Credit Report Statue of Limitations

Posted by tasha on March 11th, 2010

The following is an actual reader submitted question:

Q:  How long does debt stay on your credit report?

A: According to the FTC's Fair Credit Reporting act, most negative credit information will stay on your credit report for 7.5 years (7 years + 180 days) from the date of delinquency.  It can be a bit confusing, but the jist of it is that the 7 year time clock starts 180 days from the first missed payment, which brings the entire period up to 7.5 years.  The exact quote is:

"The 7-year period shall begin, with respect to any delinquent account that is placed for collection (internally or by referral to a third party, whichever is earlier), charged to profit and loss, or subjected to any similar action, upon the expiration of the 180-day period beginning on the date of the commencement of the delinquency which immediately preceded the collection activity, charge to profit and loss, or similar action."

As with most legalese, there are some exceptions to this guideline.  The following items will remain on your credit report for the time period indicated.

1. Bankruptcy information: 10 years from the date of filing.
2. Civil suits, civil judgments, and records of arrest: 7 years or until the statute of limitations runs out.
3. Tax Liens: 7 years from the date they were paid
4. Information reported because of an application for more than $150,000 worth of credit or life insurance has no time limitation.
5. Information reported because of an application for a job with a salary of $75,000 or more has no time limitation.
6. Information reported because of a credit transaction involving a principal amount of $150,000 or more has no time limitation

By law, everyone is entitled to one credit report per year from each of the three credit bureaus, which you can get for free at www.annualcreditreport.com. Although this is a nice service, it only lets you know what your credit history is like at that point in time – it doesn't protect or monitor your credit report on a daily basis. Negative information can appear on your credit report at any time and you will suffer the consequences unless you are notified and can act immediately. Additionally, you can't get your credit score for free. Because of this we recommend subscribing to a credit report monitoring service like our top reviewed Identity Guard.

myFICO turns 9, offers exclusive 30% myFICO discount

Posted by kent on March 5th, 2010

Credit report monitoring company myFICO is turning nine years old, and they're giving you a present. Until March 31st you can get 30% off of any of their services including Score Watch, Suze Orman's FICO Kit Platinum, FICO Quarterly Monitoring, and ID Freeze. When our reviewers looked at Score Watch, they found it to be the best way to monitor FICO scores. To take advantage of this 30% discount you must use this link and enter the code myFICOis9. Unfortunately it doesn't come with a 30-day trial if you use the discount code. If you'd like to have a 30-day trial, follow the link from our myFICO review.

Does Credit Report Monitoring include more than one credit card?

Posted by tasha on March 3rd, 2010

The following is an actual reader submitted question:

Q:  Does Credit Report Monitoring include more than one credit card?

A. Yes, it does.  Credit Report Monitoring keeps tabs on any changes to your personal credit report.  Your credit report covers your entire credit history, which includes all credit cards, loans and any type of credit account you open.  It also includes public record data such as bankruptcy information, unpaid tax liens, and past due child support.

Basically, credit report monitoring is a convenient and practical way of making sure your credit history is only affected by changes YOU make.  It helps to protect you from identity theft, and some services even go a step further and provide tools to help you improve your credit score.  Our top reviewed pick is Identity Guard, because it goes beyond other services by monitoring public records for any changes in your name and checking the Internet's black market for any use of your credit cards or other personal information.

If you're interested in your current credit report score, many of our credit report monitoring service (including Identity Guard) offer a free trial. You can sign up  to see your score for free and then cancel later at no charge.  However, we do recommend you keep the service because we feel it offers real-time monitoring that is almost impossible to achieve on your own and protects you from damage to your credit history over time.

How a landlord can run a tenant credit report

Posted by tasha on February 24th, 2010

The following post in our Reader Question series is an actual user submitted question:

Q:  What is the best way to do a credit check on a prospective tenant?

A: Every experienced landlord or property manager knows that it makes good financial sense to run a credit report on prospective tenants.  This simple step can save you time and money in the long run, but it's surprising how many landlords don't get this information prior to renting their property.  With the explosion of internet commerce, it's easier than ever to get this information quickly and securely online.

Experian offers two options to check a tenant's credit and is very reasonable in price.   There are also a number of other companies out there that provide credit checks for prospective tenants.  You can do a simple Google search on a phrase like "tenant credit report" to find them.

Can I get a Free Credit Report without a credit card?

Posted by tasha on February 12th, 2010

The following post in our Reader Question series is an actual user submitted question:

Q:   I don't have a credit or debit card. How can I still get a free credit report?

A: Contrary to popular opinion, you don't need a credit or debit card to get a free credit report.  In fact, your credit report contains more data than just credit card information.  A credit report is a record of all your credit activities, including both credit-card accounts and loans.   If you have ever taken out a car loan or mortgage, this information will be on there.  It also shows if any action has been taken against you because of unpaid bills. This information is obtained mainly from lenders, creditors, insurers, employers and other institutions with which you may have a financial relationship. Any company that issues you any type of loan (such as a mortgage or car loan) or a credit card reports to at least one and often all three credit bureaus each month.

You are entitled to one credit report per year from each of the three credit bureaus, which you can get for free at www.annualcreditreport.com, without a credit card. While getting one report from each bureau once a year is nice, we don't believe it is all that useful. Negative information getting posted to your report or identity theft can happen at any time and you will suffer the consequences unless you are notified and can act immediately. There is no way to get your credit score for free.

If you wish to purchase a credit report or subscribe to a credit monitoring service such as Identity Guard, you will generally need either a credit card or debit card. Using debit cards to make purchases online is riskier, though, since the money is coming directly out of your account. If you plan on making any purchases over the Internet, having a credit card is essential.

The New York Times ponders the plight of the Internet user

Posted by Caitlin on January 25th, 2010

In this day and age, even the Fashion & Style section of The New York Times is worried about Internet security issues. This weekend, the Times recounted the experiences of Allan Goldstein, a 60 year old college professor who uses the Internet, but does so a bit nervously. He worries that NYU's online system will crash, and that he'll lose his syllabus and grades. He uses online banking, but draws the line at automated payments.

A few years ago, Mr. Goldstein was a victim of a rather low-tech variety of identity theft: dumpster diving. Mr. Goldstein believes the thief or thieves found discarded receipts and bank statements in his building's trash before changing the address associated with his credit card. Mr. Goldstein responded to the situation by purchasing a shredder.

In December, Mr. Goldstein opened a new American Express credit card account, but the first time he logged in to check his balance, he found himself in a different account, one belonging to a woman in Florida. He could see her purchase history and all of her personal information. His first move was to call American Express's customer service department and explain that he'd "hacked into someone's private account by mistake."

After a month of being brushed off by six American Express customer representatives who seemed less than concerned about the issue, Mr. Goldstein contacted The New York Times, which finally got American Express's attention. It turned out, there was no hacking or security failure going on. Mr. Goldstein's user name and password were nearly identical to those of another customer, and he had typed his own information incorrectly, which led him to accidentally sign into her account.

Sadly, the incident shook Mr. Goldstein's already tenuous faith in the Internet to such a degree that he responded by moving his savings from an online savings account to a standard account with a lower interest rate.

Clearly, American Express should have responded to Mr. Goldstein's concerns more quickly. But while Mr. Goldstein's trepidation about Internet services is understandable, he would be far safer if he did his research. While shredding sensitive documents is a good move, it is not an adequate defense against identity theft. And if Mr. Goldstein's banking user name and password were nearly identical to those of another customer, it is likely that both were using a popular and weak password.

Instead of avoiding Internet services, learn to use them safely. Protect yourself from identity thieves by investing in an identity theft protection service, or at least a credit monitoring service. Use strong passwords, with a combination of upper and lowercase letters and numbers. Be sure to install Internet security software on your PC, and set it to update automatically. Don't be afraid of online savings accounts, which generally earn higher interest rates than standard accounts. And if you're nervous about losing files, invest in an online backup service.

New FTC rules will require explanations for higher interest rates

Posted by Caitlin on December 28th, 2009

The Federal Reserve and Federal Trade Commission have issued new rules designed to help inform consumers about the impact of their credit histories on the interest rates they are offered when seeking loans. The rules will require lenders to notify consumers who are offered higher interest rates due to their poor credit histories. Consumers who have been offered terms that are "materially less favorable" than those offered to other applicants will be notified after the terms have been set, but before they are required to commit to the agreement. Impacted consumers will also be entitled to a free credit report. Lenders will also have the option to offer borrowers a free credit score instead of providing the notification. The new rules will go into effect on January 1, 2011.

Many consumers are unaware of the importance of their credit histories, so this policy should be helpful in educating those whose credit scores are hurting them financially. But it's better to know where you stand before applying for a loan in the first place. To learn more, check out our reviews and comparison of credit report monitoring services.

Data breaches are like mice, or cockroaches

Posted by Caitlin on November 30th, 2009

Why are data breaches like mice or cockroaches? Because for every one that you see, there are hundreds or even thousands that you don't see.

According to the FBI's top Internet crimes investigator, the public only knows about a handful of the thousands of data breaches investigated by the FBI. Because companies that suffer from data breaches fear bad publicity, they often fail to report the crime to the FBI, or wait so long that it becomes nearly impossible to track down evidence. When data theft goes unreported, the hackers are free to continue targeting more companies. And since large companies have finally begun to strengthen their data security, hackers have responded by targeting smaller companies that have fewer resources to prevent cybercrime. Since these breaches are smaller, they are less likely to be reported by the press.

If your data is compromised in a large and public data breach, you may be offered a year or two of free credit monitoring or identity theft protection. But if your Social Security data or bank account information is stolen from a small company, you may never even know. In fact, the small company itself may not become aware of the breach for months or years. To proactively safeguard your own identity, consider investing in credit report monitoring or identity theft protection before your data falls into the wrong hands.

Popular retailers decline personal checks

Posted by Caitlin on November 25th, 2009

The Dallas Morning News points out that many popular retailers, including Diesel, True Religion, Ed Hardy, and Lululemon Athletica are no longer accepting personal checks. Gap and Whole Foods are toying with the idea, as well. Since few customers use personal checks these days, some retailers no longer consider the convenience worth the risk of check fraud. Only 4% of consumers plan to pay for their holiday purchases with checks, while more than 42% will use debit cards and 28.3% will use credit cards.

Avoiding check fraud is great, but unfortunately, debit and credit cards are also quite susceptible to fraud. Credit cards offer consumers some protection, but debit cards are less secure. If you plan on doing your shopping with a debit card or credit card this holiday season, check your statements often for unauthorized transactions. And consider investing in a credit report monitoring or identity theft protection service, to ensure that fraudulent accounts are not being opened in your name.

Data Breach Alert: Social Security numbers printed on postcards

Posted by Caitlin on November 23rd, 2009

Last week, the Universal American Action Network, a subsidiary of Universal American Insurance, sent 80,000 postcards to Medicare participants throughout the country. On these postcards, printed above the recipients' names, were their Social Security numbers.

The mistake occurred because Social Security numbers are often used as Medicare account numbers. The Universal American Action Network responded by firing the vendor responsible for the mailing, and offering one year of free credit monitoring to the Medicare members whose Social Security numbers have been compromised.

As important as it is to safeguard your sensitive personal data, particularly your Social Security number, there's just no way of guaranteeing that large organizations treat this data responsibly. Once your data has been compromised by a single careless mistake, your identity is at risk. Credit report monitoring is one way to mitigate this risk. For more comprehensive prevention and detection, you might consider investing in an identity theft protection service.