Most Americans know the basic principle of checking their credit reports once a year. Every US citizen can now get a ...Please sign up or login to see the link... every year to ensure everything is right on their accounts. However, that’s the extent of most of our knowledge, and only addresses one facet of identity theft (financial institutions). It turns out there are a number of other preventative measures that can be taken, especially if you’re the paranoid type.

Protect against spyware and malware. Seriously.

Electronic theft may not be the most common, but it’s the fastest growing, as noted by ...Please sign up or login to see the link... CEO Scott Mitic. (The most common form of ID theft is still via people in your life who have physical access to your stuff—family, friends, your cleaning lady, your waiter, etc.) Still, theft via computer is one of the fastest growing areas and protecting against it is extremely simple. “Go online and find one of the many different companies that provide anti-spyware protection, which everyone should have,” Mitic told Ars.

Indeed, many companies even offer free software to do so, such as McAfee’s free ...Please sign up or login to see the link... plugin that aims to prevent users from being phished or forced to download malicious software. And, as always, practice safe file and link opening practices from your e-mail: only open files that you are expecting from people you trust, and if you’re ever suspicious of a link from somewhere like PayPal or your bank, it’s always safest to go to your browser and type in the URL yourself to log in instead of clicking from an e-mail.

Fraud alerts are your friend

People are often advised to place fraud alerts on their files with the credit bureaus after someone has stolen their information, but how often are you told to do it before? As it turns out, paranoid types do it all the time, and it’s not such a bad idea either. There are two steps to this: putting a fraud alert on your credit reports, and putting a freeze on your credit. “These two mechanisms work in similar ways—someone cannot simply get your name and address and apply for credit in your name, because lenders must check with consumer first when these freezes are in place,” Mitic said. “These are highly effective ways of reducing most of the most dangerous forms of identity theft.”

Of course, if you’re the type who regularly applies for those department store credit lines to get a discount on your purchase, or you’re about to apply for a time-sensitive loan (such as a mortgage on a house), this may be something you’ll want to hold off on. However, if you don’t usually open up many new credit accounts or if you have had a close call with ID theft, it may be a good idea.

Check for your kids

Children’s identities are currently going for a premium, it turns out. And, because most people don’t think to check up on their kids’ credit reports, the use of their IDs can go on for years (or sometimes even decades) before it ever comes to light. “Consumers and parents should be checking their children’s info by going to the three credit bureaus once per year and inquiring as to whether or not there is a credit report,” Mitic said. In this case, no news is good news, but if your kid is only 5 and has a report, there could be a problem.

Another way to check on your kid’s identity is to request a yearly summary of his or her earnings from the Social Security Administration. Obviously, if your child is too young to work, there shouldn’t be any earnings. But, as Mitic pointed out, undocumented workers might get a job with a stolen social security number and, if it’s a child’s, might be able to use it for many years. If that happens, though, the earnings will be reported on the yearly summary, so it’s a good way to make sure things are clean for your child (and you, as well).

Think about your medical identity, too

“What many people don’t realize is that their medical insurance is valuable to those who don’t have insurance,” Mitic said. Your name, address, and insurance information can easily be used by fraudsters to get medical treatments in your name. This is the most serious if someone has used your insurance already for treatment in a life or death situation. “If you end up in the hospital with a split appendix and doctors look at your medical charts, they might think it’s not an appendix problem because you’ve already had yours removed.”

Okay, so that’s an extreme case, but it could still happen. “Half a million to a million people per year are paying for medical procedures that are not theirs,” Mitic warned. (Ouch.) A good idea in this case would be to contact your insurance company once per year to ask for an annual disclosure of benefits processed in your name. This document will show every claim processed for you and you can examine it to make sure every item is legit.

Oh social networking, you minx

We already know that social networking sites can pose a threat to ...Please sign up or login to see the link... thanks to the ...Please sign up or login to see the link..., but it’s also a good medium to steal people’s identities and scam “friends.” According to Mitic, there have been repeated incidents of people getting messages from friends describing extreme circumstances like a car accident and asking for money.

“Employ a reasonable level of suspicion when someone who is not standing immediately in front of you is asking you for anything,” he said. “That’s especially true in this era of social networking. The message that seems to be coming from your friend may not be coming from your friend.”

Similarly, ensure that your own accounts don’t get hacked or stolen by employing best practices when determining your passwords, and of course, don’t share your password information (or your secret questions!) with anyone.

Conclusion

The rabbit hole is pretty deep when it comes to little things you could do to protect yourself from identity theft, but these basic steps will help mitigate the large majority of situations. If there’s one thing that could be improved upon, it’s the fact that each individual entity must be dealt with if you end up finding something fishy—if you find something on your credit report, you must deal directly with the credit agencies and financial institutions. If you find something on your insurance, you must deal with your insurance company and hospitals involved. If it’s a case of social security fraud, you have to deal with the Social Security Administration to sort it out. Aside from this inconvenience, though, it’s not hard to keep regular checks going on various parts of your life to make sure someone else isn’t pretending to be you.

As with most things , it is about having the right knowledge. I started www.nustart720.com to give you the knowledge and information to help you improve your credit score and overall credit worthiness.

There are no quick fixes when it comes to improving your credit, but there are some tricks of the trade that could create an immediate impact on your financial future.

As a member you will receive our exclusive “Credit Expert Interviews”, a series of monthly interviews with nationally know credit and financial experts.

A source of information and updates on credit and finance to help you improve your financial future.

Other exclusive offers , only available to members.

So join today and get on the path to better credit!

1. Payments, not prices: The plan centers on the belief that struggling borrowers will stay in their homes—even as values decline sharply—as long as they can make their monthly payments
. Although not everyone agrees with this, billionaire investor Warren Buffett endorsed the philosophy in his most recent letter to shareholders. “Commentary about the current housing crisis often ignores the crucial fact that most foreclosures do not occur because a house is worth less than its mortgage (so-called “upside-down” loans),” Buffett wrote. “Rather, foreclosures take place because borrowers can’t pay the monthly payment that they agreed to pay.”

2. Thirty-one percent: To that end, the administration’s plan requires participating loan servicers to reduce monthly payments to no more than 38 percent of the borrower’s gross monthly income. The government would then chip in to bring payments down further, to no more than 31 percent of the borrower’s monthly income. In lowering the payment, the servicer would first reduce the interest rate to as low as 2 percent. If that’s not enough to hit the 31 percent threshold, they would then extend the terms of the loan to up to 40 years. If that’s still not enough, the servicer would forebear loan principal at no interest. The plan does not, however, require servicers to reduce mortgage principal, which Richard Green, the director of the Lusk Center for Real Estate at USC, considers a shortcoming. “For underwater loans, if you don’t write down the balance to be less than the value of the house, people still have an incentive to default,” Green says. “Writing down the principal first instead of last—which is what [the Obama administration is] proposing—makes sense to me.”

3. Cash incentives: To encourage participation, servicers will be paid $1,000 for each modification and will get an additional $1,000 payout each year for as many as three years, as long as the borrower continues making payments. Borrowers, meanwhile, can get up to $1,000 knocked off the principal of their loan each year for as many as five years if they make their payments on time. Neither party can receive the cash incentives until the modified loan payments have been made for at least three months.

4. Financial hardship: The Obama administration is pitching its plan as an effort to help responsible homeowners ensnared in the historic housing slump and painful recession—not speculators. As such, only owner-occupied, primary residences with outstanding principal balances of up to $729,750 are eligible. Occupancy status will be verified through documents, such as the borrower’s credit report. In addition, the program is designed to target homeowners who are undergoing “serious hardships”—such as a loss of income—which have put them at risk of default. To participate, borrowers will have to sign an affidavit of financial hardship and verify their income with documents. “If we would have had such stringent verification over the last four or five years, we probably wouldn’t be in as bad a position as we are in,” says Richard Moody, the chief economist at Mission Residential. But while Moody has no objection to such verification, obtaining documents from so many homeowners could be an onerous effort. “It’s going to be a very time-consuming process,” he says. Only loans originated on or before Jan. 1, 2009, are eligible, and modified payments will remain in place for five years. Now that the administration’s plan is out, lenders are free to begin modifying loans.

5. Net present value: To determine if a particular mortgage will be modified, the servicer will perform a so-called net present value test. The test compares the expected cash flow that the loan would generate if it is modified with the expected cash flow it would generate if it isn’t. If the modified loan is expected to produce more cash flow for the mortgage holder, the servicer is to restructure the loan. Howard Glaser, a mortgage industry consultant and a U.S. Department of Housing and Urban Development official during the Clinton administration, called this component of the plan “clever,” arguing that it would work to ensure broad participation. “When you apply the formula, the loans that are modified are the ones that are in the best economic interest of the investors to modify,” Glaser says. “The federal subsidy for the payment on the modification…tips the scale toward modification as a better deal for the investor.”

6. Second liens: The Obama plan also addresses the issue of second liens—such as home equity loans or home equity lines of credit—by offering incentives to extinguish them. But key details on this component of the plan remained unclear. “Distinguishing the second lien is really important,” Green says. “[But] exactly how they are going to convince the second lien holder to do this is not clear to me at all.”

7. Will it work? Moody argues that while the plan may reduce foreclosures for primary residences, it could lead to a spike in defaults for another group of homeowners. Although he supports the administration’s efforts to focus the initiative on primary residences, Moody notes that “it could be the case that a lot of [real estate speculators] have been just hanging on waiting to see exactly what the details are of this [plan],” Moody says. Now that it’s clear the Obama plan leaves speculators out, “we could actually see a spike in foreclosures or at least mortgage defaults among this group.”

Glaser, meanwhile, worries that lenders may soon be overwhelmed by inquiries from homeowners looking to participate. “Starting today, millions of borrowers are going to start to call their lenders to see whether or not they are eligible,” he said. “And I’m not sure that the financial services industry has the capacity to handle these inquiries.”

So what hasn’t changed? Read on…

Arbitrary Credit Limit Decreases Are Still Perfectly Legal – According to a study published last week by FICO, roughly 24 million consumers saw a decrease in their credit limits during the study period dating from October 2008 through April 2009. This is slightly more than the results of a similar study performed by FICO covering April 2008 through October 2008 where the amount was roughly 22 million cardholders. Arbitrary means that the consumers didn’t prompt the lender’s actions by doing something adverse with their credit such as miss payments. If the two populations are mutually exclusive (i.e. there’s no overlap in study populations), that means that roughly 46 million consumers saw their credit limits reduced during the one-year period dating from April 2008 to April 2009. Just to give you an idea of just how large that group is, it represents 23 percent of the entire population of consumers who have credit reports.

The new provisions of the CARD Act do nothing, absolutely nothing, to prevent credit card issuers from continuing to do the same things. In fact, they don’t even have to notify you of the credit limit decrease AT ALL – unless they used credit data to make their decisions, and even then they don’t have to notify you until after the fact.

Arbitrary Account Closures Are Still Perfectly Legal – Another widespread practice by credit card issuers is to close down accounts that are either inactive or underperforming. Today card issuers are allowed to continue this practice, and nothing in the CARD Act prevents it. In fact, just like credit limit decreases, the issuer is not required to give you notice ever, unless the decision was made when reviewing a credit report. And in that case the notice doesn’t come until after the closure. Many consumers find out that their account was closed when they are declined at the register.

So, you tell me: Does the new CARD Act make you feel more protected from credit card issuers?

Here is how most debt reduction companies work...Please sign up or login to see the rest of this page.

Nowadays a number of similar companies are offering free credit reports and scores. With all of these ads for freebies, it’s no wonder that so many consumers believe that all credit scores are created equally.

First, a little history on credit scores:

A company called the Fair Isaac Corporation created the first credit score. It was made available to lenders in the very late 80s and soon thereafter began to pick up momentum and popularity in the lending world. The FICO score became the gold standard in the mortgage lending world when Fannie Mae and Freddie Mac endorsed its use for evaluating mortgage loan applications in the mid 90s.

For years the FICO score was a mystery to consumers and was only known by the lending industry. Credit scores have only recently been made available to the public in the last few years. In 2001, California passed a law that required credit scores to be made available to California residents.

This pretty much opened the floodgates for the rest of us.

It also turned into a cash cow for the bureaus. However, for two of the three, instead of selling the actual FICO score, where they had to pay royalties to the Fair Isaac Corporation - they created their own scores to sell to consumers.

That’s where the confusion started.

Now that the bureaus all sell scores targeted at the consumer market, many unknowing consumers assume that these scores are the same scores a lender would see. Unfortunately, this is just not the case and it often causes a lot of confusion for those that are looking to refinance a mortgage or trying to qualify for a new car loan.

Take Steven and Veronica Blanco for example. To get a better understanding of where they stood credit wise, they went online and paid for all six of his and his wife’s credit scores - one for each of them from each of the three major credit bureaus.

Between the two of them, their scores ranged from a high of 732 to a low of 705. Knowing that mortgage lenders typically go with the middle scores, Steven assumed that they would be fine in qualifying for a new home loan at a decent rate.

But when the couple applied for a mortgage loan through their credit union, they were shocked to find out that the credit scores their lender pulled were significantly lower, ranging from 645 to 672. After talking with their lender at length they learned that even though they had purchased their scores from one of the three major credit bureaus, the scores they purchased were not the same scores that lenders use.

So what score is the right score and where can I find it online?

Here’s the deal…the industry standard for credit scores is still the FICO score. The FICO score is the score that most lenders use when determining your eligibility and terms for a loan. While the FICO score is not the only credit score that lenders use, it is the most widely used with more than 90% of lenders using it to make their lending decisions.

The easiest and most convenient site to order your FICO credit scores is through Fair Isaac’s consumer website: ...Please sign up or login to see the link....

This is the only site where consumers can order all three of their FICO credit scores from all three credit bureaus. You can also order scores from the credit bureau websites directly but you should be aware that you’re not necessarily going to get a score that lenders use.

While these scores are pretty much worthless in the lending environment, they are a constant source of revenue for the bureaus at the consumer level. Let’s take a look at what each of the three major credit bureaus offer to consumers:

Equifax
Equifax is the only bureau website that you can order your FICO score from directly - without having to search for an obscure alternate web address. The score is marketed as Score Power.

When you visit their website you’ll notice that they explain that the score that you’re purchasing is in fact a FICO score. The problem is that you’re only able to get the Equifax FICO score from this site and we all have three FICO scores - one from each of the three major credit reporting agencies.

Experian
Experian markets and sells the PLUS Score on their website. They also have a half dozen other websites marketed under different brands that also sell their Plus Score. Be very careful when watching commercials about free credit reports; that’s one of their marketing tactics.

If you’ve purchased a score from Experian or one of their consumer sites, you didn’t get your FICO score.

TransUnion
TransUnion sells the TransRisk score under their ‘TrueCredit’ brand. Their TransRisk score is also available for sale to lenders but it just isn’t commonly used.

TransUnion does sell the legitimate FICO credit score to consumers, but it’s only marketed at their TransUnion Consumer Services website at ...Please sign up or login to see the link....

As you can see, this site is almost impossible to find unless you know the exact website address. Just try Googling the consumer services division and you’ll see what I mean.

While these are only the websites of the major players, there are tons of other sites out there that offer credit reports and scores. The easiest way to be sure that you’re ordering a FICO score is to read the fine print. If it’s a FICO score, it’ll say so.

Buyer beware!

...Please sign up or login to see the rest of this page.

In this episode of Credit Myth Busters we’re going to focus on five little-known facts about collections:

1. Re-aging is illegal – don’t let it happen to you! Re-aging is the process (yes, the illegal process) whereby a collector updates the “date assigned” of a collection to fool the credit bureaus into thinking it’s more recent than it actually is. This causes the collection to remain on your credit reports longer than the seven years allowed by the Fair Credit Reporting Act. Some collectors do this intentionally and some do it accidentally. Regardless, you need to make sure that the collection doesn’t stay on your credit files any longer than the listing of the original delinquent account.

2. The collection will not disappear immediately. A collection that has been paid or settled does not get removed from your credit reports right away. Rather, it will reflect as “Paid” instead of “Delinquent”, but it will still drop off seven years after the original delinquent date. There’s talk about a law that will require the removal of medical collections once they’re paid, but that’s not in place as of now. And any other collections for things like unpaid utilities, traffic tickets, and when you stiffed the Domino’s delivery guy for those 9 Meat Lover pizzas stay on your credit reports even after you’ve made good on the debt.

3. Your ...Please sign up or login to see the link... will not immediately increase after paying off a collection account. This is probably the most prevalent myth about collections: Many of us make the assumption that paying a collection will lead to an increase in your score. This is not a guarantee, and even if your score does go up, it won’t go up by much. According to the scoring criteria, what’s more important is the fact that you went to collections in the first place, not the balance of the collection itself. If this is the case, then why should you ever pay your collections? Continue to number 4…
 
4. It’s wise to pay or settle or you might be faced with a lawsuit. Many consumer advocates advise that you ignore the collection calls and letters. In fact, I attended a presentation in Atlanta made by an extremely well-known personal finance celebrity, and he told the audience that you should avoid collectors like the plague. I looked at my partner in Creducation, Deanna, and we both simultaneously made the “Oh no, he didn’t” face. In reality, you’re much better off working with the collector to settle the account or pay it off. The more you owe, the more likely the collection companies will pursue the debt into court to compel you to pay. That could mean garnishment of wages or a judgment against you.

5. Payment plan options are limited, and at best they will only get you a little more time. Collectors might be sneaky, but they’re not stupid. If you’re willing to pay them, they’re going to try and get as much out of you as they can in as short a period as they can. Here’s another reason why they don’t like payment plans: Why would they agree to a drawn out payment plan when you couldn’t honor your payment plan with the original creditor? The best you’ll get is two or three months. If you find one willing to offer a longer payment plan, TAKE IT!!