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The Truth is…Numbers do lie!

December 31st, 2007 PublicRadar Posted in Business, Personal Skills |

Submitted by: Denise Richardson

When it comes to buying an automobile, financing a home or obtaining credit, it’s all about the numbers. The numbers contained in a consumer’s credit report are directly related to the price of a car or home the consumer can afford. These all powerful numbers can affect both the affordability of insurance premiums and the interest rates and ultimately, may be a deciding factor in whether or not the consumer can drive the car he or she wants or purchase the home that seems perfect for their family.

But what happens when those numbers lie? Some studies have shown that one in four credit reports has inaccurate information that contaminates a consumer’s rating and affects whether or not a deal can be sealed. When consumers are hit with the disturbing news that their credit reports don’t portray the truth about them, the economy suffers too, since consumers will be forced to spend months and often years correcting errors caused by someone else before paying for their planned vacation, refinance, new home or car.

Since consumer credit scores are the single determining factor when basing the cost of credit, if that score is derived at using false information -everyone loses. A credit score is calculated by using precise models that analyze consumer creditworthiness based on their payment history, outstanding debts, types of credit, available credit, credit inquires and how long a consumer has had credit. If any one of the factors used to determine a consumer credit score is imprecise or tainted - so too is the end score. Whoever said numbers don’t lie was dead -wrong. When it comes to the world of credit, numbers can, and often do lie.
On a related note, according to the U.S. Department of Justice statistics, identity theft is now sailing by drug-trafficking as the number one crime in the nation! Studies have shown that the victim population is estimated at more than 10 million a year.
Mathematically speaking, that means that there are at least 19 new victims every 60 seconds. Consumers who believe they have an excellent credit rating often have a false sense of security that makes them less likely to review their credit reports, payment history schedules or credit card statements. It’s that false sense of security that can get them into trouble at the time they least expect it.

Tips & warnings for managing your credit reports and your identity:

You can obtain a free credit report without causing damaging inquiries to show on your credit report. There is one authorized place mandated by the Fair and Accurate Credit Transaction Act of 2005 that allows consumers the right to a free annual credit report. The official toll free number to get a government mandated annual free credit report is 877-322-8228. Free credit reports from each credit bureau may be obtained at www.annualcreditreport.com. Look for any name, address or open accounts that are not yours. Dispute all inaccuracies via certified mail.

Monitor your credit card, bank and loan statements. If you are expecting a bill that doesn’t come, contact your account holder immediately. If you see any unexpected spikes in your interest rates, contact your creditor. Unexpected interest rate spikes can be a tip off that erroneous information is contaminating your credit report. Watch for withdrawals or charges you did not make!

Be watchful of people lurking nearby while using ATMs, credit cards, checks and your computer. Thieves will often hover near you to steal account and PIN numbers; they are trained to memorize account numbers.

Make sure all correspondence mailed to you has your correct name and address. If there are name variations, contact the sender and ask why you are receiving it. When throwing out documents that contain personal information…SHRED them into small pieces.

Safeguard your laptop. Over the last 6 months, many of the data breaches have occurred in colleges and universities through the theft of laptops. Always make sure that your laptop is password protected, and armed with a firewall and up-to-date virus protection software -at all times.

Place fraud alerts on your credit reports. Remember, they fall off every 90 days or so. If you are not going to take the time to reactivate them or order your credit reports, consider hiring a company that does it for you. Being a former identity theft victim, I can tell you first hand, it’s not just your identity they steal - it’s your valuable time they rip off as well. See “How much value to you place on your “free” time?”

Prevent thieves from cracking passwords. Pick Passwords and profiles carefully. Pet names, birthdates, interests such as favorite sport team or band, favorite hangouts, hobbies, spouses and children’s names are often compiled in passwords and thieves know this. They use these bits of information to crack your password and then sell your information, get access to bank accounts or other online sites you frequent such as Amazon, itunes or anywhere you utilize the “cracked” password.

Remember two simple, but well-known adages… an ounce of prevention is worth a pound of cure -and knowledge is power. Arming ourselves with knowledge can effectively lessen the impact of fraud and help to prevent paying for someone else’s mistakes!