Tag: credit
Why You Should Consider Freezing Your Credit Reports Even Before Your Information Is Stolen

Why You Should Consider Freezing Your Credit Reports Even Before Your Information Is Stolen

By Patricia Sabatini, Pittsburgh Post-Gazette (TNS)

PITTSBURGH — So far this year, more than 100 data breaches have resulted in an estimated 153 million financial records being stolen — hitting big names such as Experian, T-Mobile, Anthem and U.S. government personnel records — with most of the victims being offered free credit monitoring services as a check against ID theft.

But a new report by the Washington-based consumer group U.S. PIRG says credit monitoring isn’t nearly enough. The group is urging all consumers to consider freezing their credit reports as the only way to stop ID thieves from taking out loans, credit cards and other credit accounts in victims’ names.

“Whether your personal information has been stolen or not, your best protection against someone opening new credit accounts in your name is the security freeze,” said Mike Litt, consumer program advocate at U.S. PIRG. “Credit monitoring services may tell you (about a fraudulent account) but only after you’ve been victimized.”

When a freeze is in place, credit bureaus are prevented from releasing a file to potential creditors without the consumer’s permission. Because most businesses won’t open credit accounts without checking a consumer’s credit history, ID thieves are locked out.

There are drawbacks to consider, including fees, which vary by state; some limitations; and the potential for delays when consumers legitimately want to apply for credit. People must lift freezes if they want to apply for mortgages, car loans, credit cards or other type of credit.

A thaw can be activated online or by phone using a personal identification number and choosing the number of days that the thaw applies. It can be a general thaw or apply only to a specific creditor.

There is no fee to permanently lift a freeze, which automatically expires in seven years.

Victims of ID theft who provide a police report can freeze and thaw their files at no charge, while people 65 and older can initiate a freeze or free but must pay $10 for a thaw.

For the broadest protection, experts recommend that consumers freeze their credit reports with all three main credit bureaus — Equifax, Experian and TransUnion — because a freeze request with one doesn’t extend to the others. Experian said it froze 433,558 files through October this year, up from 160,639 in all of 2014.

A consumer applying for credit who wants to temporarily lift a freeze should find out which credit bureau the lender is using to assess creditworthiness and request a thaw from that particular bureau.

In most cases, a report can be thawed within 15 minutes. But since the law allows credit bureaus up to three days to lift a freeze, shoppers could be blocked from getting instant store credit — the kind that promises a discount of 10 percent or more for signing up for a credit card at the register.

Freezes also could interfere with other products and services that may require a credit check, such as getting insurance, renting an apartment, hooking up to a utility or opening a cell phone account.

The U.S. PIRG report noted that neither credit monitoring nor a security freeze can detect or prevent unauthorized use of existing credit accounts or other types of fraud or identity theft such as theft of tax refunds or medical services. Many banks and credit card companies have mechanisms in place to detect existing account fraud and remove unauthorized purchases.

The report contended that paid credit monitoring services, which typically cost from around $10 to $20 a month, are not worth the expense because consumers can essentially monitor their own reports free. Federal law requires each of the main credit bureaus to provide consumers with a free credit report once a year.

Litt acknowledged that a credit monitoring service might detect theft faster than consumers could on their own, depending on when consumers happen to check their reports.

For victims of data breaches, an alternative to a credit freeze is to place fraud alerts on credit reports. The alerts are free but must be renewed every 90 days. Victims of identity theft can sign up for extended fraud alerts that last seven years.

A fraud alert lets creditors know that they should take special precautions before extending credit. An alert with one of the three main credit bureaus is automatically extended to the other two.

Alerts are weaker than a freeze because creditors aren’t legally bound to abide by an alert.

For more information, visit www.identitytheft.gov. To download the U.S. PIRG report, visit uspirg.org. To order copies of your free credit reports, visit www.AnnualCreditReport.com

The details

What it does: Blocks credit bureaus from releasing information from your credit report to lenders and other businesses without your permission. That effectively stops identity thieves from opening a credit card, cell phone account or other accounts in your name.

What it costs: For Pennsylvania residents, it costs $10 to initiate a freeze and $10 to temporarily lift (thaw) one. There’s no charge to permanently remove a freeze. ID theft victims who submit a police report, and people 65 and older do not have to pay to initiate a freeze. ID theft victims also can request a thaw at no charge.

Where to start: For information on credit freezes, visit each of the three main national credit bureaus’ websites, or call them toll free:

www.freeze.equifax.com
www.experian.com
www.transunion.com

1-888-909-8872.

Where to turn

Victims of identity theft can visit the Federal Trade Commission’s website, www.identitytheft.gov

People should stagger their requests with each bureau every four months or so to keep tabs on their credit reports throughout the year, U.S. PIRG said.

©2015 Pittsburgh Post-Gazette. Distributed by Tribune Content Agency, LLC.

Photo: A new report by consumer grou pU.S. PIRG is urging onsumers to consider freezing their credit reports as the only way to stop ID thieves from taking out loans, credit cards and other accounts. (Fotolia/TNS)

Which Type Of Lender Is Right For You?

Which Type Of Lender Is Right For You?

By Crissinda Ponder, Bankrate.com (TNS)

There was a time when most homebuyers obtained their mortgage loans through their banks or credit unions. Today, however, there are a number of additional home-financing providers. Which one is right for you? Let’s take a look at the options.

DIRECT LENDERS

Banks, mortgage banks and nonbank lenders all are direct lenders; that is, employees review your application and make the decision to lend you money. Typically, the institution will sell your loan on the secondary market.

Benefits of a direct lender:

– Reliability: You probably know and trust the institution. It is regulated by state and federal agencies and likely has strong ties with your community.

– One-stop shopping: You deal directly with the source of your loan.

– Savings: As the loan originator, an institution may save you money in the loan process.

– Speed: A direct lender also may process your loan faster than other providers.

Risks of a direct lender:

– Limited choice: Lenders offer only their own programs. To comparison shop, you will need to speak with several lenders.

MORTGAGE BROKERS

A mortgage broker is a middleman who may represent the mortgage loan products of many lenders. The broker’s goal is to match you with the loan product that best meets your needs at the best price. Once your loan is approved, you will usually deal directly with the loan originator or their mortgage service provider.

Benefits of a mortgage broker:

– Variety: By shopping across a range of different programs and lenders, a mortgage broker may find you a better fit than a direct lender could.

– Qualifying: A mortgage broker can best steer you to the national or regional lenders that are most likely to accept your application based on your financial and personal information.

– Savings: You may get a more favorable loan rate.

– Speed: A broker saves you time shopping for a loan.

Risks of a mortgage broker:

– Hidden costs: Some mortgage brokers attempt to increase their profit by writing hidden costs into your loan. Best hedge: Know the loan process and ask questions.

Most financial institutions offer a limited menu of loan products, just as mortgage banks do. They typically hold mortgages in their portfolios or sell them on the secondary market.

HOME BUILDERS AND REAL ESTATE AGENCIES

Many large home builders and real estate agencies now own an in-house mortgage company to make it easier to buy their properties. These affiliated companies may operate as a mortgage banker or broker.

WHICH LENDER IS RIGHT FOR YOU?

Depending on your credit history and circumstances, you may benefit by using one source of mortgage loans over another.

WHAT KIND OF BORROWER ARE YOU AND WHAT’S THE BEST SOURCE FOR YOU TO SHOP?

– Excellent credit, easy access to financial documents, longtime employee of one company: Internet lender, bank or mortgage bank.

– Self-employed borrower, don’t want to share data about income or assets with mortgage provider: Mortgage broker.

– Repeat home shopper, rate-and-term refinance customer, financially savvy: Internet lender.

– Adjustable-rate mortgage shopper, relationship customer with many accounts at one institution: Bank, thrift.

– Convenience shopper, wants easiest loan to get, even if it costs more: Home builder or real estate agency lender.

TIPS FOR WORKING WITH LENDERS

– Get recommendations: Ask friends and family members for suggestions, especially if they’ve recently obtained a loan.

– Check credentials: Mortgage bankers are regulated by either your state’s department of banking or division of real estate.

Check with the agency to see if a lender is in good professional standing. Mortgage brokers may or may not be state-regulated. If not, check with the local chapter of the National Association of Mortgage Brokers or the Better Business Bureau to see if their record is clean. The Library of Congress has a good index of state and local government websites.

– Do your homework: Learn about typical mortgages and ask questions when something looks amiss; a broker may be trying to pad closing costs or other fees at your expense.

– Take care online: There are plenty of attractive deals online, but first make sure you’re dealing with a reliable broker or lender.

– Extra care during peak season: Unscrupulous lenders and brokers are more apt to quote you bogus rates or slip in extra costs during peak homebuying season, in hopes you won’t notice.

Photo: Be careful out there. Thomas Kohler/Flickr

Argentina Deposits Debt Payment, Defying U.S. Judge

Argentina Deposits Debt Payment, Defying U.S. Judge

Buenos Aires (AFP) – Argentina deposited a $161 million payment on its restructured debt Tuesday, defying a U.S. judge who ruled it in contempt of court and ordered it to pay two “holdout” creditors first.

The Argentine government said it had deposited the payment in a Buenos Aires account of the state-run Banco Nacion.

The South American country is trying to meet its obligations to creditors who agreed to take steep losses on their bonds after it defaulted on $100 billion in debt during its 2001 economic crisis.

Cabinet chief Jorge Capitanich brushed off Monday’s contempt ruling by U.S. federal judge Thomas Griesa, saying it had “no basis or impact.”

Griesa found Buenos Aires had acted illegally to dodge his orders blocking it from servicing its restructured debt until it pays the two U.S. hedge funds the full $1.3 billion it owes them.

The dispute with the two holdouts, which the Argentine government has branded “vulture funds,” has derailed the country’s 2005 and 2010 restructuring deals, forcing it into a new default in July.

To get the restructuring plan back on track, Argentina has passed a law permitting the government to pay creditors in Buenos Aires, Paris or another venue of their choice — skirting the New York judge’s freeze on the bank accounts it uses to service its debt.

Capitanich said Griesa’s ruling was “expected,” and repeated the Argentine foreign ministry’s statement that it violated international law.

“The judge has unleashed a true legal rigamarole. Every decision he makes gets worse,” Capitanich told journalists in Buenos Aires.

He said any potential contempt penalties — which could amount to a $50,000-a-day civil fine, as requested by the hedge funds — would be “inapplicable.”

“Sovereign immunity law prohibits contempt penalties against foreign states,” he said.

More than 92 percent of Argentina’s creditors agreed to take losses of up to 70 percent on the face value of their bonds in order to get the struggling country’s debt repayments back on track after the 2001 default.

But the two hedge funds, U.S. billionaire Paul Singer’s NML Capital and U.S.-based Aurelius Capital Management, refused to accept the write-down and took the country to court, winning a ruling from Griesa that crippled Argentina’s restructuring plan.

Blocked from paying its restructured debt, Argentina missed a $539 million interest payment and entered default again on July 30.

Tuesday’s deposit aims to circumvent the judge’s ruling on the day the deadline expires for a new $200 million payment.

AFP Photo/Alejandro Pagni

One In Three Adults Admits To ‘Financial Infidelity’

One In Three Adults Admits To ‘Financial Infidelity’

By Heidi Stevens, Chicago Tribune

CHICAGO — One in three adults admitted to “financial infidelity” in a recent National Endowment for Financial Education poll, and 76 percent of those respondents said the deception affected their relationship. (“It meant nothing!” may be harder to get away with when “it” affects your credit score.)

The national survey of 2,035 respondents age 18 and older found that three in 10 have hidden a purchase, bank account, statement, bill or cash from their partner. Sixteen percent said they’ve lied to their partner about how much debt they have, and 14 percent admitted lying about their income.

One of the most fascinating revelations is why couples say they aren’t more forthright about their finances.

Just 16 percent said they lied because they were “embarrassed or fearful about my finances and didn’t want my partner to know.” Another 15 percent said they had never discussed finances with their partner and “feared they would disapprove” of the true picture.

A full 35 percent of respondents replied, “I believe that some aspects of my finances should remain private, even from my partner.”

The deceived partners don’t appear to agree, with 47 percent of respondents reporting that the deception eventually led to an argument and 33 percent reporting it led to “less trust in the relationship.” Thirteen percent said it “ultimately resulted in divorce.”

“Secrets cause fractures, and fractures cause divisions,” says relationship and conflict resolution expert Melanie Ross Mills. “When we’re hiding anything from someone we are supposed to be partnering with — in business, in marriage or in friendship — it’s going to cause a division.”

Financial experts at the National Endowment for Financial Education recommend couples take a “life values” quiz to help them start talking more honestly about money. (Questions touch on your thought process when purchasing a new car, how you define your ideal home and neighborhood, how you handle overdue bills, etc.)

Mills recommends scheduling regular “couples compass” meetings.

“Go through all the major areas — parenting, finances, intimacy — and have an honest discussion about where you’re on the same page and where you’re not,” she says. “If you’re not bringing each other in on your long-term plans, you’re most likely not fully investing in the partnership.”

Photo: 401(K) 2012 via Flickr