Linda K. Vincent

Think Credit Monitoring Prevents Identity Theft, In the wake of the recent Target data breach, in which identity thieves gained access to the personal information of at least 70 million customers, the company announced it would offer free credit monitoring for a year. While this is a good first step for the retail giant, it gives affected customers false hope. At face value, credit monitoring seems like an attractive service. After all, it helps detect suspicious activity on your credit report and gives you a heads-up about potential problems. But many credit monitoring companies market their service as being an identity theft protection plan. This simply isn't the case.

Maxx and Marshall's chains said in a regulatory filing. When even major retailers cannot be trusted to keep your data safe, it is clear that the responsibility falls upon the consumer. ID Theft Protection plans are becoming increasingly popular. 9.95 if combined with a Prepaid Legal Plan. The plan offers continuous credit monitoring and instant alerts if a suspicious transaction occurs. If someone attempts to take out a credit card or loan in your name, you are instantly contacted for verification.

1200. With this plan, you give a limited power of attorney to the company and they do the work for you, at no additional expense. More and more, ID Theft protection is looking like a sensible precaution. Just like having a fire extinguisher in the kitchen, you hope you will never need it, but if you do, youll be incredibly glad it was there.

If you don’t learn how to understand your credit, it will be a lifelong problem. You most likeley know that you should be checking your credit report at least once a year. Do you understand what’s included in your credit report and how to read it, Do you know what your credit score means,

When I work with consumers or lead workshops on financial literacy and credit, I’m always amazed at the misconceptions about credit histories, credit scores, and credit-reporting agencies. 1: The credit-reporting agency is responsible for my debt (or credit) rejection. The credit report is an important part of the decision to grant you credit or not, but it’s not the only one. Each lender or creditor has a set of criteria it uses to determine whether or not you qualify for that credit. Think about it: It’s much easier to get a gas card than a credit card or a mortgage.

That’s because the requirements to qualify for a gas card are not as stringent as those for a mortgage. It’s up to you to establish an on-time payment history and a good mix of credit. Then when the creditor pulls your credit report, the creditor can look at your history, along with the other information you have provided, to make a decision about whether or not to give you credit. A lot of the details you may provide, such as your gender, income, and employment history, aren’t on your credit report.

But you can take responsibility for your financial identity and make sure the information reported about your credit history will present a positive picture of you to creditors. 2: The credit-reporting agency put the negative information on my credit file. A lot of people don’t understand how credit reporting works. Credit reporting agencies put information in your file when creditors send us details about your payment history. Credit reporting agencies are not out to get you, and no one pays us to report negative information so they can avoid granting you credit.

We compile the data sent to us about your financial history and present it as a snapshot of your finances. There may be inaccurate information on your credit report (and you should frequently check your file at all three nationwide credit reporting agencies for inaccuracies), and if you find any inaccuracies contact the credit reporting agencies to dispute them.

3: My credit score is a part of my credit report. Your credit score is not included with your credit report. You can access your credit report and credit score from Equifax or one of the other nationwide credit reporting agencies. Your credit report is a history of how you pay your bills.

It includes your credit accounts—mortgages, student loans, credit cards, and auto loans—and shows if you’ve been late or on time with your payments, the balances on these accounts, and who else has been looking at your credit report. Your credit score is calculated from a formula based on the components of your credit report.

While the score is a good reflection of you and your financial capabilities, there’s still room for interpretation. A lender or creditor will look at your score as another element in determining the risk in lending to you or giving you credit. So you can get your credit score from a credit-reporting agency, but it is not automatically included with your credit report unless you purchase a credit report and score product or subscribe to a credit monitoring service that includes it.

4: Credit-reporting agencies make the rules on how your credit history is reported and how long information stays on your credit report. The credit reporting agencies compile and report information about your credit history, but we’re not the decision makers. A government agency, the Federal Trade Commission (FTC), governs the credit reporting agencies.