The Latest in a Series of Attempts to Curb Credit Card Fraud

One of the reasons why we are urged to monitor our credit reports is because of the huge amount of credit card fraud that has been plaguing consumers around the world. Recent research has indicated that banks are among the easiest to infiltrate simply because their automated tellers on the phone require so little information before giving the caller access to your accounts. New technology which rolled out last month is an effort to ensure the identity of the person using the credit card in an effort to prevent fraudulent use of other people’s credit information.

What many people might not understand is that the thief doesn’t actually need to have possession of your card. Yes, there are times when your credit cards are lost or stolen, but credit card fraud is most often the case of someone gaining access to your account number and your personal identifying information such as your address and/or phone number and sometimes even the three digit security code on the back of the card.

New technology is rolling out almost by the day to help prevent identity theft and the newest ‘gadget’ is something called Netswipe which made its debut in August of 2011. There is also a plug in for Word Press that does much the same thing. The principal behind both innovations is that the person ordering online is able to ‘swipe’ their card with a web cam and the merchant is then able to verify that the person ordering a product or service is actually holding the card and entitled to use it. Remember, the bulk of credit card fraud is the result of unsavory characters getting hold of your credit card info but not actually having the card itself.

For the consumer, this is good news because it is another mode of identity protection that can help them keep their credit score in good standing. For merchants, it could be a good thing as well because the cost of such innovations as Netswipe is significantly lower than traditional card swipe systems merchants currently employ. The developer of Netswipe, Daniel Mattes, is going to charge 2.75% for processing fees which in reality is perhaps less than half what most merchants are currently paying.

The bottom line for consumers is the fact that greater care is being taken to protect their identities. There has been so much identity theft over the past couple of decades that many consumers have unsatisfactory credit scores as a result. It will still be necessary to monitor your credit report from each of the three credit scoring companies (TransUnion, Equifax and Experian) because there still isn’t a foolproof way of protecting your identity 100% of the time.

Some consumers choose to order one report every 4 months so that they can have an idea of what is going on with their report throughout the year, but this may present some inherent problems. One thing which many people aren’t aware of is the fact that companies and lenders do not all report to the same agencies. For example, your mortgage holder may report to Experian whereas your credit card company may report to TransUnion and so on.

In order to monitor your credit report throughout the year, it may be better to contract with a credit monitoring company that charges a monthly fee. These companies notify you by email, text message and sometimes even by phone whenever a change is made to any of the reports they are monitoring. If you didn’t make a recent purchase then you can immediately dispute charges before the damage is done. Until such time as a foolproof identity protection system is in place, take the time to monitor your credit report.


Some Medical Debts Could Soon Be Expunged from Credit Reports

There seems to be widespread misunderstanding as to the impact that medical bills have on a consumer’s credit report but as it stands now, even those bills which were eventually paid in full do remain on the credit history for a full 7 years. This may or may not have an impact on a person’s creditworthiness since some lenders view these bills with greater or lesser weight. Even so, they are there and they do lower your credit score.

According to CNN Money, legislation which was recently proposed could erase old doctor bills from your credit report. The House Committee on Financial Services will eventually review the Medical Responsibility Act of 2011 which was proposed earlier in the year. In fact, the bipartisan Act may even come before the house as early as this fall, which is only weeks away.

One of the key benefits provided for in the Act would be the fact that medical bills would no longer be a factor in a consumer’s overall credit score. In fact, CNN’s report states that removing just one medical bill from a person’s credit report could improve his or her credit score by an amazing 50 points. This just might be enough of a boost to place that consumer in a better position to qualify for credit.

Part of the problem Americans now face is in direct relationship to the job market. Within just the past 2 years more than 57% of workers who became unemployed also lost medical insurance benefits. Now, without a job and medical insurance, they are forced to seek out emergency care or other medical services that don’t require an upfront payment. Unfortunately, without a job these consumers are also unable to pay those bills as they come in.

According to a recent study conducted by the Commonwealth Fund, 30 million adults in 2010 were contacted by credit collection agencies because they had unpaid medical bills. The study did however find that 44 million adults in America said they were actively trying to pay down those debts. In any case, once the debt is reported it will have a direct negative impact on your credit score as it now stands.

Unfortunately, there are opponents who feel that it is unwise to remove medical debt because this will portray creditworthiness when in fact that consumer is greatly in debt. While the amount of medical debt in question needs to be under $2,000, it is still an indication of that consumer’s ability and willingness to pay debts timely. This is a huge concern to the American Bankers Association.

The controversy is in the fact that some people really did fall on hard times while others had the ability to pay their medical bills and simply refrained from doing so. If enacted, this law would benefit both groups, which would be a travesty of justice, according to an ABA spokesperson. Further, all three of the major credit reporting agencies said that expunging medical debt would take away a lender’s predictive ability which is largely based on a consumer’s credit history.

It has been noted that most patients don’t leave their medical provider with the intention of not paying their bills but are sometimes either unable to do so or are unsure what is covered by their medical insurance. Some of the blame is being placed on insurance companies as their coverages and co-pays are difficult for the average consumer to understand, but in the end, the bottom line is that the responsibility still lies with the consumer.

In any case, it will be interesting to watch how this unfolds as the House debates the Act when it is brought before them this fall. Those who have unpaid medical bills on their credit reports would be well advised to follow this Act as it makes its way through the legislature.

Government Debt Could Affect Students in a Big Way

Even the United States government isn’t immune to debt and this is a problem which is all over the news of late. Not only can the government not meet their current debt, but it also looks as if there is a possibility they will go into even greater debt all in the name of stabilizing the economy. Perhaps someone in Washington should have been looking at the government’s annual credit report!

U.S. Economy Cause for Concern in Foreign Markets

Not only are Americans worried about the state of the economy, but foreign nations are also a bit concerned. Those who are especially vigilant in watching what is going on here would be countries such as China to whom we are in debt. The growing concern is that the United States will default on its debt which has a rebound effect throughout the entire world. But what does this say to those of us who are concerned about going to college and the availability of government grants and guaranteed student loans?

Some Grants Already Cut

Although students who will soon be going back for the fall session have already been told what the amount of their Pell Grant will be, there is still concern as to whether or not that money will be available. Summer Pell Grants were already cut which led many students to fall behind in their certification programs while others will need to finish up a degree program after the fall session. More and more students are inundating the financial aid offices of their colleges and universities looking for information on whether or not they will be getting their money which is necessary to continue on in their education.

Uncertainty Grows in the Department of Education

According to  CNN Money, the Department of Education is trying to work as closely as possible with the Treasury Department in order to get particulars on how the present state of the economy will affect students who rely on government aid to pay for their education. It is this growing uncertainty which should be teaching us all a lesson.

The Importance of Good Credit Standing

Consider the worst case scenario. What would happen to your college age children if the government did default on their debt and were unable to offer adequate funding to those students who rely on it to pay for tuition, books and even the cost of living? As parents we may not have adequate credit standing to take out a personal loan or even a secured home loan which is based on our credit score and credit history. As is evidenced by the current crisis in the United States government, defaulting on debts would almost certainly affect future credit.

Taking Steps Now to Avoid Future Problems

Even though there is some amount of optimism in the short term, these problems may not soon go away. Parents are advised to keep an eye on their own credit scores by requesting a free annual credit report from the three reporting agencies. Take care of debt problems now in the event that government funds will not be available in the future to help put your children through college.

By requesting your free credit report from the three reporting agencies, Experian, TransUnion and Equifax, it is possible to begin repairing bad credit before it gets any worse. Whether you have fallen behind on bills, have been the victim of identity theft or simply have erroneous marks on your report which can easily be remedied, you can’t begin to fix what you don’t know is broken! Your child’s academic future may very well depend on your credit score if the government is unable to continue offering current grants and student loans.


Getting What You Want Out of Life – Are Reporting Inaccuracies Holding You Back?

According to reports released by some of the leading financial analysts in the country, there are an amazing amount of inaccuracies on your credit report that can hold you back from getting what you want out of life. It is not good enough to put your credit report on the back burner until you are contemplating a major purchase or investment of some type because by then the damage could already be done!

Who Has Been Sitting in My Chair?

Your credit report is so much more important than you know because it can have a direct impact on virtually every area of your life, from getting that dream job to renting a condo on South Beach. By the time you clear up errors or fraudulent entries it could be too late. The guy next door is going to work every morning sitting at the desk which should have been yours and you are still stuck ten miles inland on the outskirts of the Everglades while some stranger is sitting on your balcony sipping frozen daiquiris. Perhaps it sounds like a modern day rendition of Goldilocks and the Three Bears, but someone could be sitting in your chair because you were busy looking the other way.

Where Should I Be Looking?

We know that identity theft is a huge issue since we are living in the digital age. You should be getting a copy of your credit report annually to make sure that it contains no inaccuracies which need to be corrected. If you find any blemishes due to charges you didn’t make, it could be a mistake but it could also be identity theft! Unless you know what is there you have no way to counteract human error or downright fraud. Some experts even advise that you check your credit report more often than once a year. According to a recent article found on the MSN Money website, you can space your three annual credit reports from the major reporting agencies, Experian, TransUnion and Equifax, evenly throughout the year. Also, you may wish to join a credit monitoring service that will alert you any time there is activity on your report.

Pay Attention to Details!

Also mentioned in the MSN Money report was the fact that we fail to pay attention to important details. While we are busy looking at what is listed on our credit report we forget to make sure that all of our personal information is accurate. Make sure your contact information is correct as well as any other personal identifying information such your Social Security number or date of birth. You would be amazed at how often these are incorrect on credit reports! This is especially important if you have been working diligently to restore your credit. If your personal identifying information is incorrect then it stands to reason that any progress you make may not be on your free annual credit report! Those clerks in the reporting agencies are not detectives so they more than likely will not hunt down the right person to add positive marks to their credit history.

The key to good credit (in addition to paying your bills on time!) is to keep a watchful eye on what your credit report is saying about you. Reporting inaccuracies are much more common than most of us are led to believe and often the ultimate cause of being denied the things we want most in life. Someone could indeed be sitting in your chair at the moment because you were too busy looking the other way.