Ways First Time Homebuyers can prevent identity theft.
In this “credit crunch” world having a good credit score is even more important when you are buying your first home. Maintaing a good credit score is just as important. Here’s some information on your credit score and some steps you can take to maintain it by preventing identity theft.
Why is my credit score different from time to time?
Breakout the sphygmomanometer
I met with a First Time Homebuyer last week and when we took a look at his credit score, we found it was about 50 points lower than six months ago, even though the items on his credit report were all reported the same. Needless to say he was concerned, so I had to break out the ol’ medical book to explain.
Your credit score is like your blood pressure. It will vary up or down depending on a number of factors. If you are applying for a number of credit cards, you’re eating a bunch of Krispy Kremes as far as your credit score is concerned. The Krispy Kremes are guaranteed to raise your blood pressure and the credit inquiries are guaranteed to lower your credit scores.
Conversley, if you are taking care of yourself, eating healthy and getting enough exercise your blood pressure will stay in the healthy range. If you are prudent about your credit use and pay your obligations on time your credit score will remain in the healthy range.
There are three credit bureaus (Experian, Equifax, TransUnion) and they all have slightly different scoring factors, which is why your score may vary a few points among the three. Also, many creditors may not report your account or activity to all the bureaus. In some parts of the country Experian is the primary bureau and local department stores or creditors may only report to them. Same is true of Equifax and TransUnion in other parts of the country.
Mortgage lenders also assign different weight to certain risk factors than would a credit card company for example. For instance, the First Time Homebuyer who is my client is only 22 and has a fairly short credit history, which may not be as important to a credit card company, but to a mortgage lender it might raise concerns about the ability/willingness to pay back a 30 year loan.
Just like your blood pressure, there are a number of factors that can influence your credit score at any given time. I know it’s cool at cocktail parties and/or family gatherings to boast about your “score” but focus on the things that will keep it in the healthy range.
Until they invent a sphygmomanometer (blood pressure monitoring machine) for your credit score, the annual check-up of your free credit report is a good start.
What can I do to maintain a good score?
Maintain healthy credit activities and monitor your score at least once a year. If you are planning on becoming a First Time Homebuyer, start your “exercise regimen” at least six months ahead of time, so you can get down to your “fighting weight” and be ready to go when the time is right to step into the “homebuying ring”.
Your credit score can also be maintained by being diligent about your personal information to avoid identity theft.
Let’s take a look at some relatively simple things you can do, to avoid identity theft. I picked up this information from an attorney who was a victim herself.
Protect your information:
We’ve been hearing that for years, unfortunately the identity thieves are getting better at catching us off guard. I had someone “phishing” for my information through an email letting me know my “pay pal” account was unpaid.
Here are some things to prevent identity theft you may not have thought of:
1.Do not sign the back of your credit cards. Instead, put ‘PHOTO ID REQUIRED.’
2. When paying your credit card bills by check, DO NOT put the complete account number on the ‘For’ line. Instead, just put the last four numbers. The credit card company knows the rest of the number, and anyone who might be handling your check as it passes through all the check processing channels won’t have access to it.
3. Put your work phone # on your checks instead of your home phone. If
you have a PO Box use that instead of your home address. If you do not have a PO Box, use your work address. Never have your SS# printed on your checks. (DUH!) You can add it if it is necessary. But if you have it
printed, anyone can get it.
4. Place the contents of your wallet on a photocopy machine
and copy both sides of each license, credit card, etc. You will know what you had in your wallet and all of the account numbers and phone numbers to call and cancel. Keep the photocopy in a safe place.
I also carry a photocopy of my passport when I travel either here or
abroad. We’ve all heard horror stories about fraud that’s committed on us
in stealing a Name, address, Social Security number, credit card.
Even an attorney can be a victim!
Unfortunately, I, an attorney, have first hand knowledge because my wallet
was stolen last month. Within a week, the thieves ordered an expensive
monthly cell phone package, applied for a VISA credit card, had a credit
line approved to buy a Gateway computer, received a PIN number from DMV to change my driving record information online, and more.
Things you can do to limit the damage
Here’s some critical information to limit the damage in case this
happens to you or someone you know:
5. We have been told we should cancel our credit cards immediately. But
the key is having the toll free numbers and your card numbers handy so
you know whom to call. Keep those where you can find them.
6. File a police report immediately in the jurisdiction where your
credit cards, etc., were stolen. This proves to credit providers you were
diligent, and this is a first step toward an investigation (if there ever is one).
The most important call
But here’s what is perhaps most important of all: (I never even thought
to do this.)
7. Call the 3 national credit reporting organizations immediately to place a fraud alert on your name and also call the Social Security fraud line number. I had never heard of doing that until advised by a bank that called to tell me an application for credit was made over the internet in my name.
The alert means any company that checks your credit knows your information was stolen, and they have to contact you by phone to authorize new credit.
The Important Numbers
Now, here are the numbers you always need to contact about your wallet,
if it has been stolen:
1.) Equifax: 1-800-525-6285
2.) Experian (formerly TRW): 1-888-397-3742
3.) Trans Union : 1-800-680 7289
4.) Social Security Administration (fraud line): 1-800-269-0271
Pass this information along!
The internet is full of chain letters, cartoons, jokes (some good), recipes etc. We have all passed those along to friends and family, why not something really important?
If you, your friends or family members are concerned about identity theft, pass this along to them. Even if they are not buying a house right now, it’s great information.
