| Q: Will checking my credit lower my credit score?
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| Answer-Checking your own credit report for personal use will not lower
your credit score. Times when credit inquiries do lower your credit score include when a lender reviews your credit report when you
apply for a loan or line of credit.
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| Q: Why Should I Worry About Credit Fraud?
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| Answer - Credit fraud affects all of us. When
thieves obtain goods or cash through credit fraud, it is the credit card issuer that bears the burden of the loss and we all pay
because the credit card companies covers its costs by charging its cardholders higher fees and interest rates.
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| There are several different kinds of credit fraud. One of the easiest is when one steals your credit card. Here you can safeguard
against fraud because you can report the card stolen.
A stolen account number can often be just as effective for a criminal as a stolen credit card,
especially if information such as the expiration date or your billing address is also available to him or her.
You may not know someone is using your account until you notice charges or cash advances you did not make
on your monthly statement.
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| Criminals can steal credit account numbers in many different ways, such as collecting them in telephone or Internet scams,
copying them from credit cards when the owner isn't looking, or gathering them from discarded receipts or account statements
in people's trash. Gathering information from people's trash, also known as "dumpster diving," is also effective for criminals intending
to perpetrate the even more hard-to-catch identity fraud. "Identity theft" describes when someone uses your personal information,
such as your name and Social Security number, to either take over current credit accounts or open new ones using your identity.
An identity thief might also rent an apartment, take a job, or even commit crimes using your name, but the identity fraud generally
involves using your good credit rating without your knowledge.
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| Tactics for stealing your identity include stealing personal information and then using it to apply for credit or,
sometimes, stealing preapproved credit card offers from your trash and sending them in with a change of address.
A clever identity thief can use your name and information for months without your knowledge, sometimes making
the minimum payments on any accounts s/he opens so as to keep that credit line available longer. You might not find
out what is happening until s/he uses the credit to its maximum limit and then stops paying, causing the creditor to send
collectors out to find you to settle the debt.
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One of the best ways to guard against this is to check your credit regularly. Most organizations suggest checking your credit once a year.
At the Consumer Debt Group we suggest that you check once a quarter. Also take steps to safeguard your credit cards like the following:
- Safeguard your credit cards just as you would cash.
- Reduce the number of cards you carry; just one or two are sufficient for everyday use.
- Minimize the amount of personal information a criminal can steal. Don't carry your Social Security card,
birth certificate or passport with you on a routine basis.
- Keep a list of all of your credit cards, including account numbers, expiration dates, and issuer phone numbers,
so that you can notify creditors quickly in case of theft or loss.
- Sign any new cards as soon as you receive them.
- If one of your credit card bills is late, call the card issuer's customer service number immediately.
Make sure that your bill has not been diverted to a different address.
- Review your statements carefully each month to make sure all charges are accurate.
- Report billing errors and lost or stolen cards to your credit card issuer immediately.
- Never give anyone a card number or other personal information over the telephone unless you initiated the call.
- Shred preapproved credit card offers, credit card receipts, copies of airline tickets, travel itineraries, and anything
else that displays your credit card information before putting them in the trash.
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| Q: What is a credit score?
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| Answer -A credit score is a number that reflects your credit risk level,
typically with a higher number indicating lower risk. It is generated through statistical models using elements from your credit report;
however, your score is not physically stored as part of your credit history on the credit file. Rather, it is typically generated at the time
a lender requests your credit report, and is then included with the report viewed by the creditors. Your credit score is a fluid number,
and it changes as the elements in your credit report change. For example, payment updates or a new account could cause your score
to fluctuate. There are many different credit scores used in the financial service industry. Your score may be different from lender to
lender (or from car loan to mortgage loan), depending on the type of credit scoring model that was used.
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| Q: Why are credit scores used?
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| Answer- Before credit scores, lenders physically looked over
each applicant's credit report to determine whether to grant credit. A lender might deny credit based on a subjective judgment
that a consumer already held too much debt, or had too many recent late payments. Not only was this time consuming, but
human judgment was prone to mistakes and bias. Lenders used personal opinion to make a decision about an applicant that
may have had little bearing on the applicant's ability to repay debt. Credit scores help lenders assess risk more fairly because
they are consistent and objective. Consumers also benefit from this method. No matter who you are as a person, your credit
score only reflects your likelihood to repay debt responsibly, based on your past credit history and current credit status.
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| Q: Who uses credit scores and how are they used?
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| Answer- Banks, credit card companies, auto dealers, retail stores and most other lenders that issue credit or loans use
credit scores to quickly summarize a consumer's credit history, saving the need to manually review an applicant's credit
report and provide a better, faster risk decision. Although many additional factors are used in determining risk, such as
an applicant's income vs. the size of the loan, a credit score is a leading indicator of one's basic creditworthiness.
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| Q: What information impacts my credit score?
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Answer- The information that impacts a credit score varies depending
on the score being used. Generally, credit scores are affected by elements in your credit report, such as:
- Number and severity of late payments
- Type, number and age of accounts
- Total debt
- Recent inquiries
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| Q: What information impacts my credit score?
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| Answer- Federal law carefully regulates how information about your credit can be used. The two most
important laws for credit-active consumers are probably the Equal Credit Opportunity Act (ECOA) and the
Fair Credit Reporting Act (FCRA).
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| Q: What are my Consumer Rights?
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| Answer- Federal law carefully regulates how information about your credit can be used. The two most
important laws for credit-active consumers are probably the Equal Credit Opportunity Act (ECOA) and the
Fair Credit Reporting Act (FCRA).
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| The ECOA mandates that every consumer who applies for credit has an equal chance to obtain it.
This is not a guarantee that credit will be granted, but rather that the factors used to determine whether
an application is accepted or rejected will be consistent and consistently applied for all applicants.
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| The FCRA ensures that consumers' rights and privacy are protected even as the credit reporting industry makes
it possible for credit histories to be transmitted so quickly that stores can offer instant credit to consumers who qualify.
Approach lenders with confidence by checking your credit report first. To learn how to obtain a free credit report, go to
our Financial library
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| Q: How Can I Learn More About Credit And The Law?
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| The federal government maintains several informative
World Wide Web sites with lots of information about consumer credit issues.
These two relate to the FCRA specifically:
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| Q: How is a 3 Bureau Credit Report Different From a Single-Bureau Report?
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| TThe 3 Bureau report includes your complete information from all 3 US credit bureaus -
Experian, Equifax, & TransUnion. A single-bureau report contains your information on file at one of those 3 bureaus.
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