As more of us shop online, share updates on social media and attend conferences across online platforms, scammers are enjoying a golden age. For proof, look at the 14 million victims of identity theft in 2018, which resulted in a total of $1.7 billion to hackers. Identity thieves are increasingly sophisticated and always relentless, ready to pounce where there is a data breach or lack of precaution against hacking, phishing, malware or document theft. They even pose as trustworthy sources, such as the Federal Trade Commission Chairman. Credit card fraud is still one of the most common forms of identity theft, where criminals either hijack your existing accounts or use your personal details to open new accounts in your name. The warning signs are easy to spot, with unidentified payments and suspicious charges appearing on your statement. But it’s not as simple as keeping an eye on your cards. Scammers are increasingly moving toward phone financing and loyalty programs using personal details obtained from the dark web or data breaches. If you start receiving bills and correspondence for contracts you never signed, your identity has probably been stolen. We can’t afford to be complacent; protect yourself by looking out for these red flags that your personal details may have been compromised. Here are some other lesser-noticed signs that could mean your information has been stolen. 1. Look Out for Small ChargesIdentity thieves trust you not to check your bank or credit card statement. They know that many of us toss statements directly into the trash, often without even opening them. Disrupt their plans by going through each statement every month, looking in particular for small charges and micropayments. Scammers will often test a stolen account first with a few small payments before aiming for a bigger prize. If you don’t recognize a payment, question it immediately with your bank or credit card company. 2. You’re Missing Your BillsThere are times when having bills to pay is better than having none at all to take care of. Particularly if you’re living in a shared building or have recently moved, identity thieves can intercept your mail and use your personal details for nefarious purposes. Alternatively, a thief who has cloned your credit card might pounce on your mail to remove evidence before you can raise the alarm. The first you may know of the theft is when you receive a call from a debt collector. Top tip: Go paperless. Most banks, credit card companies, utilities and reward programs actively encourage customers to switch to online statements to save paper. Your personal details are also more secure. 3. Social Security FraudFor identity thieves, your Social Security details or Personally Identifiable Information (PII) is a significant prize. Armed with a Social Security number, identity thieves can claim tax refunds, access government benefits, receive medical care or open a variety of accounts in your name. Always be wary of sharing your Social Security number over public WiFi or through any non-secure website. If you receive an email asking for your details, ignore the link, go directly to the website instead and log on using your normal username and password. Signs that your identity has been stolen will often appear on your credit report as thieves request hard and soft searches to access credit or loans. Top tip: Check your credit report regularly and if you’re suspicious of activity, add a fraud alert or security freeze to your report. These lock out access to your report without confirming your identity or entering a PIN or password. 4. You’re Denied Medical CoverageIt might lack the glamour of Ocean’s Eleven or The Thomas Crown Affair, but identity theft in order to access medical care is surprisingly lucrative. It makes sense, given the high cost of treatment and prescription medications. Thieves will use your Social Security number, passport, driver’s license or other form of identification to access medical care on your account. The first you’ll know could be when you’re denied treatment because you’ve reached your benefits limit, or because records show that you have medical conditions (that you don’t have) that exclude you from coverage. 5. Hotline to the IRSIdentity thieves can be more proactive in contacting the IRS than the average taxpayer. Their goal is to sneak through a Stolen Identity Refund Fraud on an unsuspecting account. Using a stolen Social Security number, an identity thief can file a return online and claim a refund. How will you know? When it comes to filing your own tax return each year, you’ll be told that it has already been submitted. Better still, in relative terms, the IRS will inform you that a suspicious return has been filed. Protect yourself by checking your tax account and credit report regularly throughout the year rather than leaving it until filing day. 6. Warrant Out for Your ArrestImagine being pulled over for broken tail light and finding out that there is a warrant for your arrest. It happens when criminal identity thieves obtain stolen or cloned personal identification and provide it to law enforcement, whether when receiving a ticket or under arrest. With the thief having no intention of attending the court hearing, the warrant lies undiscovered until the innocent victim triggers the alert themself. If this happens, you will need to contact the law enforcement agency promptly to erase the warrant from your record. Identity theft is a sinister business, but the good news is that most credit card companies offer zero fraud liability and more than half of victims are able to resolve issues in one day or less. Start protecting yourself today with a credit report check to make sure that nobody has had plans with your identity. References:
The post 6 Lesser-Known Signs of Identity Theft appeared first on SmartCredit Blog. from https://blog.smartcredit.com/2021/02/24/lesser-known-signs-of-identity-theft/
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Since the launch of the first reverse mortgage in the USA in 1961, homeowners have benefitted from this avenue for releasing equity from their home to cover retirement costs or other expenses. The popularity of these loans may have peaked around 2008, but they are still heavily promoted on TV and in media targeting senior homeowners. Depending on your circumstances, they may well be worth considering but bear in mind these reverse mortgage pros and cons first. Reverse Mortgage FAQIn a nutshell, a reverse mortgage allows a homeowner to convert equity in their property into cash. The homeowner transfers equity in the property to a lender in exchange for receiving (instead of making) monthly payments. When the homeowner either dies or sells the property, the balance of the loan is repaid. There are three common types of reverse mortgage in the USA:
Qualifying for a Reverse MortgageTo qualify for a reverse mortgage, you must first have significant equity in your home. For the federally backed loan, you must also be 62 years of age or older. Assessment criteria are based on the appraisal value of the home, not on the property owner’s income or credit score. However, lenders will confirm that the applicant has sufficient funds to cover property taxes and insurance, and applicants must attend mandatory counseling to evaluate their understanding of, and suitability for, a reverse mortgage. As of 2020, the maximum reverse mortgage loan amount stands at $765,600. Common Misconceptions about Reverse MortgagesUntil the 2008 crash, reverse mortgages were seen as something of a last resort in unfavorable circumstances for providing income in retirement. That is no longer the case. Lower borrowing limits now rule out reverse mortgages based on 100% equity. Other common misconceptions include:
The Pros of Reverse MortgagesReverse mortgages are particularly suitable for seniors with no heirs or surviving dependents. They allow you to release cash to cover medical expenses or retirement costs, for example, without selling your home or giving up the title to your property. You don’t have to pay back the loan while you’re living in your home, and revenue is usually tax-free and will not affect your Social Security or Medicare benefits. The Cons of Reverse MortgagesWhen you take out a reverse mortgage, you are reducing equity in your own home, so you have fewer assets to leave your heirs. At the end of the mortgage term, when you sell your home or die, the loan has to be repaid. This amount increases over time as (non-tax-deductible) interest accrues. In addition, reverse mortgages typically charge higher interest rates than conventional mortgages and incorporate origination fees, servicing fees and closing costs, as well as mortgage insurance. In some cases, a personal loan might be a better option than a Single Purpose loan, or even selling a home and downsizing to a smaller property as a means of releasing cash. It’s no secret that most reverse mortgage offers come with compelling sales pitches, which can be harder to evaluate with a cool head when financial circumstances are tight. As with any major financial decision involving property, weigh up the pros and cons with the support of a trusted financial advisor. Sources
The post What are the Pros and Cons of Reverse Mortgages? appeared first on SmartCredit Blog. from https://blog.smartcredit.com/2021/02/23/reverse-mortgage-pros-and-cons/ You have to give hackers credit: They never stop coming up with new and nefarious ways to steal your identity or commit credit card theft. That’s why it is crucial to stay one step ahead of them. Wondering how to protect yourself? Learn the different methods hackers use to steal your personal information, and take action to safeguard your accounts. 1. Credit Card Fraud DetectionStart by understanding how credit card companies detect fraud. Triggering events may include a lot of purchases made online in a short period, especially when those purchases don’t fit the customer’s profile. For example, if you generally make $500 per month in purchases and suddenly thousands of dollars show up on your statement, the credit card company will take notice. If you usually make purchases in a certain geographic area and transactions are made halfway across the world, that’s another red flag. Review your monthly statements thoroughly to ensure all charges are yours. Protect yourself even further by reviewing your statements every few days. Report any suspicious activity immediately to your credit card issuer. 2. Email PhishingGone are the days when email phishing accounts were full of misspellings, bad grammar and other immediate indications that they were not legitimate. Today’s sophisticated hackers produce phishing emails that look real — until you peruse them carefully. These phony emails are supposedly from your bank, credit card company or larger retailers where you frequently make purchases. Some email phishing attempts purport to come from the IRS. Real companies do not want you to send sensitive information via email. They are certainly not going to ask for your password, social security number or credit card information. A legitimate company email will not include a special log-in link. Check out the domain name of the sender. Often, it will have small changes compared to a real one, either numerically or by letter. For example, if the email comes from [email protected], it is probably real. If it’s coming from [email protected], it almost certainly isn’t. Needless to say, public companies don’t send emails from g-mail addresses. Scammers try to draw in their victims by using different methodologies. Urgency is virtually universal — if you don’t act now, your account is closed; a virus was detected on your PC; there is an issue with your current payment details, ad nauseam. It’s meant to persuade you to click on the provided link right now, so you end up a hacker’s victim. 3. Tax Refund and Money Wire InterceptionOne way hackers access your tax refund is by filing a tax return before you have the opportunity to do so. Of course, to do that, they need plenty of information, including your social security number. Protect yourself by never giving out your social security number unless absolutely necessary and you are absolutely positive the requestor is legitimate. The same holds true for personal data such as your birthdate. Hackers go where the money is, and real estate transactions are a prime target. A criminal hacks into a real estate agent’s account, searching for pending sales. They gather the name of the buyer, seller, escrow officer, title company and other pertinent information. They send an email to the lender or buyer that appears to come from the agent or escrow officer and asks that the buyer send the funds to a different bank — where the hacker has set up an account. Once the funds arrive, they are withdrawn right away. Red flags include:
4. Targeting Customer Loyalty AccountsCustomer loyalty accounts — such as rewards points from retailers or frequent flier miles — are easy pickings for hackers. Some programs require little more than an email address for verification. The sheer volume of these accounts make them attractive to criminals. A hacker can steal your rewards points and purchase digital gift cards, which they then offer on the black market. How to Protect Yourself from Identity TheftAn ounce of prevention is always worth a pound of cure. Identity theft can take months — or longer — to resolve, and damage your credit score and quality of life in the process. That’s why it’s vital to take concrete steps to minimize the chances of identity theft. Make sure your computer has top virus detection software installed, along with firewalls. On your mobile phone or other devices, use all available security features. Only download apps from verifiable websites. Never download an app from an open forum. When you visit the website of a financial institution, make sure you are on the legitimate site and not a phony site set up by criminals. Avoid clicking on pop-up ads. They are a great source of malware. Use two-factor authentication whenever possible. That provides an additional security layer. Two-factor authentication may include biometrics, or the use of fingerprint, voice, or iris recognition. It may also include answering questions known only to the user, such as mother’s maiden name, name of first pet, and other facts difficult for a hacker to obtain. Protect your loyalty accounts by changing your username and passwords regularly, and checking your balances consistently so you notice anything amiss right away. Create unique and strong usernames and passwords to make it harder for hackers to steal your information. Loyalty programs should offer notification of any transactions, so make sure you are signed up for this benefit. Contact SmartCredit®SmartCredit® can help protect you from identity and credit card theft. Along with mobile and email alerts allowing you to solve potential problems quickly, we offer $1 million identity fraud insurance* for your whole family. Contact SmartCredit today to achieve your best possible credit score, and help keep that credit score safe from the damage done by hackers. *Activation required after enrollment. Sources:
The post 4 Sneaky Ways Hackers Steal Your Personal Information and How to Protect Yourself appeared first on SmartCredit Blog. from https://blog.smartcredit.com/2021/02/22/hackers-credit-card-fraud/
Not only does your credit score evolve (typically covering six-year periods) as your borrowing and payment history matures, it’s also determined by three potential sources that report varying numbers based on different types of credit scores. It’s important to know that not all lenders use the same scores, and there’s plenty you can do to achieve your best possible score. Let’s take a look behind the curtain at the credit score lenders use most and why. The Three Credit Reporting AgenciesWhenever you apply for a loan, payment plan or credit card — whether it’s with a bank or utility company — that lender will request your credit score from a Credit Reporting Agency. The use of credit bureaus to rate creditworthiness dates back as far as 1899. Today, some 190 million Americans now have a credit card, but credit reports are issued by just three agencies: Experian, Equifax and TransUnion. These agencies are regulated by the Consumer Financial Protection Bureau, which also operates a searchable database of consumer complaints. Credit agencies don’t come up with the score themselves but instead pull it from two primary data analytics services. As a consumer, you won’t necessarily know who generated your score, and each credit agency might score you differently. The Types of Credit Scores Agencies UseCredit agencies obtain their scores from two main data models: FICO (Fair Isaac Corporation) and VantageScore. Of the two, FICO is by far the more commonly used, playing a role in 90% of lending decisions in the US. However, credit score changes typically apply to all credit scores the same, including all FICO® & VantageScore® versions. This is because all credit scores are derived from TransUnion®, Experian® and Equifax® where your payments and spending are reported.* The intention of establishing credit might have been to clarify creditworthiness, but even with just two models to choose from, there may be some confusion. That’s because each model sets out separate ranges for what constitutes a ‘good’ or ‘bad’ score. FICO defines a good score ranging from 670 to 739, whereas the spread for VantageScores is from 661 to 780. Ultimately, it is up to the lender — not the consumer — to evaluate the score, and they may take a broader view. What Are Lenders Looking For?To complicate things more, both FICO and VantageScore issue a variety of scoring models based on separate algorithms. Lenders will look at FICO Score 8 for general borrowing, whereas mortgage lenders typically focus on FICO Scores 2, 4 and 5. What’s the difference? The factors that contribute to the overall score are weighted differently for each version. What Makes up Your Credit Score
High credit utilization might be an issue for general lending. Still, it is weighted as less influential for mortgage applications, given that the mortgage loan will overshadow any existing credit lines. For mortgage applications, banks will usually request credit scores from all three credit agencies. If two are the same, they will pick that score; if all three are different, the median score prevails. Why It MattersGreater transparency might have been the goal of credit agencies, but the calculations and models they use largely remain a mystery to the borrower. However, what doesn’t change are the strategies you can leverage to achieve your best possible credit score. From making regular payments to moving your balance to lower-interest loans, you can read more about these strategies here. If you want to achieve your best possible credit score — regardless of its source -- discover our tools and services to manage your borrowing, secure better interest rates, and qualify for the mortgages or loans you’re looking for. *FICO® is a trademark of Fair Isaac Corporation and is unrelated to SmartCredit®. TransUnion®, Experian®, Equifax®, and VantageScore® are registered trademarks of their respective owners. References:
The post The Credit Scores That Lenders Use Most appeared first on SmartCredit Blog. from https://blog.smartcredit.com/2021/02/01/credit-scores-that-lenders-use/ While most borrowers are concerned about the single number that measures their credit risk — the credit score that ranges from 300 to 850 — it’s worth your while to obtain your 3-bureau credit report and review it from time to time, even if only once per year although reviewing them more regularly is ideal. The three main credit reporting bureaus are, of course, Equifax, Experian and TransUnion. Luckily, the reports are not difficult to obtain, and over the years, the bureaus have made the reports much more consumer-friendly, so they are relatively easy to understand. So why is it so important? Let’s have a look at a few reasons it makes sense to review your three-bureau credit report in detail. 1. Check for MistakesThis is perhaps the single most important reason to check all three of your credit reports: there might be information that needs to be removed from one or more of your reports. Some of these might include negative hits, such as a credit card charge-off, that are supposed to disappear from your credit report after a certain amount of time. For example, a missed payment is only supposed to stay on a credit report for 18 months. Such items, if they are still on one or more of your reports, might be contributing to a lower score and you’ll want to have them removed immediately. To a lesser extent, you might have glaring errors, such as credit cards or loans in someone else’s name, that somehow ended up in one of your reports. These may have been the result of a clerical or processing error by an employee at the credit bureaus or at the bank. Contact the credit bureau to have such errors removed immediately. 2. Understand DiscrepanciesIt’s important to note that not all creditors report the same information to all three credit bureaus. You might, for instance, notice that a line of credit you opened at an auto repair/tire shop two years ago appears on a report for one bureau, but not for another. This occurs because the process of reporting a consumer’s credit activities to the agencies is completely discretionary and voluntary. Finance companies, creditors, landlords, utilities companies and others decide which information they wish to share with the agencies. Further, the agencies then decide how to treat that information on your reports. If you discover that a particular loan or credit card account, for which you have a stellar payment history, does not appear on one of your reports, you might wish to contact the bureau and ask why. It is possible that they can make an inquiry and pull that data into your report. 3. Increase Awareness of DebtOf course you are aware of the credit cards you have and the loan payments you are making, but reviewing your credit reports can give you a big picture perspective on debt and how you interact with it. Despite financial gurus urging consumers to live debt-free, cut up credit cards, pay off all debts and live in a cash-only world, this can cause harm to consumers down the road when they need to apply for a mortgage, co-sign on loans for children or negotiate the terms on emergency debt. The ability to manage debt is crucial for everyone’s financial health, and studying one’s credit reports can provide deeper insights than simply reviewing monthly credit card or loan statements, or obtaining the single 300-850 point score. Credit Simulations and Credit ModelingBecause each credit agency calculates its own credit score using its own models, differences between reports can produce vastly different credit scores. Most borrowers seek the highest score possible, of course, and one that is consistent. The ability to view, understand and manage your credit is key to putting yourself in the strongest position when applying for loans. Borrowers should consider utilizing a tracking tool, such as SmartCredit, that provides monitoring of credit scores and helpful suggestions for actions to increase your score. Such a tool can help individuals understand the dynamics of credit and the impact of open and closed credit accounts on their overall score. References:
The post 3 Reasons Not to Skip Over Your 3-Bureau Credit Report appeared first on SmartCredit Blog. from https://blog.smartcredit.com/2021/01/28/reasons-not-to-skip-over-your-3-bureau-credit-report/ Most retailers accept different payment forms, so does it make sense to open a retail store credit card? The short answer is: Yes — under certain circumstances. If you think that retail store credit cards are no longer in vogue, you’re wrong. According to a recent survey by CreditCards.com, 62% of U.S. adults have applied for retail credit cards at some point, and 69% of individuals have applied on a whim at checkout at least once. Let’s look at a few reasons why it makes sense to open a retail credit card. Discounts You Would Not Normally GetWhether in-store or on the checkout page of an online retailer, applying for credit on the spot can net you a substantial discount that you would not otherwise be eligible for. This can help if it’s for a large purchase (say, a $2,000 ultra high definition smart TV) or for a brand rarely discounted in the store. Apart from discounts, the retail store credit card may have generous financing terms that you might not get if you use your regular bank-issued Mastercard or Visa. Additionally, after the application, approval and initial purchase using your new card, you will most likely be eligible for specific discounts or be invited to special shopping events to which non-cardholders are not privy. If you frequently shop at this retailer, these services and discounts can be significant. Improve Your CreditApplying for a retail credit card can also improve your credit. While some might think that new credit applications serve as a hit against your credit score, this is most likely not the case if you already have good credit. Store credit cards can also add variety to the types of outstanding loans you might have. They serve to raise your overall credit limit and increase the number of open accounts, which can positively contribute to your credit score, as long as you’re paying off your balance. Reasons Why You Should Not ApplySimply put, if you know the credit card will tempt you to spend more than you usually do, then opt out of applying. The risks are not worth the rewards. Further, while the store credit card might offer exclusive discounts on merchandise, the initial generous financing terms may vanish after a certain period of time. While the average interest rate for a U.S. credit card is around 15%, those for retail credit cards are usually upwards of 20%, so it’s important to check the fine print. Although the Federal Reserve cut the federal funds rate to near 0% in March 2020, in a “quantitative easing” program to protect the economy from the effects of COVID-19, many retail credit cards still charge exorbitant APRs. Additionally, the more credit cards you have, the more personal data is available to hackers. If you’re trying to reduce your digital footprint to protect your data from misuse or compromise, having yet another open credit account will not support this effort. Confused About What To Do?You might not know how that retail credit card application might affect your credit score, so it’s best to do a little research before you go shopping. Consider a credit-monitoring tool like SmartCredit that helps you understand what factors might be affecting your score and what impact additional credit lines may have. This can help you decide whether to apply for that credit card or not. References: https://www.businessinsider.com/personal-finance/when-to-open-store-credit-card-2018-5 https://www.nerdwallet.com/article/credit-cards/open-store-credit-card-one-time-discount https://www.creditcards.com/credit-card-news/retail-store-credit-card-survey/ The post Is It Ever a Good Idea To Open a Retail Credit Card? appeared first on SmartCredit Blog. from https://blog.smartcredit.com/2021/01/25/retail-credit-card/ With the average credit card interest rate at just over 14.5% in the US, making purchases or borrowing on plastic can be expensive. But if your annual percentage rate (APR) goes above average — bearing in mind that rates above 20% are possible — borrowing can quickly spiral out of control. Unmanaged credit card debt can impact your credit score, so one way to reassert control is to lower the interest rate on your credit card. Here’s how. Ask the Lender to Lower the Interest RateYes, it’s an option. Credit card borrowing is an agreement between you and the lender, which means that it is open to renegotiation. If you think the interest rate on your card is affecting your ability to clear your balance, ask the lender for a reduction. Their incentive? The credit card market is ruthlessly competitive and your business has value, even if it is in the form of debt. Imply that you received a better offer from a competitor, and the reward may be a lower interest rate on your credit card. Your case will be stronger if you have made all payments to date on time. Use a Balance Transfer CardYou can’t pay off credit card debt with another credit card, but you can transfer the debt to a balance transfer card. Several providers on the market are vying for customers with competitive deals. Check for the best ones using online comparison tools. Here’s how balance transfer works:
Avoid These Balance Transfer ErrorsApproach a balance transfer as a debt reduction strategy on the path to financial freedom. That means you should avoid using your card for purchases or withdrawals as these will automatically incur interest at a potentially higher rate. As with your previous credit card, you should also make sure that you make payments every month. Any late fees or penalties could void your introductory offer. The Disadvantages of Balance Transfer CardsBalance transfer cards carry some disadvantages, otherwise everyone would be doing it. For example:
Avoid applying for a balance transfer card to lower your credit card interest rate unless you are confident that you meet the criteria, otherwise the search and application will lower your existing credit score. Also, be warned that advertised APRs may be conditional on a credit score that turns out to be higher than your current rating. Tips for Sound Credit Card ManagementTo achieve your best credit score as a borrower, follow these conventional strategies based on sound financial wisdom:
To find out more about achieving your best possible credit score to access the most competitive interest rate for a credit card, check out SmartCredit’s tools and services for monitoring your credit. References:
The post How To Lower Your Credit Card Interest Rate appeared first on SmartCredit Blog. from https://blog.smartcredit.com/2021/01/18/how-to-lower-credit-card-interest-rate/ In 2020 we experienced the biggest economic contraction in history followed by economic growth at a staggering 7.4% from July to September. More than 20 million Americans lost their jobs, yet the stock market hit a record high. Confused? Even the experts are scratching their heads. And it’s making many consider their next move carefully. When it comes to the financial moves we should be making for 2021, it’s not just about the importance of saving money. It’s also about taking back control of your finances. Here’s some money advice to consider. Assess Your FinancesWithout a crystal ball to see into the future, the next best thing is a clear picture of your current financial situation. That means pulling together a comprehensive breakdown of your monthly income and expenditure, loans, investments and liabilities. It’s also time to find out your credit score if you haven’t done so already. Your Smart Credit Report will show you where you are at the start of 2021 so you can plan where you want to be by the end of the year. Focus on DebtThe average American carries just over $90,000 in debt, spread across mortgages, credit cards, student loans and personal loans. The more you know about what you owe, the faster you can achieve financial freedom. In particular, explore options for the following: Better Borrowing
Cut out Unnecessary ExpensesNew year, new you. Surprise yourself with how much you can set aside through a little financial mindfulness. That means canceling all the subscriptions you don’t use, only shopping for groceries with a list, skipping take-out coffee and challenging yourself to find a cheaper option for every purchase, either through buying in bulk or buying used. Set a Goal for 2021Put your debt on a slimming plan and commit to bulking up your savings. It will be much easier to save money and achieve financial freedom if you are aiming for an end-of-year goal. Once you’ve calculated your debts, establish a monthly savings percentage to build your 2021 nest egg. The Importance of Saving MoneyDespite the rigors of the pandemic, there was some good news in 2020. Personal savings peaked at the highest level in history, hitting 34% of disposable income on average. With fewer distractions and opportunities to spend, many of us have developed a strong saving habit that we can keep going in 2021. Think of saving as paying yourself first, divided into the following: Saving Priorities
Diversify Your IncomeIf your entire income is from one job, make 2021 the year you spread your talents to incorporate a side hustle, even if you’re just turning a hobby into a revenue stream. Time is its own currency, so if you can exchange an hour normally spent watching TV for an hour learning new skills through an online course. You’ll add further strings to your bow, so to speak. Make passive income a goal too, through micro-investing or building a stock portfolio. Secure Your IdentityLet’s make sure that 2021 isn’t the year your Social Security number or personal details are hacked by identity thieves. The risk is constant, so take a moment to reset all your passwords, add two-factor authentication to all online accounts, and check your credit report and bank statements for suspicious activity. We’ll avoid making any predictions about 2021, but we do stand by these reliable financial habits that consistently yield success. To make more moves toward financial success, discover how SmartCredit’s suite of tools and services can help you plan for the year ahead. References:
The post The Financial Moves We Should All Be Making in 2021 appeared first on SmartCredit Blog. from https://blog.smartcredit.com/2021/01/15/smart-money-advice/ Disappointment aside, it is better to ask why your credit score is low than to not know your credit score at all. Surprisingly, 54% of Generation Z don’t even know their score. Yes, a low score can affect your ability to access loans and credit cards — potentially delaying your financial freedom, home or car ownership, or other plans. But with all of this information at your fingertips, you can start working to achieve your best possible score. Here’s why your credit score is low and how to take action. How Low Can Your Credit Score Go?Your credit scores are a lot like your SAT scores — there are a minimum and maximum score range (scores range from 300 to 850), and national data to establish benchmarks for “average,” “low” or “high” scores. From this information we know that:
But just like SAT scores, a good score is relative. Your score needs to be high enough to match your ambitions. For example, if you want to apply for a mortgage, bear in mind that the average credit score of a homebuyer in the US is 728. Typically, a score above 700 puts you in strong borrowing territory, while a score below 600 might present obstacles. To stretch the SAT analogy, remember that your credit score is just one part of the entire picture, so don’t give up on any plans solely because of a low credit score. Instead, try to achieve your best possible score in tandem with other factors. Why Does Your Credit Score Matter?You may need to address a low credit score in circumstances such as applications for credit cards, car loans and mortgages. Lenders may either refuse an application or require a higher interest rate where your credit score is perceived as low. In fact, more than half of Americans have been refused a loan or credit card because of a low credit score. Bear in mind that your landlord, utility company, insurer and even employer can request a copy of your credit report and may challenge why your credit score is low. Common Reasons for a Low Credit ScoreBefore we talk about the common factors that impact a credit score, remember that time is a key element. If you’re new to the country or just turned 18, you’ll be starting from scratch even if you’ve never borrowed before. However, once your credit history is live, these are the most common reasons for a low credit score:
Negative information such as credit card charge-offs and bankruptcies stay on your report for up to 7 years and are then expunged. Common Myths About Low Credit ScoresAlthough we’re referring to your credit score, there is actually more than one source for obtaining your score, so expect the results to be within the same range. Remember that your score is yours alone, and it is not affected by:
Even if your credit score is low, you may still be able to borrow money or get a credit card. It’s a myth that a low credit score will prevent you from borrowing, although you will probably be restricted to less competitive interest rates and terms. How To Achieve Your Best ScoreIf you have a credit score that is considered low for your financial plans, there are several steps you can take to improve it. Building up your credit history is a steady process that is best treated as a habit, but you can achieve a better score if you:
Finally, make sure you check for errors on your report. With data drawn from so many sources, mistakes can happen. Even worse, you might find out that you have been the victim of identity theft, in which case fast action is essential. Check out SmartCredit’s suite of tools and resources for managing your credit score and taking appropriate action if you have a low credit score. References:
The post Why Is My Credit Score Low? appeared first on SmartCredit Blog. from https://blog.smartcredit.com/2021/01/14/why-is-my-credit-score-low/ In a world where personal data is routinely breached, it is sensible to regularly check your credit score to be sure it’s not only accurate but that it is also not being used without your knowledge. While consumers are able to get their credit reports for free from each of the major credit reporting agencies, not many consumers know how often they should check credit scores and reports. In this article, we will discuss some of the most critical times that you should be checking your credit score. When to Check Your Credit ScoreWhat’s in Your Credit Report?Your credit report contains a lot of personal information, such as your birth date, social security number, home address, previous addresses, telephone numbers, credit accounts, and payment history. It may also list any repossessions, collections, foreclosures, and bankruptcy filings on your behalf. Additionally, it also has a record of who has accessed your credit information. You will see the names of these creditors under the inquiries section. How Often Should You Check Your Credit Scores?Credit scores aren’t the same as credit reports, but your credit report does contain your credit score. Credit scores help lenders decide whether to give you credit and at what interest rate. Credit scores are calculated using the information on your credit reports, and each agency will provide you a slightly different score. It’s a good idea to verify your credit scores at least once a year, but there are other instances in which you should check your credit score, such as if you intend to apply for credit, if you are working to rebuild your credit, or for one of the reasons we will discuss shortly. By doing this, you can track your credit score closely and get a clear view of specific trends in your credit. When you do track your credit scores, be sure to look for more significant patterns, rather than small day-to-day changes. Lenders are well aware that credit scores change from day to day, thus small changes don’t have much weight in the eyes of creditors. A little change might only be significant if your credit score is near the border of a credit score range, and you might be eligible to get better conditions for a credit score in a different credit range. If you have concerns about your credit score, there are ways that you can work to reach your financial goals. Some monitoring services, such as SmartCredit, enable you unlimited access to credit information so that you can check your credit score as frequently as you’d like. Critical Times to Check Your Credit ScoreWhen You are Preparing for a Major Credit-Based PurchaseYour credit history is one of the principal variables used for loan approval. You’d be surprised by the credit report entries that could get your application denied. It’s a fantastic idea to receive your credit report at least six months before applying for a loan for any significant purchase so that you have adequate time to address any discrepancies. When You Have Been Denied for CreditIf your credit was denied, by law, you are entitled to a free copy of your credit report. The creditor or lender must send this letter to you within ten business days, and it will tell you why you were refused credit and will also include information explaining how you can get a free copy of the credit report used in determining your rejection. Once you obtain a copy of your credit report, review it to be sure that the decision was not made due to inaccurately reported information. In the event you find an error on your credit report, you can address the error with the help of SmartCredit, and request an updated copy of your credit report. You might have the ability to resubmit your application after your credit report has been corrected. When You Suspect You are a Victim of Identity TheftUnfortunately, identity theft is growing more prevalent, and it can go undetected for months and even years if you do not regularly check your credit report. In some cases, you may not find out your identity has been stolen until you apply for a loan or line of credit, and your application is denied. Check your credit report to find out whether the accounts in question have been reported to the credit reporting agencies. If you find your identity has been stolen, SmartCredit may be able to help. When You Have Plans to Reach a Financial GoalYour credit score is a great place to start when you are attempting to put together a plan to become more financially stable. Not only is this information simple to use to make your plan, but it can also help point you in the right direction to eliminate debt and address credit report errors. When Significant Life Changes HappenIn addition to the above instances, there are several other scenarios in which you might want to check your credit score, including if you have recently divorced or if you are searching for a new job. Check Your Credit Score with SmartCreditRegardless of the situation, it is still wise to regularly determine that your credit score is healthy. While it’s not vital to check your credit score every month, keeping a watchful eye on your credit score can be helpful in many situations. Consider it as an early-warning system that could reveal a problem before something more serious occurs. Don’t wait until you need great credit to verify your credit report. Check your credit report periodically to stay current on what your creditors are saying about you. We understand that your credit score is a critical tool in your financial future. It can either cost you or save you a lot of money in the long-term. If you’re ready to take back control of your credit score, contact SmartCredit today not only to view your credit score, but view what items could be negatively affecting it. Sign up with SmartCredit today to discover an easier way of checking your credit score! The post How Often Should You Be Checking Your Credit Score? appeared first on SmartCredit Blog. from https://blog.smartcredit.com/2021/01/05/how-often-should-you-be-checking-your-credit-score/ |
About UsWe are a group of fun and creative people building unique and patented technologies for the consumer money, credit & identity space. We started in 2003 with the idea that technology should allow consumers to interact with their banks, creditors and other institutions using a simple button. So, we noodled a lot and built the SmartCredit.com® system to make better users of money & credit. Archives
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