maintaining a tight focus on achieving one single goal greatly increases the chances that you will get there.

Decision Making

Decision making skills are also very important when it comes to improving your finances. You may need to decide how to eliminate excess spending or how to prioritize your spending habits. Your financial decisions can be stressful, so it’s important to be able to make good decisions about your money. One way to do is is to make a list of all the advantages and a list of all the advantages of a particular course of action. If there are more advantages than disadvantages then your decision is clear. Don’t make any major decisions if you are tired, in an emotionally agitated state or under the influence of drugs or alcohol.

Analytical

Have you ever tried to read the fine print on a credit card statement or a loan statement? Maybe you’re singing a lease for a new home or apartment and are struggling to understand the legal language on each page. Maybe you don’t know whether a 23% interest rate over a five year period is better than a 15% interest rate over a two year period. Having strong analytical skills will help you determine whether certain financial deal or situations are beneficial or not.

Problem Solving and Interpersonal

Problem solving is also another key skill that will help improve your finances. You might need to take action if you suddenly notice a charge on your credit card statement that you don’t remember making. Or you may need to solve the problem of how to reduce your debt or how to finance a house or car. Having strong problem solving skills will help you out if you ever find yourself in a tricky financial situation. Problem solving is key because a lot, if not most, financial decisions involve more than one person and often involve important deeply values such as safety or security.

Research

Research skills are incredibly important because you always want to research various loans, credit cards, banks, or products before deciding on anything. What happens if you decide to go with one credit card only to find out that you could have been approved for a different one with a lower interest rate? Having strong research skills will help you determine what financial choices and solutions are best for your situation.

Communication

Good communication skills will help you discuss the terms, conditions, and any problems that arise with any of your financial accounts. While strong communication skills may not be the most important skill to have when it comes to improving your finances, they’re still an important skill to have regardless. For example you may need to call to reduce your credit card rate and having good communication skills can help you have a pleasant interaction with the customer service staff you deal with.

Self-Discipline

Are you an impulse spender? Do you have trouble saving money? Do you have a habit of buying items you already have? Not having self-discipline can be detrimental to your finances. A lot of people blame their financial problems on their lack of self-discipline. Having self-discipline can stop you from making unneeded purchases or straying from your financial goals or plans.

Technology

In this day and age most people use technology to maintain their finances. Whether it’s paying bills online or signing up for loans or credit cards through an online server, you need to be savvy about how to use technology. This is especially important because a lot of new exciting applications are being developed exclusively for smartphones and internet in silicon valley. Notable examples of this trend are companies like Loyal3 and Robinhood. Both of which are leveraging technology to offer stock trades at zero cost. Being technologically savvy will definitely help improve your finances and give you access to services that brick and mortar shops can’t offer.

For more on this, please check out our articles on five money management skills that can help you save money and key skills needed for personal finance.

Does Your Annual Credit Report Include a Fico Score?

September 27, 2015 By Alexa Mason Leave a Comment

Your credit score has a major impact on many parts of your life. Credit scores determine everything from the interest rate you will pay on a loan to whether or not a landlord will rent you an apartment, to whether or not you can get the cell phone plan you want. Unfortunately, credit scores are not always accurate and consumers must monitor their credit reports for errors.

So, does your annual credit report include a FICO score? Answer? No, but you get all the information that is used to generate your FICO score.

What Is a FICO Score?

FICO, a product of the Fair Issac Corporation, is the credit score that 90% of lenders use to make credit decisions. There are three credit bureaus that report FICO scores: Transunion, Experian and Equifax. You will often have three different FICO scores, one with each credit bureau. The score difference can range from a few points to 100 points depending on the information the credit bureaus have. In addition to three credit bureaus with different scores, there are 19 different FICO scoring models commonly used by lenders.

Your FICO score is based on five categories. The categories are not given equal weight in calculating the score. The categories and weights are:

35% – Payment History

30% – Amounts Owed

15% – Length of Credit History

10% – New Credit

10% – Types of Credit in Use

What Is an Annual Credit Report?

The annual credit report is mandated by the government. Every consumer is entitled to one free copy of their credit report per year that shows all the information in their credit report. The annual credit report does not provide a credit score, but it does provide the information that is used to calculate your FICO scores.

FICO Score vs Annual Credit Report

Number of Reports

There are many companies that offer your credit score, but myFICO.com is the only company that provides the actual credit score that lenders see. myFICO.com provides scores from all three credit bureaus and the most commonly used 19 FICO scoring versions.

Annualcreditreport.com provides one copy of the your credit report from each of the three credit bureaus.

Frequency

A subscription to myFiCO.com provides credit reports and score updates every quarter.

The annual credit report provides a copy of your credit report once per year. There are exceptions where you can receive more than one copy of your credit report. For example, if you are denied a loan based on your credit score, you can receive a copy of your credit report.

Cost

A subscription to myFICO.com costs $29.95 per month. There are other companies that offer access to your credit scores for a lower monthly fee, but they do not provide all 19 versions of your score and may not be the true FICO score. Credit Karma offers a free credit score, but it is not the FICO score. So, pretty much if you want your FICO score, you will have to pay for it. Sometimes however if you are applying for a mortgage or car loan, the lender might choose to share the FICO score with you for free during the application processes.

The annual credit report is free.

Is FICO Better Than Annual Credit Report?

It depends on why you are checking your credit. If you want to make sure that there are no errors, the free annual credit report is a better option because you can see all the information on your credit report at no cost. The FICO score is better if you are planning on making a major purchase, such as buying a home, and want to know your credit score before applying for a loan.

Regardless, it makes good sense to utilize the free annual credit report – after all, it never hurts to keep an eye on your credit!