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What is, and how to Prevent Identity TheftThis guide lists steps you can take to reduce your risk of fraud. If you are a victim of identity theft, please read " What if identity theft happens to you." If your wallet or your Social Security number has been lost or stolen, be sure to place fraud alerts on your three credit reports right away. You can also take our "Am I at Risk for Identity Theft Quiz. |
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Steps how to Prevent Identity Theft |
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The crime of identity theft can happen to anyone. The phone rings and a collection agency demands that you pay past-due accounts for goods you never ordered. The supermarket refuses your checks because you have a history of bouncing them. But you have always paid bills on time. What has happened?
The crime of identity theft is on the rise. Recent surveys show there are currently 7-10 million victims per year, greatly exceeding our earlier estimates.
Using a variety of methods, criminals steal Social Security numbers (SSN), driver's license numbers, credit card numbers, ATM cards, telephone calling cards, and other pieces of individuals' identities such as date of birth. They use this information to impersonate their victims, spending as much money as they can in as short a time as possible before moving on to someone else's name and identifying information. |
Credit Care Sections |
There are two types of identity theft. "Account takeover" occurs when a thief acquires your existing credit account information and purchases products and services using either the actual credit card or simply the account number and expiration date. "Application fraud" is what some experts call "true name fraud." The thief uses your SSN and other identifying information to open new accounts in your name. Victims are not likely to learn of application fraud for some time, because the monthly account statements are mailed to an address used by the imposter.
In contrast, victims learn of account takeover when they receive their monthly account statement. This guide discusses strategies for reducing the risk of both types of fraud.
Generally, victims of credit and banking fraud are liable for no more than the first $50 of the loss. (15 USC sec. 1643) In many cases, the victim will not be required to pay any part of the loss.
Even though victims are usually not saddled with paying their imposters' bills, they are often left with a bad credit report and must spend months and even years regaining their financial health. In the meantime, they have difficulty getting credit, obtaining loans, renting apartments, and even getting hired. Victims of identity theft find little help from the authorities as they attempt to untangle the web of deception that has allowed another person to impersonate them.
Stealing wallets used to be the best way identity thieves obtained SSNs, driver's licenses, credit card numbers and other pieces of identification. While still employed, identity thieves now use more sophisticated means:
- "Dumpster diving" in trash bins for unshredded credit card and loan applications and documents containing SSNs.
- Stealing mail from unlocked mailboxes to obtain newly issued credit cards, bank and credit card statements, pre-approved credit offers, investment reports, insurance statements, benefits documents, or tax information. Unfortunately, even locked mailboxes may not stop the most determined thief.
- Accessing your credit report fraudulently, for example, by posing as an employer, loan officer, or landlord.
- Obtaining names and SSNs from personnel or customer files in the workplace.
- "Shoulder surfing" at ATM machines and phone booths in order to capture PIN numbers.
- Finding identifying information on Internet sources, via public records sites and fee-based information broker sites.
Take these steps to reduce your risk of becoming a victim of identity theft:
You
cannot prevent identity theft. Criminals can commit identity
theft relatively easily because of lax credit industry
practices and the ease of obtaining SSNs. But you can reduce
your risk of fraud by following the tips in this guide.
The most important advice we can give you is to check your
credit report at least once a year. If you are a victim
of identity theft, you will catch it early by checking
your credit report regularly.
Reducing access to your personal data:
1. To
minimize the amount of information a thief can steal, do
not carry extra credit cards, your Social Security card,
birth certificate or passport in your wallet or purse, except
when needed. At work, store your wallet in a safe place.
2. If
possible, do not carry other cards in your wallet
that contain the Social Security number (SSN), except on
days when you need them.
3. To reduce the amount of personal information that is "out there," consider the following:
- Remove your name from the marketing lists of the three credit reporting bureaus -- Equifax, Experian (formerly TRW) and Trans Union. Call 888-5OPTOUT or go online to www.optoutprescreen.com. This will limit the number of pre-approved offers of credit that you receive. These, when tossed into the garbage, are a potential target of identity thieves who use them to order credit cards in your name. (See PRC Fact Sheet 6 for more information about credit reporting, www.privacyrights.org/fs/fs6-crdt.htm.)
- Sign up for the Federal Trade Commission's National Do Not Call Registry and the Direct Marketing Association's Telephone Preference Service. Your name is added to name deletion lists used by nationwide marketers. You may also need to register for your state's "do not call" list, if it has one.
- National Do Not Call Registry, www.donotcall.gov, (888) 382-1222
- Do Not Call Registry interaction with state registries:
- www.ftc.gov/bcp/conline/edcams/donotcall/statelist.html
- Have your name and address removed from the phone book and reverse directories. (See PRC Fact Sheet 4 on tips for reducing junk mail, www.privacyrights.org/fs/fs4-junk.htm)
- Opt-out of the sale or
sharing of your financial information when given
the opportunity by your bank, credit card companies,
insurance companies, and investment firms. (Read
PRC Fact Sheet 24, www.privacyrights.org/fs/fs24-finpriv.htm.)
4. Install
a locked mailbox at your residence to deter mail theft. Or
use a post office box or a commercial mailbox service. When
you are away from home for an extended time, have your mail
held at the Post Office, or ask a trusted neighbor to pick
it up.
5. When
ordering new checks, pick them up at the bank. Don't have
them mailed to your home. If you have a post office box,
use that address on your checks rather than your home address
so thieves will not know where you live.
6. When
you pay bills, do not leave the envelopes containing your
checks at your mailbox for the postal carrier to pick up,
or in open boxes at the receptionist's desk in your workplace.
If stolen, your checks can be altered and then cashed by
the imposter. It is best to mail bills and other sensitive
items at the drop boxes inside the post office rather
than neighborhood drop boxes.
Credit cards and
credit reports:
7. Reduce
the number of credit cards you actively use to a minimum.
Carry only one or two of them in your wallet. Consider canceling
unused accounts. Even though you do not use them, their account
numbers are recorded in your credit report, providing a tempting
target for identity thieves. But be aware that reducing the
number of credit card accounts might lower your
credit score. Part of your score is determined by having
credit cards and installment loans and making timely payments.
(For more information on credit scoring, visit
here.)
8. Keep
a list or photocopy of all your credit cards, bank accounts,
and investments -- the account numbers, expiration dates
and telephone numbers of the customer service and fraud departments
-- in a secure place (not your wallet or purse) so you can
quickly contact these companies in case your credit cards
have been stolen or accounts are being used fraudulently.
9. Never
give out your SSN, credit card number or other personal information
over the phone, by mail, or on the Internet unless you have
a trusted business relationship with the company and you have
initiated the call. Identity thieves have been known to call
their victims with a fake story that goes something like
this. "Today is your lucky day! You have been chosen
by the Publishers Consolidated Sweepstakes to receive a free
trip to the Bahamas. All we need is your Social Security
number, credit card number and expiration date to verify
you as the lucky winner."
10. Always
take credit card receipts with you. Never toss them in a
public trash container. When shopping, put receipts in your
wallet rather than in the shopping bag.
11. Never
permit your credit card number to be written onto your checks.
It's a violation of California law (Civil Code sec. 1725)
and laws in many other states, and puts you at risk for fraud.
12. Watch
the mail when you expect a new or reissued credit card to
arrive. Contact the issuer if the card does not arrive.
13. Order
your credit report at least once a year. Federal law gives
you the right to one free credit report each year from the
three credit bureaus: Equifax, Experian, and TransUnion.
If you are a victim of identity theft, your credit report
will contain the tell-tale signs – inquiries that were
not generated by you, as well as credit accounts that you
did not open. The earlier you detect fraud, the easier and
quicker it will be to clean up your credit files and regain
your financial health.
We recommend that you stagger
your requests and obtain one report each four months. That
way, you can monitor your credit reports on an ongoing basis.
For best results join a credit
monitoring company that alerts you any time someone request
credit in your name. For more information on your free credit
reports, visit the Federal Trade Commission web site at www.ftc.gov/bcp/conline/pubs/credit/freereports.htm.
How to order your free annual credit report:
- By telephone: (877) 322-8228.
- Online: www.annualcreditreport.com Report with no score.
- By mail. Print out the order
form here:
https://www.annualcreditreport.com/cra/requestformfinal.pdf - FREE 3-in-1 Credit Report with trial! Click here!
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Refinance Guige |
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Step 1: Check your credit report
<p>If you are considering refinancing your mortgage, one of the first steps you should take is checking your credit. By refinancing, you are requesting a new loan with better terms and rates, so you want to be sure all of your credit information is correct, allowing you to get the best possible interest rate. <br />
<br />
Your credit report is based on information gathered by the three credit bureaus (Experian, Equifax and TransUnion). They gather your personal information and credit payment history to compile your credit report. From that they calculate your credit score, a number between 300 and 850. 850 indicates the strongest possible credit score and 300 is the worst. <br />
<br />
When refinancing, lenders will look at your credit report and credit score to determine your credit worthiness. Lenders offset the risk of lending to someone who has a low credit score by increasing their interest rates or lowering the limit they are allowed to borrow. That is why you want to be sure that all of the information on your credit report is correct. Otherwise, you could be charged a great deal more than you deserve, all because of a simple error. <br />
<br />
Since mistakes sometimes occur, especially with people with similar names and social security numbers. If you find an error on your credit report, immediately contact the credit bureau to have the error fixed. This can take time, so it's important to do this before you begin the refinance process. <br />
<br />
And don't forget, you entitled to a free credit report once a year from each of the three credit bureaus. You can also get a free credit score with a trial membership in the LendingTree Credit Monitor program. </p>
<p><a href="http://www.emjcd.com/click-1762781-10499336?url=www.lendingtree.com/smartborrower/Guide-to-refinancing-your-home/Step-2-Find-the-right-loan-for-your-needs.aspx">Next step: Find the right refinance loan for your needs</a></p>
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Step 2: Find the right loan for your needs
<p>Refinancing is taking out a new mortgage, often with better interest rates and terms, to pay off your old mortgage. But there are other reasons to refinance, and when refinancing you should have a goal in mind. Do you want to lower your monthly payments? Save interest over the life of your loan? Use your home equity to pay for college expenses? Your goal will determine which type of refinance mortgage is right for you. <br />
<br />
It's important, however, to understand the differences between the types of refinancing available, along with their costs and benefits, before deciding which option is right for you. <br />
<br />
<strong>What type of refinancing is right for you? <br />
</strong><br />
<strong>1. Rate and Term Refinancing</strong> <br />
For many people, the aim of refinancing is to either lower their monthly payments, pay their mortgage down faster, or reduce the amount of interest on their loan. These homeowners generally wish to keep their loan amount the same, while simply changing the way they pay it off. This is called rate and term refinancing, and it may be desirable: </p>
<ul>
<li><strong>To get a better fixed interest rate. <br />
</strong>If interest rates have fallen since you took out your mortgage, refinancing may enable you to get a better rate and lower monthly payments. For example, a $160,000 fixed rate mortgage with a 30-year term at 8 percent requires a monthly payment of $1,175. Lowering the rate to 6 percent drops the monthly payment to $960. </li>
<li><strong>To stabilize your payments.</strong> <br />
Perhaps the interest rate of your adjustable rate mortgage has gone up every adjustment period and you're concerned the trend will continue. Locking it in for a fixed term at its current rate may mean higher payments initially but will prevent you from being hit with increasing monthly payments should interest rates continue to rise. </li>
<li><strong>To obtain better loan features.</strong> <br />
Your credit rating might have been mediocre when you took out your mortgage, but it has since improved. Refinancing may enable you to get a lower rate or, in the case of an adjustable rate mortgage, a more protective cap (a limit on how much your payments can increase). </li>
<li><strong>To build your home equity more quickly.</strong> <br />
A recent change in your financial situation may make it possible for you to pay off your loan faster by increasing your monthly payments. Refinancing a 30-year $100,000 mortgage at 6 percent with a 15-year $100,000 mortgage at the same rate would raise your monthly payments from $600 to $844 but allow you to pay down the principal in half the time and save you almost $64,000 in interest over the life of the loan. However, you can also build equity more quickly without refinancing by making additional principal payments each month. </li>
<li><strong>To reduce your monthly payments. <br />
</strong>If you are having difficulty meeting your monthly payments, you may wish to refinance your mortgage for a longer term. For example, increasing the term of a $150,000 mortgage at 7 percent from 15 years to 30 years would reduce your monthly payments from $1,350 to $1,000. </li>
</ul>
<p><strong>2. Cash-out Refinancing</strong> <br />
The other major category of refinancing involves taking out a new mortgage with a larger principal than the one you're currently carrying. This is called cash-out refinancing and its goal is not simply to pay less interest, but to turn some of your home equity into cash. (Remember, though, that the loan is secured by your home.) For example: </p>
<ul>
<li><strong>To free up money for a major expense.</strong> <br />
You may have built up $180,000 in equity after 20 years of mortgage payments, and now you have two children whom you want to help through college. Rather than taking out a personal loan (which generally carries a higher interest rate with no tax advantage), you can refinance your mortgage, adding $40,000 to the principal, and use that money for tuition. </li>
<li><strong>To consolidate debt.</strong> <br />
Perhaps you have $50,000 in credit card debt with interest rates as high as 18 percent. Now that you have curtailed your spending, you decide to refinance your mortgage, adding $50,000 to the principal and locking it in at 6 percent. This will allow you to consolidate your debt and pay it off at a third of its present rate. </li>
<li><strong>To combine first and second mortgages.</strong> <br />
If you have a first mortgage of $100,000 and a home equity loan of $30,000, each with a different lender, you may wish to raise the principal of your first mortgage to $130,000 to cover both loans, with the aim of getting a better rate and more convenience. </li>
</ul>
<p><strong>Is refinancing right for you? <br />
</strong>As there is a cost involved with refinancing, you must determine whether refinancing makes financial sense for you. The benefits of refinancing add up over time, so if you're planning to move in a year or two, any potential savings will likely never be realized. In addition, factor in that you may be extending the time it takes to own your home "free and clear." In general, the longer you plan to stay in your current home, the more sense it makes to consider refinancing. </p>
<p><a href="http://www.emjcd.com/click-1762781-10499336?url=www.lendingtree.com/smartborrower/Guide-to-refinancing-your-home/Step-1-Check-your-credit.aspx">Step 1: Check your credit report and score.</a></p>
<p><a href="http://www.emjcd.com/click-1762781-10499336?url=www.lendingtree.com/smartborrower/Guide-to-refinancing-your-home/Step-3-Compare-offers-and-perform-break-even-analysis.aspx">Next step: Compare offers.</a></p>
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Step 3: Compare offers and perform break-even analysis
<p>Once you're decided that refinancing makes sense for your situation, you need to shop around so you can compare offers and perform a detailed break-even analysis. <br />
<br />
<strong>The break-even point <br />
</strong>In the end, deciding whether the cost of refinancing is worth it comes down to a simple question: "How long will it take before I start to save money?" In theory, this is a simple calculation. You start with the amount you will save by lowering your monthly payment. Then you add up all the costs associated with refinancing and divide the total by your monthly savings. This will reveal the number of months it will take to reach the break-even point. <br />
<br />
For example, let's assume that refinancing would lower your payment from $1,000 to $800 (for a savings of $200 per month) and your prepayment penalty, closing costs and points add up to $5,000. Divide $5,000 by $200 and you'll see that it would take 25 months to realize the savings. <br />
<br />
In reality, however, your break-even point also depends on other factors, including your tax situation and whether you pay closing costs upfront or add them to the principal of your new mortgage. If you are refinancing and your home has appreciated in value, you may also be able to save by canceling your private mortgage insurance. <br />
<br />
<strong>Comparing offers <br />
</strong>One of the first things you should look at when comparing refinance offers is the interest rate. Even a slight difference in interest rates can mean a lot of money over the life of a loan. Make sure you understand if the rate offered includes discount points, which is money you pay up front to lower your interest rate. <br />
<br />
But the interest rate isn't the only rate to look for. Another good benchmark for comparing offers is their annual percentage rate (APR). This figure combines the interest costs and other fees charged by a lender over the life of the loan, and expresses them as a yearly percentage. Make sure to ask for an itemized list of what's included in each APR calculation, so you know you're making a fair comparison, as some lenders don't include all of their fees in the calculation. <br />
<br />
Other details matter too: Do the lock in terms vary? Is there a pre-payment penalty? What are all the closing costs and fees? Ask for a read a Good Faith Estimate (GFE) for each loan, and ask questions if something doesn't make sense. </p>
<p><a href="http://www.emjcd.com/click-1762781-10499336?url=www.lendingtree.com/smartborrower/Guide-to-refinancing-your-home/Step-2-Find-the-right-loan-for-your-needs.aspx">Step 2: Find the right loan for your needs.</a></p>
<p><a href="http://www.emjcd.com/click-1762781-10499336?url=www.lendingtree.com/smartborrower/Guide-to-refinancing-your-home/Step-4-Closing.aspx">Next step: Close on your refinanced mortgage.<br />
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Step 4: Closing
<p>Completing a refinance is much simpler than closing on a home purchase. Without another party involved there are fewer hurdles. <br />
<br />
Your lender will likely require that your home be appraised again before closing on your loan. Lenders use your appraisal to determine your loan amount, to ensure that the home isn't worth less than what they are lending. You may also want to review your private mortgage insurance policy at this point; if your loan-to-value ratio is less than 80 percent, your lender most likely won't require this. <br />
<br />
Once the appraisal is complete, closing should be simple, though it will still require a fair amount of paperwork. It's still critical to ask your lender for all the loan paperwork a few days in advance so you have time to review it. </p>
<p><a href="http://www.emjcd.com/click-1762781-10499336?url=www.lendingtree.com/smartborrower/Guide-to-refinancing-your-home/Step-3-Compare-offers-and-perform-break-even-analysis.aspx">Step 3: Compare refinance loan offers. <br />
</a></p>
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