How to Protect a Child's Social Security Number

Protecting a child's Social Security number lowers the risk of identity theft, in which a stranger assumes the child's name and obtains credit usinsg the name. Children who are victims of identity theft may not be aware of the situation until they are adults and attempt to secure their own credit. Parents can take several preventative steps to secure a child's Social Security number and to protect a child against identity theft.

Instructions

1

Keep your child's Social Security card, and other important documents, in a safe. Do not travel with these documents.

2

Do not give out your child's Social Security number needlessly. The Social Security Administration suggests asking questions before giving out a Social Security number to determine the validity of the party asking for the number. Ask why the number is needed, how it will be used and what law requires you to give the party the number.

3

Contact the three credit reporting agencies (Experian, TransUnion and Equifax) to request a free Minor Child Credit Check. Be prepared to prove your relationship to the child by providing your identifying documents and a birth certificate.

4

Determine if your child has credit. The Minor Child Credit Check will indicate if the child already has credit, or if the child does not have credit. If the child already has credit, you will need to take steps to clear the child's credit.

5

Contact the Federal Trade Commission, Internal Revenue Service and Internet Crime Complaint Center to report your child's identity theft and take steps to resolve your child's credit.

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How to Rebuild Bad Credit Easily

Individuals with bad credit understand the disadvantages of having a low credit score. Loan application denials, higher interest rates and in some cases, higher insurance premiums all result from bad credit. But there are methods to help you rebuild your credit easily. Whether you acquire a low credit score from bad credit habits or a serious situation like a bankruptcy, you can fix your credit history and maintain a high score.

Instructions

1

Aim to pay your creditors early to boost a low score. Each late payment shaves points off your FICO score, and habitual late payments gradually results in a low credit rating. Reverse bad credit easily by making sure payments arrive on time. Consider automated withdrawals from your bank account or pay online.

2

Use your credit cards at least once a month. Inactive credit accounts do not help your credit score. If trying to rebuild your credit, pull out your credit cards and make a small purchase. This keeps your account active, and creditors are likely to update your credit report.

3

Get rid of debt. Pay off new charges in full every month to maintain a manageable debt loan. Having available credit on your credit cards can help improve your bad credit rating.

4

Erase collection accounts from your credit file. Open the doors of communication with past creditors of delinquent accounts and work to settle these accounts. Send weekly or monthly payments until you pay off the account. Request removal of the collection account from your report upon repayment.

5

Fix credit report mistakes. Add points to your credit file and reverse bad credit by disputing errors that appear on your report. Ignoring errors can lower your rating, and make it difficult for you to get financing. Get reports from Annual Credit Report.

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Can Collection Agencies Keep Updating Your Report?

Experian, TransUnion and Equifax are the three primary consumer credit reporting agencies whose business model relies on compiling consumer credit information. These three agencies report account listings from original creditors, debt buyers and collection agencies. Your credit report may consist of multiple negative entries tied to one original credit account.

FDCPA & FCRA Regulations

The FDCPA --- Fair Debt Collection Practices Act --- regulates debt collection agency and debt buyer collection activities. The FCRA --- Fair Credit Reporting Act --- defines consumer's rights in relation to the type and longevity of the information listed in the credit report. The FTC --- Federal Trade Commission --- enforces the FDCPA and FCRA regulations. The FDCPA allows collection agencies to add updated information to your credit report, as long as the information complies with the regulations outlined in the FCRA.

Reporting

Collection agencies are allowed to report credit accounts to all three credit reporting agencies as collection accounts, charge-offs and delinquent accounts. Collection agencies are legally allowed to increase the indebted amount by adding interest, attorney and court fees to the balance. The original creditor is also legally allowed to report the delinquent or charged-off account, which results in a separate entry on your credit report. When the original creditor charges off the account and sells it to a debt buyer or turns it over to a collection agency, the charged-off amount does not increase. The debt buyer or collection agency can update your report with a new amount each month.

Timing

Collection agencies, debt buyers and original creditors may list negative information on your credit report for seven years, according to the FCRA. Your obligation to repay the debt does not expire after seven years, but the negative account listing does expire. The reasoning behind the statute of limitations is to allow a consumer's credit rating to recover from unfortunate financial decisions. A credit report is a snapshot of a consumer's level of financial responsibility at a given point in time.

Consequences

Collection agencies and debt buyers keep updating credit report listings as a method of compelling consumers to pay the debt. These third-party agencies are not allowed to change the date of the original delinquency, but the outstanding balance may differ from the balance listed as a charge-off by the original creditor. Interest and other fees may legally accrue on unpaid balances that account for the difference in the total outstanding amount owed. Even if consumers pay the collection agencies, the negative account listings may appear on the credit report for up to seven years. Consumers should negotiate negative account listing deletions as part of paying off the collection agency.

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About Free Monthly Credit Reports

That catchy jingle that seems to be on all of the cable stations touts a novel service that gives a free credit report. Others claim to provide free monthly credit reports. This does not seem possible, especially since the credit bureaus (where the credit report comes from) only give a free report once a year or when you are turned down for credit. The credit bureaus otherwise charge for credit reports and reporting services. It makes you wonder how the companies with the catchy jingles get away with it. Well, they don't.

No Free Lunch

That's how the old saying goes. It means that there is always a price to be paid. For a free monthly credit report, that price usually comes in the form of a free "trial." Firms provide credit-reporting services, identity theft protection and credit monitoring services, all for a fee. But they advertise a "free credit report" monthly for some, as a way to lure customers into buying the services. The free part is actually the trial, which usually ends in 7 to 14 days, and is often very difficult to cancel.

The Bonus Tactic

A free monthly credit report is also used as a "bonus" for customers who purchase certain credit services, like monitoring and theft protection. The customer is paying for all of the services, but the company calls the credit report a bonus, and can therefore advertise it as free.

Additional Debt Lure

Credit card companies and banks also offer free monthly credit reports---if you open a new credit-card account. Thus, you must assume debt to check your credit for free. Again, the credit report is technically not free, because of the monthly interest and fees spent on the credit-card debt. Unless you are a very frugal and practical spender, the debt on the new card will end up damaging your credit. However, you will get to watch your credit score decrease every month.

A True Free Credit Report

There are ways to get a free credit report. The easiest is the one-time report offered by the U.S. government. The federal government offers Americans a free yearly credit report from all three credit-reporting agencies: Experian, Equifax and TransUnion. There are no hidden fees or charges. See the Resources section for more information.

Other Truly Free Credit Report Sources

Another way to get a free credit report is to request one after you have been turned down for any type of credit, be it auto financing, a credit card, a mortgage or a gym membership. Any time your credit is checked and you are denied, you are entitled to a free report. In addition, any negative action that results from the contents of your credit score will make you eligible for a free report. To get one, simply contact the reporting agency listed on the denial letter. This is a one-time credit report, however.

If you are out of a job or looking for one in the next 2 months, you can apply for a free credit report. Victims of identity theft and recipients of public assistance can also receive a free credit report. You can receive only one credit report due to these hardships---not a free monthly credit report.

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What Does Credit Rating Mean?

Your credit rating plays a huge role in determining your financial well-being. Your credit rating is also referred to as your credit score. Your credit rating is determined by your past willingness to pay your debt obligations to creditors.

Significance

Creditors may use your credit rating to decide whether or not to extend credit to you. Creditors and lenders use your credit rating to help determine the likelihood of default on a loan. Your credit rating impacts your ability to get a mortgage, auto or personal loan.

Credit Scores

Your credit rating may range anywhere from 400 to 800. The higher your credit score, the better. Higher credit scores result in you paying lower interest rates on your loans. In other words, high credit scores mean you'll have to pay less to borrow money.

A low credit rating may disqualify you from borrowing altogether. If you're extended a loan with a poor credit rating, you'll usually find yourself paying higher interest rates in exchange for the privelege.

Fico Computation

Your Fico score is calculated using the Fair Isaac Corporation formula in the U.S. The formula is computed based on how well you've paid past obligations, amounts you currently owe, recent credit, length of credit history, and the types of credit accounts you have.

Credit Bureaus

Your credit rating is determined by information contained in your credit report. Most major lenders report your account history to all three major credit bureaus. The three major credit bureaus are Trans Union, Experian, and Equifax.

Considerations

It's a good idea to order your credit report from all three credit bureaus. You should look at your credit report at least every six months. Check your report for inaccurate information, as errors could cause your credit rating to be lower than it should be.

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How Does a Free Annual Credit Report Work?

If you have never checked your credit report, you should do so immediately---it is free and you may find errors that cost you thousands more on loans. Obtaining your free credit report requires a few basic pieces of information and possibly details about your financial profile. Watch out for scams, because only the Annual Credit Report website offers a truly free report.

Identification

The Annual Credit Report is a portal operated by the three major credit rating agencies in the U.S. and the only website to offer a no-strings-attached free credit report. At the website, you enter your name, Social Security number, current address or previous one if you have not lived at the same residence for two years and security questions. The security questions ask information only you would know and comes from your credit profile, such as your monthly debt payments.

Misconception

The free annual credit report from TransUnion, Equifax or Experian does not contain the FICO risk analysis score, only the data the particular credit agency has in your profile. The FICO score is ultimately what you want to know, because lenders judge your creditworthiness based on this number. Also, the major agencies may have different data, so you want to know all of your scores, because lenders often take the middle score.

Warning

Visit AnnualCreditReport.com for a free credit report, instead of the individual agency websites. Federal law only requires the major bureaus to offer a free report through a central website. Going to the individual agencies for a report usually requires the purchase of your FICO score. Third-party websites may also try to insist on a purchase for your "free" report or make you try or purchase other services, such as credit monitoring.

Tip

You can order your free annual credit reports through the phone by calling (877) 322-8228 and a service representative will guide you through the process. You can also complete the Annual Credit Report Request Form and mail it to Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348. This is the slowest method and may take up to three weeks to arrive.

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How to Obtain an Official FICO Score

The Fair Isaac Corporation invested the first credit scoring model in 1958--the FICO score, according to Yahoo Finance. Since then, lenders have been using the FICO score to approve credit applications in the U.S. Until early 2009, U.S. consumers who had active credit reports could get a FICO score for all three of their reports, until Experian cut its ties with Fair Isaac, according to a consumer alert published by the Experian, and began selling their Plus and Vantage scores. Today, U.S. consumers can still receive an official FICO score for their Equifax and TransUnion credit reports.

Instructions

1

Go to the MyFICO website.

2

Click on the "FICO Scores and Credit Reports" tab.

3

Pick the "FICO standard" product on this page. This will give you a credit report and official FICO score for the credit bureaus you choose.

4

Select the orange "Buy Now" button.

5

Put a check mark next to the Equifax, TransUnion or both boxes, depending on which FICO score you want, and click on the orange "Continue" button.

6

Log in to your existing MyFICO account on the next page or create an account by clicking on the orange "Create Account" button and filling in the required information. You have to either log in or register to purchase a product and FICO only allows one account per Social Security number. You will then be taken back to the previous page, where you need to select the orange "Continue" button again.

7

Bypass the special offers by choosing the "No Thanks" options or select one or both of the special purchases. Click on the orange "Continue" button.

8

Review and agree to the User Agreement by putting a check mark next to the "I Agree" option. Input your e-mail address and a promotional code, if you have one. Then click the orange "Continue" button.

9

Pay for your purchase by filling in your credit or debit card information. Click the orange "Make Payment Now" button.

10

Choose the "My Purchases" tab on the top right-hand corner of your screen and you will see the scores that you purchased. These will be your official FICO scores.

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