Will Authorized User Status Help You Build Credit?

While it’s certainly not a substitute for building up your own credit history, being an authorized user can be a good way to give your credit a boost if you have little or no credit history.
 
Here’s what you need to know about an authorized user:
 
What exactly is an authorized user?
 
Being an authorized user means you can use someone else’s credit card in your name. You can make purchases and use the card as if it were your own, but you’re not the primary account holder.
 
As an authorized user, you’re not legally responsible to pay the credit card bill or any of the debts, as this is the responsibility of the primary account holder.
 
What effect does this have on your credit?
 
If the credit card provider reports authorized users to the three major credit bureaus (TransUnion, Experian, Equifax) then the primary account holder’s strong payment history (on-time payments) can have a positive effect on your credit. In addition, if the account holder has a low utilization rate on this card, that too could be a positive for you.
 
On the other hand, if the primary account holder misses’ payments and has a high utilization rate, then this can be a negative for you. Before you make this decision, be sure there is a potential upside as putting yourself on the wrong person’s account could have a detrimental impact on your scores.
 
Being an authorized user might not increase your chances of getting approved for credit cards and loans in the future, as lenders checking your credit history will want to see that you’ve managed your own credit accounts responsibly. However, in the right situation you can start building a credit history all while having the convenience of a credit card in your wallet.
 
If you have any questions or would like to schedule a free consultation, click here.
 

-Erik Kaplan

What is the difference between a credit freeze and a fraud alert?

Should you apply a credit freeze to your accounts, a fraud alert, or both? To make the right choice for you, you must understand how each one operates and how it effects your accounts.
 
A fraud alert requires that any lenders or creditors take reasonable steps to verify your identity before issuing new credit in your name. You certainly don’t have to be a victim of fraud to initiate a fraud alert. Rather, you can use this as a protective measure. A fraud alert lasts for 90 days; however, you can extend this. If you are a victim of identify theft and have filed the appropriate report, you can extend the fraud report for up to seven years.
 
To place a free fraud alert, contact one of the three major credit bureaus (Equifax, Experian, or TransUnion) either online or by phone. The bureau that you contact is required to share the information with the other two bureaus. You can still open new accounts during a fraud alert as long as you provide suitable proof of your identity.
 
Compared to a fraud alert, a credit freeze offers more extensive protection. With a credit freeze, potential new creditors cannot access your credit report at all; therefore, they will not issue credit in your name. In most states a credit freeze is indefinite, but some states allow the freeze to expire after 7 years.
 
You cannot open any new accounts during the credit freeze nor can anyone access your credit report (including you). You must lift the freeze prior to applying for new credit. It is possible to re-establish the credit freeze, or to specify a period during which it should temporarily be lifted. Neither a credit freeze nor a fraud alert affects your current accounts; they only concern the opening of new lines of credit.
 
Use these tools in whatever way best fits your situation and comfort level, but make sure you understand how to use these tools, before you do, to avoid any credit surprises.
 
If you have any questions or would like to schedule a free consultation, click here.

Spring Cleaning for Your Finances: Cleaning Up Your Credit Report

Welcome Spring by giving your credit report a good deep clean. 
 
Odds are good that you are paying more in interest on loans than you could be.  Why not take a few hours this spring and work on cleaning up your credit report. 
 
Here is what you can do today:
 
Order your three credit reports and scores
Each of the three major credit bureaus – Experian, Equifax and TransUnion – maintain separate credit reports and scores. Checking your credit on a consumer website like Credit Karma or Experian does not affect your credit as a hard inquiry, therefore you should be reviewing your report at least 4 times a year.
 
Review reports for mistakes
Errors in your credit reports can cause your scores to be lower than they should be – and fixing them can be a quick route to a better score, which can save you money on loans or insurance. This is why it is important to review all three reports to fix any inaccurate or incomplete information.
 
Improve a bad credit score
Why live with bad credit when our team of Certified Credit Consultants can help you rebuild your credit and provide you the knowledge to ensure that you maintain it for the rest of your life.
 
Call (800) 822-7120 or schedule a free consultation today. Your credit report can be cleaned up in as little as 45 days.
 

-Erik Kaplan

Mortgage Lenders and LexisNexis

LexisNexis Risk Solutions has found that approximately 11 percent of U.S. consumers have a tax lien or civil judgment on file. With the new restrictions on credit bureaus’ reporting of lien and judgment data, mortgage lenders are prepared to adjust in order to better evaluate applicants creditworthiness.

In fact, many are turning to the LexisNexis RiskView Liens & Judgments Report to provide data and to remove the blind spot for mortgage lenders when evaluating applications.  With this information, mortgage lenders can determine the count of liens and judgments on file, the type, the dollar amount of tax liens, and more, including specific details for each lien and judgment included in the report.

If you or your client have received a file from LexisNexis Risk Solutions, Inc. (“LNRS”) and find it contains incorrect or incomplete information, THD Credit Consulting can help.  In fact, we have been able to fix these reports about 90% of the time!  Email or call our office to get started today.

-Erik Kaplan

Debt Collection Scams: What You Need To Know

Coping with debt collectors is difficult… dealing with fake debt collectors is even worse and all too common.
While businesses often do hire third-party debt collectors to pursue past due accounts, there are scammers who pose as collection agents to trick you into paying money for debts that have been paid or canceled or that don’t even exist.
Here are some clues to recognize a debt collection scam:
  • The collection isn’t on your credit report 
  • The debt collector asks you to pay via wire transfer or another untraceable method
  • You don’t recognize the creditor or the account 
  • You can’t find anything on the internet when you search by their phone number 
  • They threaten you with jail time or pose as a government official
  • They won’t give you their company’s contact information
To help you separate the scammers from legitimate collectors, always start with these questions:

What is the name and address of the debtor you’re trying to reach? If you are provided the wrong information or incomplete information, do not correct them. Instead, tell them to send you the validation notice (a letter that is required to be sent within 5 days of first contacting you) to the address they have on file, explaining that you will respond accordingly once the letter is received. Then hang up.

What is the name, address, and phone number of the company you’re calling from? Even if a caller gives you an answer, never discuss debts over the phone. Ask them to send you the validation notice and again, let them know you will respond once the letter is received.

What are the last four digits of the debtor’s Social Security number? This is somewhat of a trick question, as a legitimate debt collector will never answer this question. If they do, they are violating the Fair Debt Collection Practices Act (FDCPA. Even if they have your SSN, never confirm or deny the information.

Remember, don’t be intimidated even if collectors attempt to scare you into paying, threaten to have you arrested, or pose as a government official. These are all violations of the FDCPA and a clear indication the collector is not legitimate.
If you believe a fake collector is calling, hang up. You don’t need to speak with them regardless of what they say or how often they call. If the debt is legitimate, it does not mean the person calling is entitled to collect the debt. Again, wait for the letter.
If you have questions, need help with debt settlement and want to stop the harassing phone calls, give THD Credit Consulting a call today.
-Erik