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Tips to Prevent Identity Theft
1. Check Your Credit Report.
Periodically check credit reports from each of the three major credit reporting agencies and review your file to make sure the information is correct. 2. Set Up a Fraud Alert Request the major credit reporting agencies to attach a fraud alert to your credit report. When opening a new credit account, lenders are required to contact you by phone to verify you realy want to open the account. 3. Freeze Your Credit In California, you can place a security freeze on your credit reports. Unless provided with a PIN or password to the credit bureau, lenders will not have access to your credit report and an identity theif will not be able to get new loans and credit in your name. Bear in mind that when you do wish to move forward on a new credit application, a "freeze" may delay your application process. 4. Properly Discard Documents Tear up financial solicitations before throwing them away and destroy any other financial documents before disposing of them. Invest in a home paper shredder for all sensitive documents. 5. Monitor Mailings and Phone Calls. Check yoiur mail for unusual mailings appearing to be from lenders or others requesting financial information. Be cautious of giving out personal information to persons calling claiming to be from a company with whomyou do business. 7 Quick Tips to Improve and Maintain High Credit Scores
Why is it important to maintain a good credit history? If you are applying for credit whether an auto loan, credit card, home mortgage loan, home equity line of credit or personal line of credit, your Lender will pull your credit history. Your credit history is one tool that helps the lender determine your creditworthiness as a borrower. It is a way a lender quantifies risk or the likelihood you will pay back a loan.
Secondly, there are trends where employers, government agencies that issue professional licenses and insurance companies are considering using your credit history as one of the criteria for approval. If you are applying for a job, many employers are pulling your credit history in evaluating your overall application. If you are applying for a state or federal issued professional license, your credit history may be one criterion for issuing a license. We’re also seeing a trend in the insurance industry where insurers are examining an applicant’s credit history to determine if they will issue certain insurance policies or possibly use that information to adjust insurance premiums to support risk based pricing. Your credit history may also impact your interest rate that you pay on a loan. It could cost you a pretty penny, perhaps thousands of dollars over the life of a loan if your credit score is below a lenders preferred, pristine borrower threshold. Thus, there is an incentive for you to understand, monitor and manage your credit history. Obtain A Copy of Your Credit History The first thing you want to do is obtain a report of your credit history. By law, you are allowed a free credit report once every 12 months from each of the major credit repositories (TUC - TransUnion, EXP - Experian, EQX - Equifax). You have the right to know what’s in your report, but you have to ask for the information. Go to the Federal Trade Commission recommended site https://www.annualcreditreport.com/cra/index.jsp to order your free credit history report. It should take you less than 5 minutes to order your credit report. Please note that it is free to obtain your credit HISTORY every 12 months and not your credit SCORE. The credit bureaus have the right to charge you a fee for requesting your credit SCORE. In addition, if you order your credit history from this FTC recommended website, you need to be aware that the credit bureaus will attempt to cross sell you other services such as your credit score or credit monitoring services If you decide you need to order your credit score, you will be charged approximately $5 - $15 per credit bureau. Free Credit Monitoring System The repositories will also attempt to have you sign up for credit monitoring for a monthly fee that averages between $7 - $15+ per month. You can save some money and monitor your own credit history for free. Here’s how you can monitor your credit at no charge. Pull a credit history from a different repository every 4 months. For example, on Jan 1, pull a free credit history from TUC. On May 1, pull a free credit history from EXP. On September 1, pull a free credit history from EQX. The following year on Jan. 1 pull another free credit history from TUC and start this cycle all over. It is not a real time monitoring system but it might be sufficient for your purposes. If you are going to be purchasing a home with a mortgage loan or refinancing your current home loan in the near future, it is imperative that you understand your credit history and score as soon as possible. If there are errors, it could take a while to correct them. It is best that you contact a seasoned loan officer ahead of time to allow for sufficient time to make corrections if needed. For example, if you think you might purchase a home in 12 months, meet with a loan officer now to see if your credit score is healthy and if any actions should be taken to correct significant errors. 7 Quick Tips to Improve or Maintain High Credit Scores If you are planning to purchase a home in the near future, here are 7 quick tips to improve and maintain high credit scores. 1. Check your credit history for accuracy. If material errors are in your report, you should follow up in writing with each respective credit bureau and the creditor for correction. Under federal law, the repository and creditor are responsible for correcting inaccurate or incomplete information in your report. You can contact the repositories and creditor by mailing a letter detailing the error. Include copies (not originals) of documents that support your position. In addition to providing your complete name and address, your letter should clearly identify each item in your report that you dispute, state the facts and explain why you dispute the information, and request that the information be deleted or corrected. You may want to enclose a copy of your report with the items in question circled. Send your letter by certified mail, return receipt requested, so you can document what the consumer reporting company received. Keep copies of your dispute letter and enclosures. The repository is required to respond to legitimate inquiries within 30 days. 2. Pay your bills on time (obvious but necessary to state). This is one of the most important things you can do to improve your credit score. You can set up automatic payments from your bank account to help you pay on time. If you are late, you might be able to get the lender to forgive your late fees if you are a long time customer or it was the first late payment. It doesn’t hurt to ask the lender to forgive your late payment fees. It will be more of a challenge to remove the derogatory from your credit history. It doesn’t hurt to ask and if the reason for the late payment was due to the creditor, you have a stronger case to have a derogatory credit item corrected on your credit history. 3. Don’t apply for new credit. A new credit card or new auto loan will reduce your credit score. If you need the new credit card or auto loan, try to acquire the credit after your mortgage loan closes. Note that hard credit inquiry pulls (where you actually apply for new credit and the creditor pulls your credit report) for new credit such as credit cards, mortgage, and auto loan has a negative impact your credit scores. It typically is a very small negativeimpact but if the number of credit inquiries is large or if your credit score is on the cusp of great credit, the impact could be significant. 4. Manage your outstanding credit card balances. If your total outstanding balances of all your credit cards to total approved credit card limit is too high (50% or greater), your credit score will be reduced significantly. A good target is less than 30% utilization (total outstanding balances on credit cards to total credit card approved limits). 5. Don't close your credit card accounts. Closing credit cards will hurt your credit scores. One of the criteria for your credit score is the credit card utilization which is the percentage of credit card balances to total approved credit card limit. If you close out credit cards, your total approved credit card limit is lowered and thus your utilization rate increaseswhich has a negative impact on your credit score. 6. Use your old credit cards periodically. Use your seldom-used credit cards once every 4 months for a small charge and ensure you pay the charge on a timely basis. This helps increase your score. 7. Check your credit card limits. Some credit card lenders do not report your actual credit card limit. If your credit card company does not report your approved limit to the credit bureaus, ask them to report your actual, approved limit. One reason that credit card issuers may be hesitant to report your actual approved limit is the fear they may lose you to the competition. For example if your credit card limit is $50,000 on a particular credit card and your utilization and credit scores are high, credit card competitors may use that information to solicit you to move your business to them. Federal Tax Credit for First Time Home Buyers and Current Home Owners
The federal government gave Americans an early Christmas gift in 2009 – the home buyer tax credit was extended into 2010 and eligibility was significantly expanded. This news bulletin summarizes the homebuyer tax credit program and the modifications from the previous provision.
First Time Home Buyer Tax Credit First-time home buyers will continue to receive a federal tax credit based upon 10% of the purchase price up to a maximum $8,000 on primary home purchases. A first-time Buyer is defined as not having an interest in a principal residence for 3 years prior to purchase. If a home buyer had an interest in a rental property or vacation home, that home buyer might still be eligible to take advantage of the first time home buyer tax credit, please consult with your tax advisor. The new dead lines are as follows. A written binding contract to purchase is required to be in effect before April 30, 2010. The transaction must close by July 1, 2010. The income limits were increased significantly. For singles, the income limit was increased from $75,000 to $125,000. For married couples, the income limit was increased from$150,000 to $225,000. Income is based upon a Modified Adjusted Gross Income. There is a $20,000 phase out. Current Home Owner Tax Credit The government expanded the program so that certain current home owners will be eligible for a federal tax credit based upon 10% of the purchase price up to a maximum of $6,500. The definition of a current homeowner for eligibility is the homeowner must have used the home sold or being sold as a principal residence consecutively for 5 of the previous 8 years. The transaction must be in contract by April 30, 2010 and close by July 1, 2010. The income limits are the same as the first time home buyers ($125,000 for singles and $225,000 for married couples) with a $20,000 phase out. Finally, there is a maximum purchase price of $800,000 for both first time and current home buyers. In other words the credit is not applicable for home purchases greater than $800,000. Please consult your tax professional to confirm your eligibility for the program. |