Your Take 
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Your Take: How Often Do You Check Your Credit Score?

Red LED ScoreboardI’m a numbers guy. I love seeing numbers, trying to find trends, and playing with statistics. That’s probably one of the reasons why credit scores fascinate me so much, they are able to distill a bunch of actions you take as a person and package it up into this convenient three digit number that lenders go nuts over. I’m not saying the system is good or bad, but it’s the system and you have to play by the rules of the game.

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 Credit 
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Properly Destroy A Credit Card

Credit cards with bullet holesDo you know why credit cards have an expiration date? In the beginning, it was because a credit card had a limited useful lifespan. After a few years, the magnetic stripe on the back would either get demagnetized or damaged so much that it was unreadable.

It wasn’t until later that the expiration date was used as a security feature. For many years, you could continue to use expired credit cards because the stripe was fine and the expiration date wasn’t used for verification.

So what were you to do with an expired card? You’d have to destroy it of course. In our age of identity theft and fraud, only a fool would throw a credit card into the trash without cutting it up first. However, with the economy the way it is and the value of credit card numbers going up, it’s important to properly destroy a credit card.

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 Credit 
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MyFICO ScoreWatch No-Hassle Trial Cancellation

MyFICOI can’t remember the last time a company with a trial service reminded you that your trial period was expiring, but that’s exactly what MyFICO did.

What’s even better is that you can cancel the service online just by clicking on this link: https://www.myfico.com/scorewatch/cancelsw.aspx. You might be prompted to login but you can cancel the service entirely online. Once you click the cancel button on that page, your trial is canceled. You don’t have to talk to a customer service representative, you don’t have to wait on hold, you don’t have to deal with any shenanigans. They try to sell you their other products and they will do their best to try to change your mind, but you’re one click away from ending the trial.

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 Credit 
11
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Synthetic Identity Theft

Shredded DocumentsA few years ago, I discovered an error on my credit report where an extra social security number (off by one digit), a new home address, and a phone bill had been added to my report. I was able to get the information removed after jumping on a few hoops but it really opened my eyes about the weaknesses in the credit reporting system. To use a bit of database-speak, I always figured social security number was the primary key for each report – meaning it was unique to each report. If someone requested a report using an incorrect social security number, why would the bureau grant it? It’s because that makes the lending process easier and because the bureau doesn’t have to answer for its mistake. Enter, synthetic identity theft.

Synthetic Identity Theft

Synthetic identity theft is a special type of identity theft. There are two versions of synthetic identity theft. The first is where the thief rebuilds your identity using bits of information from different sources. They rummage through your trash and find a canceled check, they call your place of work and find out your telephone number, they snatch your mail and grab a 1099-INT the bank mailed you. They don’t get everything all at once, but piece by piece they put it all together. This type of piece-meal ID theft, while scary, isn’t as scary as the second type.

The second type of synthetic identity theft is where the thief steals only part of your identity and merges it with other information for use in places where the checks aren’t as stringent. They may use a name that’s similar to yours in connection with part of a social security number plus your address. To be honest I’m not entirely clear how they go about doing this because I’m not a synthetic identity thief! However, the thought of someone being able to do this, even after you’ve diligently shredded up documents, is still scary.

Preventing Synthetic Identity Theft

How can you prevent this? By being smart about your identity in a way that protects you against the regular identity thieves. First, put up a solid defense by implementing my do-it-yourself identity theft protection ideas. Then, follow the tips the SEC provides to prevent identity theft and review the FTC’s site on identity theft.

Beyond that, there are a few other places you can check like your social security report. Each year, about three months before your birthday, the Social Security Administration sends you a little booklet indicating your benefits. One of the pages will list your income each year, check that the number is accurate. Extra income could be a sign that someone has stolen your identity to get a job. If you don’t correct it, you could be liable!

Lastly, fix every last mistake you see in your report, even if it improves your score! I once had a credit card that had an average revolving balance of $5,000, way more than I typically spend in a month, and had it removed. You want your credit report to accurately reflect you as a borrower. Even the smallest errors, like an incorrect address, should be addressed because it could explode into something much bigger.

I wouldn’t go as far as signing up for an identity theft program, unless you want to use their services, because they don’t necessarily add anything you can’t do yourself. I reviewed Lifelock and found the service to be good, if you didn’t want to do things yourself. Remember, those packages are service packages and insurance packages, they don’t offer anything you can’t do yourself (ahh, the classic trade of time vs. money).

(Photo: nnova)


 Credit 
12
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LifeLock Review

Identity Theft On The RiseLifeLock is the company that has a picture of their CEO, Todd Davis, telling you his social security number is 457-55-5462 as a testament to the power of LifeLock’s services. It’s a marketing gimmick, no doubt, but it’s a pretty clever one, you have to admit.

However, the bottom line identity theft services like LifeLock is that you’re buying piece of mind and a maintenance service. You can do a majority of the services they provide, I outline them in Do-It-Yourself Identity Theft Protection, and they even freely admit this. With the exception of a $1 million service guarantee, everything else is free to the public.

You May Not Need It

If you are diligent, keep good records, and remember to do everything, I think you should do it yourself and not buy a service like LifeLock. If you aren’t and if you think you might be at risk for identity theft, it might be better to pay the $9 a month just so they do everything on-time and without lapses. They will remember to put fraud alerts on your credit history at the three bureaus every 90 days, they will remember to periodically refresh your data on OptOutPrescreen.com so you stop getting junk mail, and they will request your credit history every 12 months from the three bureaus. It’s not a lot of work, but if you’re prone to lapses and forgetting to do things, $9 may be a fair amount to pay for someone to look over your shoulder. That’s why I think it’s more like a service contract (like when the heating company sends a technician out to check your HVAC every six months).

Since launching they’ve added several additional services including WalletLock (explained below), scanning black market forums for the sale of your identity, and other identity theft related activity.

Is Your Data Safe with LifeLock?

The first thing you have to consider is whether the company itself is safe, which is not an unreasonable reaction because of some of the negative stories out there about former founders and such. Here’s what they say: “LifeLock is ISO 27001 certified for data and operational security and follows industry best practices to secure and protect personal information. We conduct background checks on all of our employees, including regular random drug testing. All of our facilities are built with the latest biometric security access as well as state-of-the-art surveillance and alarm systems. No data is stored onsite. No computers anywhere outside of secure data centers have our member’s critical information on them.”

About The One Million Dollar Service Guarantee

One million dollars sounds like a lot but the figure is really just to put your mind at ease. The guarantee is that if your identity is stolen while you are a customer, Lifelock will pay for people to recover it, restore your losses, and recover any expenses. This is the insurance part of the Lifelock deal, it’s really piece of mind against the threat of identity theft. Is it worth it? It’s for you to decide how much you think the service of protecting you is worth and how much the insurance is worth, then work from there. Here is a link directly explaining their one million dollar service guarantee.

WalletLock

WalletLock is a service offered by LifeLock, included in the standard service package, that lets you call an 800-number if you ever find your wallet missing or stolen. LifeLock will then work with you to cancel credit cards, report stolen drivers’ licenses and social security cards, replace passports, visas, immigration documents, checkbooks, insurance cards, etc (you’ll have to identify them all via a form beforehand). The way to do this yourself is to photocopy all your credit cards, front and back, as well as all your other important documents so you have a copy if you lose the original. It also makes sense to indicate on your photocopies the cards you have in your purse and wallet so you know which ones to cancel. You could do this all yourself, or you could have it done for you included in the price.

American Express offers a similar service called the Credit Card Registry for $29/year. “American Express Credit Card Registry ensures a Cardmember’s cards will be protected. The service will cancel and request replacements of any lost or stolen cards (including ATM cards) – all with a single call. It also provides fraud liability coverage, passport replacement, and driver’s license replacement in several states… For more information, Cardmembers can call 1-800-227-2639.”

Bottom Line

The bottom line is that if you want identity theft protection, a service like LifeLock will give you that and more. Credit bureaus, and other companies, offer credit monitoring services that just look for abnormal activity. I think those services are a complete waste of money because they won’t protect you if something bad happens (and they often more expensive).

If you are diligent, do it yourself because you don’t need to pay someone $9 for something you’re able to stay on top of. If you aren’t diligent, these services aren’t a bad idea, just know that you’re essentially buying a service contract with someone keeping tabs on your identity and nothing something super special and fancy you wouldn’t otherwise be able to do. If you do sign up, be sure to get the 10% coupon floating around and you won’t pay full price (or click on the banner below).

I have not personally used LifeLock but they’re the company I always see in the news. Have you used them, or TrustedID or IdentityTruth, and want to share your experience; or do you see it as a waste of money?

(Photo: thetruthabout)


 Personal Finance 
3
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Be Wary of Unsolicited Phone Calls

Telephone PhishingRecently I’ve been getting a lot of strange unsolicited phone calls from 800 numbers claiming to be my cell phone company or my bank or my credit card. In many cases, the calls are legitimate. If it’s a credit card company, they’re confirming some card activity and offering all the sensitive information. However, I’ve also been getting some suspicious ones at all. This last week, I had a phone call from someone who worked for a timeshare. I wasn’t interested in flying down for a three day, two night getaway in Florida and when I asked where they got my name, I got the “oh reception is breaking up *click*” That really put me on edge.

Then, a few days later, I received another phone call from someone telling me I was eligible for a promotion related to my “credit card that ended in…” and then rattled off four numbers (that matched a credit card I actively used). Again, when I asked them for their company name or how they found me, I god the “reception is breaking up *click*” treatment.

Lesson of the Day

If a company calls you out of the blue, be on your toes. Phishing isn’t limited to email, people lose sensitive information all the time because of phone calls like the ones I’ve been receiving. If a company calls you and you’re on the National Do Not Call Registry, get their information and file a complaint.

Whatever you do, don’t give up any information. If it’s really important, you can call them back at a published corporate phone number. Have them annotate your record.

Search

Lastly, if you’re curious, do a search of the number. When I searched for 877-671-1851, I discovered, through 800Notes, that it was Sprint trying to sell me a promotion (which matched what the CSR was trying to do). While you can’t trust everything you see online (anyone can put up a website that says their phone number is legimate), it can give you a good idea.

(Photo by _М и р К о__)


 Personal Finance 
6
comments

Don’t Carry Your Social Security Card

Every month, go through you wallet or purse and ensure that everything in it has a reason for being there.

The other day, while standing in line at the DMV to take a photo for my driver’s license renewal, I saw a man pull his Social Security Card out of his wallet. As we all know, the Social Security card is no more than a regular piece of paper that, given years in a wallet, is bound to disintegrate. This guy’s Social Security card was in such sorry shape that it looked like it was torn from the Constitution. Years of sitting in his back pocket, for no good reason, had his card about a year away from being dust and there was little reason for him to carry it every day (in fact, new Social Security cards instruct you not to carry it on you).

Besides deterioration, another good reason not to carry the card, or anything you don’t use on a daily basis, is that you could lose your wallet or purse. If that unfortunate event happens, you have the burden of replacing or canceling cards that had no reason being in your wallet or purse in the first place. Added headache without any reason whatsoever.

So once a month, clean out your wallet or purse so Constanza doesn’t mistake it for his.


 Credit 
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Do-It-Yourself Identity Theft Protection

Identity TheftLast Friday I discussed the CEO of LifeLock’s appearance on the Today Show and how many of the services they offer are things you can do yourself. So, rather than leave it all vague, here’s what you can do for a do it yourself solution.

AnnualCreditReport.com

Through AnnualCreditReport.com, you can request a copy of your credit report from each bureau once a year. I generally like to stagger it every 4 months so you can keep up to date absolutely free. For example, get your Experian in January, then your TransUnion in May, then your Equifax in September, then Experian again the following January.

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