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Apache is functioning normally

May 2, 2023 by Brett Tams

Apache is functioning normally

May 2, 2023 by Brett Tams

Getting more from your money doesn’t have to be a long-term project. Making some simple and strategic money moves over the next 30 days can help you reduce spending and increase savings, and take some of the stress out of dealing with finances.

The methods below can put you on track to achieving your financial goals.

Steps to Manage Your Personal Finances

As you put these personal finance moves into practice, remember that you’re aiming for progress, not perfection. You may want to do a bunch of them at once, or choose just a few to focus on.

1. Set Financial Goals

If you haven’t done so already, set some important long-term goals, like saving for retirement or your child’s child’s education. This can help you figure out how much money you need to dedicate to these milestones.

Setting short-term goals can be helpful, too. Maybe you’re saving for a special vacation next year. Or perhaps you’re planning to buy a new car in five years. Mapping out your game plan could help get you there.

2. Create a Budget

Start by adding up your necessary expenses, such as housing costs, utilities, insurance, car payments, and groceries, and subtract that amount from your monthly take-home income. Put what’s left toward paying down debt, and then make deposits into a high-yield bank account where your money can grow.

3. Set Up Direct Deposit

Are you still trekking to the bank to deposit your paycheck? Sign up for direct deposit so your money can go directly to your bank account.

While you’re at it, set up an automatic transfer so that a portion of your paycheck goes into savings every month.

4. Increase Retirement Contributions

If you’re eligible to participate in your company’s 401(k) plan, make sure your contributions are enough to take advantage of your employer’s matching funds, if they offer a matching contribution.

Each matching contribution varies by company. Many companies match 50 cents for every dollar you contribute, up to 6%.

5. Make $10 or $25 in Spending Cuts

Look for small expenses you can cut, and then direct the extra cash to savings or paying down debt, such as credit card debt. For instance, bring lunch to work a couple of days a week instead of eating out.

6. Look for Helpful Apps

A good app can help you monitor your spending and savings, keep you on budget, and set financial goals. Check out SoFi Insights® where you can track all of your money in one place.

7. Negotiate Your Bills

Call your Internet and cell phone providers to ask about lowering your monthly bills. There may be discounts or cheaper plans you can take advantage of.

When you call, be firm but courteous. Check out competitors’ rates, and if they’re lower, use those prices as a bargaining chip in your conversation.

8. Review Insurance Policies

Do you have enough car and home insurance to cover your needs? Do you have too much? Review your policies and add or subtract coverage as necessary. And shop around for providers that offer good coverage for less money.

Ready for a Better Banking Experience?

Open a SoFi Checking and Savings Account and start earning 1% APY on your cash!

9. Check Your Credit Score

Your credit score is a number that represents your creditworthiness. Lenders use it to determine whether to let you borrow money and at what interest rate. Check your credit score. If it needs some work, try it by doing such things as reducing debt and paying your bills on time.

10. Review Your Credit Report for Potential Mistakes

You can request a free credit report from the major credit reporting bureaus — Experian, Transunion, and Equifax — at Annual CreditReport.com. Review your report for mistakes that could be negatively affecting your credit score, and contact the credit bureaus about any errors you find.

11. Look for Credit Cards that Offer the Best Rewards

Earn on your spending with credit cards that offer rewards. Look for those that match your interests. For instance, if you love to travel, find a card that offers travel rewards. But watch out for cards with high interest rates. If you’re not someone who pays their card off every month, it may be worth steering clear of these.

12. Use Credit Card Points

Your credit card rewards aren’t doing you any good if you don’t redeem them. So have some fun and plan a trip or a new purchase with the rewards you’ve accumulated.

13. Consider Refinancing Your Loans

If you have outstanding loans, such as a mortgage or student loan debt, explore refinancing at a lower interest rate.

A lower rate could help you save money in the long run. You may even be able to accelerate your repayment, depending on the terms you select when you refinance.

14. Sell Some Stuff to Make Money

If you’ve done some decluttering of the extra items around your house, think about selling the things you no longer need. They’ll go to a new home, and you’ll get some extra cash in your pocket.

15. Consider Cutting Costly Habits

The cost of certain habits can really add up. If you’ve been meaning to quit smoking or stop impulse shopping, for instance, use financial planning as an incentive to do so. You’ll save money and potentially get on the road to a happier, even healthier, you.

16. Talk about Money with Your Partner

Set aside some time to discuss finances with your significant other. Discuss goals for your money, spending habits, repaying debts, and so on. Conversations like this help make sure you’re both on the same page, and can help prevent money conflicts in the future.

17. Figure Out Your Market Value

Has it been a while since you’ve had a pay raise? Do some research to determine what you’re worth and how much you should be making. Then, use that information to ask your boss for a salary increase, or to find a job that pays you more.

18. Negotiate Credit Card APR

If your credit cards carry a high-interest rate, ask the credit card company to lower your APR to help you manage your debt. If you have a low credit score, they may say no. But you won’t know unless you ask.

Even if they turn you down, speaking to the credit card company may be helpful. For instance, they should be able to tell you what you can do to make lowering your interest rate more likely.

19. Use Your FSA Funds

If flexible spending accounts (FSAs) are part of your employee benefits package, be sure to use them for doctors appointments or qualified purchases. Money in these accounts may not carry over year to year, so if you don’t use it, you lose it.

20. Cancel Unused Subscriptions and Memberships

Did you subscribe to a music service or for a gym membership you rarely use? A 2022 survey found that 42% of people pay for a subscription they don’t use and have forgotten about. Score extra savings by canceling unused subscriptions.

21. Talk to a Financial Planner

When it comes to making money moves, you don’t have to go it alone. A financial planner can help you develop your goals and suggest strategies to help you reach them. You can look for a qualified planner with an hourly fee you can afford. It may be worth it if it can help you save more overall.

22. Consider a New Bank Account

As you take steps to improve your financial health, it makes sense to evaluate your bank account. There may be options that offer you more, such as a minimum balance or higher interest. Explore what’s out there to see what’s most beneficial for you.

If you’re ready to switch to a new bank account, a SoFi Checking and Savings account could help you reach your money goals. You’ll earn a competitive APY and pay no account fees.

Better banking is here with up to 4.20% APY on SoFi Checking and Savings.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2023 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.

The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

SoFi members with direct deposit can earn up to 4.20% annual percentage yield (APY) interest on Savings account balances (including Vaults) and up to 1.20% APY on Checking account balances. There is no minimum direct deposit amount required to qualify for these rates. Members without direct deposit will earn 1.20% APY on all account balances in Checking and Savings (including Vaults). Interest rates are variable and subject to change at any time. These rates are current as of 4/25/2023. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet.
SOBK0423050

Source: sofi.com

Apache is functioning normally

April 29, 2023 by Brett Tams

Often times student loans get in the way of a mortgage because of the tremendous monthly debt, but fintech lender SoFi wants to create the opposite effect.

They’ve launched their so-called “Student Loan Payoff ReFi,” which as the name implies, is a way to get rid of student loan debt while refinancing the mortgage.

The general idea is that mortgage rates (at the moment) are lower than the interest rates on student loans, meaning borrowers can save money by shuffling debt to their existing mortgage balance.

Apparently 8.5 million households have student debt obligations, so this mechanism could equal a lot of savings, and a lot of originations for SoFi.

The program is being offered in conjunction with Fannie Mae, and is apparently cheaper than a traditional cash out refinance.

How the SoFi Student Loan Payoff ReFi Works

Say a student (or I suppose a parent) owns a home with a mortgage balance of $200,000 at 67% LTV, and there is also outstanding student loan debt of $40,000.

This hypothetical homeowner can combine the two debts into one and enjoy a lower interest rate, despite a higher LTV.

This example would push the LTV to 80%, likely the maximum under the program, but the rate would still be a competitive 3.75% or so on a 30-year fixed.

The payment would be even cheaper because student loans often amortize over a shorter period, such as 20 years. But the lower combined rate would offset the longer amortization period.

SoFi will actually disburse the funds directly to the servicer of the student loan debt, instead of just giving the borrower cash at closing.

Because the funds are going straight to the student loan company, instead of the bank account of the homeowner, there is less perceived risk.

After all, in general homeowners are welcome to tap equity to use for whatever they’d like, including paying off other loans. But lenders assume more risk if the funds can be used for any purpose, such as buying a Hummer.

This might explain why the interest rates on this product are more competitive than typical rates tied to a cash out refinance.

Still Explore All Options

Borrowers might get a rate closer to what they’d expect to receive via a rate and term refinance, the latter of which involves no cash to the borrower.

It might also be easier to qualify if the to-be-paid-off student loan debt no longer bumps up the DTI ratio to unacceptable levels.

This program works for both those who manage their own student debt and those who have a co-signer on the student loan such as a parent.

Per Experian data, the average homeowner with an outstanding co-signed student loan has a balance of $36,000, while those with Parent PLUS loans have $33,000 in outstanding debt.

The Parent PLUS loan is a private offering and apparently 90% of private student loans required a co-signer. They also tend to come with interest rates that are higher than current mortgage rates.

The one downside to a program like this is that the funds can only be used for one purpose. And your home loan debt will grow, which could potentially put your primary residence at risk.

As noted, a traditional cash out refinance allows you to tap equity and use funds for any reason. In a nutshell, you get more flexibility.

However, the interest rate might be higher than this product from SoFi. Of course, you’d still want to shop around to see if you can get the best of both worlds.

You might be able to snag a low rate without sacrificing any flexibility.

Source: thetruthaboutmortgage.com

Apache is functioning normally

April 28, 2023 by Brett Tams

Whether to pay off a car loan early depends on your budget, your loan’s interest rate and your other financial goals.

Generally, you should pay off your car loan early if you don’t have other high-interest debt or pressing expenses to worry about. But if that money could be better spent elsewhere, paying off your car loan early may not be the best choice.

When does paying off a car loan early make sense?

There are a few scenarios where it might make sense to focus your efforts on eliminating your auto loan debt. Consider whether these apply to you:

You don’t have higher-interest debt and want to free up the cash for other financial goals.
The auto loan has a higher interest rate than what you could earn by investing.
You’re hoping to buy a home soon and want to lower your debt-to-income ratio.
You recently received a windfall and have enough cash in reserves for emergencies.
You want to build your savings account faster to have funds available for business ideas or other investments that foster financial freedom.
You want to avoid having negative equity or being upside-down on your auto loan.
You’re debt-averse, and it’s an important step for you in obtaining financial security.

Benefits of paying off a car loan early

If you can manage it, paying off a car loan in full ahead of schedule can have some big benefits.

Save money on interest

Interest is typically spread out over the loan term. You’ll pay less interest by paying off your loan early since the lender will have less time to collect interest from you.

But even an extra payment here and there can make a difference. That extra amount should go directly toward the principal, especially if you specify that intention when you make your payment.

Use an auto loan early payoff calculator to find out how much you can save with additional monthly payments or one big lump payment toward your loan.

Key takeaway: The more money you add to your payments and the higher your loan amount, the more you can save.

Take ownership sooner

Until you pay off your car loan, your lender technically owns your vehicle. Taking ownership of the vehicle means you’ll get the title in your name. It also means you will have more options if you plan to sell the car or trade it in.

If your lender required minimum insurance coverage, you could potentially reduce insurance costs by going for basic coverage. Owning the vehicle outright will put you in control of whether to continue insurance coverage or adjust levels. But it’s a good idea to keep the protection if you can’t afford to replace your vehicle in case of an accident.

Key takeaway: Owning your vehicle means it’s easier to sell and can potentially lower insurance costs.

Less risk of being upside-down

Sometimes cars depreciate faster than the payoff schedule of an auto loan. This is especially true if you have a long repayment term or a high interest rate.

Being upside-down on a loan, or owing more on the car than it’s worth, is a tricky situation. You may run into problems if you try to sell or trade in the vehicle or if the vehicle is totaled. In all instances, you may need to pay your lender the discrepancy in a lump sum — although most lenders will allow you to roll the amount into your new loan if you trade in the vehicle.

Key takeaway: Understand how your vehicle will depreciate and avoid owing more money on your loan than the value of the car.

Improve your debt-to-income ratio

Your debt-to-income ratio is the percentage of your gross monthly income that goes toward debt payments. It helps lenders determine how much you can afford to borrow. The higher your DTI, the riskier you look as a borrower.

Paying off your car early eliminates your auto loan from the equation. Your DTI will naturally be lower, which opens you up for other forms of credit. It also helps improve your chances of refinancing other loans or consolidating credit card debt at a lower rate.

Key takeaway: A lower DTI ratio can help you qualify for better credit down the road.

Free up money for other expenses

The average monthly payment on a new car was $716 in the fourth quarter of 2022, according to a report by Experian.

Paying off your car loan is a big opportunity to make progress on other financial goals. If you keep the car you have and don’t take out another loan, you can put that money toward vacation savings, retirement funds or other debt.

And even if you bought used, dropping that $515 average payment could still make a significant difference in your budget.

Key takeaway: Build extra room into your budget with several hundred dollars each month.

Disadvantages of paying off a car loan early

Prepayment penalties and closing accounts may impact your finances. While there are pros to accelerating your auto loan payments, there are also some potential downsides to keep in mind.

Prepayment penalties

Some lenders charge a penalty for paying off a car loan early or making extra payments. Check your loan contract to see if your lender has one.

If your lender does charge a prepayment penalty, compare the cost to the potential savings you might get from accelerating your payoff schedule. If it’s too expensive, just continue paying down your loan on time — and put your extra money toward something else.

Lower credit score

If you stop making payments on a loan because you’ve paid it off, your streak of positive payment history will end. Additionally, your credit mix could be affected since credit bureaus like to see both installment loans, like auto loans, and credit lines, like credit cards.

Don’t let the fear of your credit score lowering hold you back from paying off your auto loan early, though. This potential dip is usually small and temporary, and if you continue to manage your credit accounts responsibly, it shouldn’t be an issue.

Money better spent elsewhere

If you have higher-interest debt, you may be better off focusing your efforts on those loans or credit cards first. That’s especially the case with credit cards, certain personal loans and short-term debt.

Even if you don’t have high-interest debt, your money may be more effective if put toward retirement, a Health Savings Account or some other tax-advantaged financial account. The same may go for general investing if your auto loan interest rate is low.

May not fit in your overall budget

If your budget is tight, it may be impossible to find any extra cash you can put toward your auto loan payment every month. Even if you can cut back in other areas, other areas of your financial life (such as high-interest debt, retirement and emergency fund) may be more important.

Before deciding to pay off your loan ahead of time, take the time to look at your budget and make sure it won’t place you in an even more precarious situation.

How to pay off a car loan early

Depending on how much money you have on hand, there are three ways you can work toward paying off your car loan ahead of schedule.

Pay it off in full

If you received a big bonus at work or a tax refund, or you have money saved up, you may want to make one lump-sum payment to pay off your car loan in full.

To do so, learn the 10-day payoff amount, which includes interest that’s accrued since your last monthly payment. Then send a check to the lender or make the payment online to bring the balance to $0.

Pay it off in a partial lump sum

If you don’t quite have enough to pay off the balance in full, you may make a large payment to pay down a big chunk of it. This won’t reduce your monthly payment, but it can significantly cut down on how long you’ll be in debt. And since it will go toward the principal, you’ll wind up paying less interest overall.

Increase your monthly payment

If you don’t have a large amount of cash you can put toward your auto loan, consider making larger payments each month instead. You can decide how much extra you want to pay. Even a small amount can save you money and time.

The bottom line

Paying off a car loan early can save you money — provided the lender doesn’t assess too large a prepayment penalty and you don’t have other high-interest debt. Even a few extra payments can go a long way to reducing your costs.

Before rushing to repay your auto loan, run the numbers to determine if it makes financial sense or if you should apply extra funds elsewhere. Also, keep your financial situation and goals in mind as you weigh the benefits and drawbacks to determine the best strategy for you.

Learn more

Source: thesimpledollar.com

Apache is functioning normally

April 28, 2023 by Brett Tams

While not all healthcare providers will report unpaid debt to credit bureaus, medical debt that ends up on your credit report could damage your credit score in the long run. That said, there’s a little sigh of relief for consumers where medical debt reporting is concerned.

In a process that started in July 2022, the three major credit bureaus, TransUnion, Experian, and Equifax, introduced the first stage of changes to medical debt reporting. This included extending the time period before unpaid medical collections appear on credit reports from six months to one year.

Additionally, paid medical bills are no longer included in credit reports, meaning they will not impact credit scores.

Further, with effect from April, 2023, medical debt for consumers who initially owed less than $500 has been removed from consumer credit reports.

These changes will benefit you in the following ways:

Time to Renegotiate the Bill with the Hospital

If a medical bill was initially reported but is later removed from your credit report, you have a full year which you can use to renegotiate, dispute, or work up payment plan with the hospital or healthcare provider before the bill can be re-added to the credit report.

This eases the strain and stress of debt payment, consequently, reducing the chances of getting a low credit score.

Opportunity to Consolidate Multiple Medical Bills

There are various ways to consolidate your medical debts. For example, you can pay it off with a zero-interest credit card and then pay off the credit card balance over time. Many credit cards offer promotional periods with zero interest rates for a certain period of time, typically between 12 to 18 months.

Other ways to consolidate your medical debts include taking a personal loan, taking a home equity loan, and enrolling for a debt management program.

How Changes in Medical Debt Reporting Impact Credit Scores

For starters, a longer grace period increases your chances of preventing your medical debt from ending up on credit reports.

Initially, like all other debt, paid medical debt would still reflect on your credit report for seven years. With negative information on your credit report, your credit scores continue taking a hit.

The removal of paid medical debts and the exemption of debts of $500 and below from credit reporting, therefore, gives your credit scores a great boost.

There are significant benefits of higher credit scores:

Better Loan Terms

Lenders view consumers with low credit scores as high-risk and will likely either turn you down or offer less favorable loan terms. Higher credit scores can provide you with greater financial flexibility and potentially save you money on interest charges. This is because lenders see you as a responsible borrower, making you more likely to be approved for loans, mortgages, and car leases.

You may also get lower interest rates, longer repayment periods, or larger loan amounts.

Increase in the Pool of Credit Cards you Can Qualify

A higher credit score can increase your chances of qualifying for credit cards with better terms. Credit card issuers use credit scores to work out your creditworthiness, and with a higher score, you may qualify for credit cards with better rewards programs, favorable interest rates, and higher credit limits.

Having a wider range of credit card options could allow you to choose a card that better fits your spending habits and financial goals. That said, it’s important to use credit cards responsibly and to avoid taking on too much debt, which could harm your credit score in the long run.

The Take Away

No one plans to have a medical debt, as it may come as an emergency. However, even with insurance coverage, not all expenses may be fully covered. This can put pressure on your finances in addition to your health. The changes in medical debt credit reporting is predicted to help more than 70% of consumers to not only have more time to manage their medical debt but also do the same with the least negative impact on their credit health.

Finally, it is advisable to regularly check your credit report to ascertain the implementation of the changes.

Source: creditabsolute.com

Apache is functioning normally

April 27, 2023 by Brett Tams

What Is a Credit Report and Why Does it Matter? – MintLife Blog

financial wellness. Your credit report includes your revolving accounts — such as credit cards and home equity lines of credit — as well as non-revolving accounts like school and car loans. Credit reports also note any missed payments, the length of your credit history, and your utilization rate on each account. On the whole, the report acts as a central location for measuring your current credit health in detail.

This vital collection of data gathered by a credit bureau helps calculate your credit score and inform potential lenders, landlords, and even employers about your financial wellness, habits, and routines. Your credit report is also a place to keep yourself on track. View your borrowing habits at a glance, make adjustments to possibly raise your credit score, or even catch fraudulent activity. Overall, understanding your credit report is a crucial step in gaining financial confidence.

What Information Is Included in a Credit Report?

You may still be wondering: what is a credit report exactly and how much data does it include? Credit bureaus collect a range of information, from basic, personal data to detailed borrowing history in order to paint a picture of your credit habits. Identification details clarify who you are, where you’ve lived, and a bit about your life. They will list your full name and any alternately used names, your birthday, current and former addresses, social security numbers, and your phone number.

The meat of the credit report includes your account history including the types of credit accounts, how long they’ve been open, and their credit limits. Each month, your balance will rise or fall on your report based on payments or charges. This in turn affects the utilization rate on each card as well. Each account will also note your payment history, noting any late payments for up to around seven years. Your credit report will also include the number of recent hard inquiries, which usually occur when you apply for a new credit card or loan.

Certain public records and legal details — such as lawsuits — may also be listed on your report. It also lists if you’ve filed for bankruptcy, received a tax lien or had a bill sent to a collection agency. Though specifics vary, the majority of these details are wiped from your report after seven years, so there are often ways to improve your credit standing over time.

How Does Information Get on Your Credit Report?

A credit bureau, also known as a credit reporting agency, gathers this information in one place so you don’t have to. Though there are hundreds throughout the world, the three main U.S. reporting agencies are TransUnion, Equifax, and Experian. They receive information via lending companies, courts, and local government to build your credit record. Every month, an assortment of data transfers from these locations to the credit bureau database.

If you open a new credit card, make a purchase on your store card, or pay down a balance, this data is sent to update your report. The agency organizes the data and displays information on your credit report in a clear layout for you or a potential lender to view. This constantly updating system means that your credit score may fluctuate at times. It also allows you to take immediate action on any troublesome accounts or in the case of identity theft.

Why Is It Important to Get a Credit Report?

Credit reports are an excellent tool for guiding large financial decisions. Say you’re looking to purchase a home in the next five years. Your report allows you to fully assess how to raise your score and which credit accounts most strongly affect your overall financial balance. Your report is also a glimpse into why your credit score has remained low or stagnant. It could be helpful to request a report before applying for a new credit card or transitioning to a new phase in life like graduate school.

Checking your credit report at least once a year, even if you are not planning any large financial changes, is often suggested for several reasons. Credit reports allow you to catch any discrepancies either in how your data was reported or if someone attempted to open an account under your name.

Where can you get a free credit report? Free credit report programs, like Turbo, can give you a glimpse into your score and history. If you’re looking to improve your credit score, these tools may be useful for frequent tracking and do not count against your credit as a hard inquiry.

How Does Your Credit Report Impact You?

Potential lenders and employers may check your credit report for the same reason you check in on yourself. Your credit report may signal that you can be trusted to make timely payments and prioritize your financial health. Employers have been known to check credit reports in order to confirm you’re able to stick to contracts and agreements.

Credit reports are most commonly used to determine approval for loans, credit limits, and interest rates. If you have some troubling details on your account, lenders may protect themselves by offering higher interest or lower credit limits until you’ve proven a strong history of payments. On a higher level, credit reports affect your mortgage interest rate or simply your likelihood of being approved for the mortgage in the first place.

In some cases, your credit report could also affect your insurance rates and other monthly bills. Some utility companies and cell phone companies determine offers and down payments based on your credit score. Overall, the healthier your credit report, the more chances you’ll have to practice good borrowing habits with a range of accounts.

A credit report is a detailed tracking tool of your borrowing and repayment history. The greater you understand your credit report, the more it can act as a tool for financial growth. Feeling confident about borrowing and managing debt comes over time, and your credit report is there to help track your progress along the way.

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Apache is functioning normally

April 26, 2023 by Brett Tams

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You were running around doing errands all weekend. From the field at your kid’s soccer game to the mall, it seems as though you covered every square inch of your town. You get home and check your pocket; your wallet is missing.

Don’t panic. In addition to calling your bank and credit card companies to report your cards lost or stolen or using your banking app to turn off your cards, you can take other steps to protect yourself from identity theft and credit card fraud.

In fact, if you have any reason to be concerned about identity theft or fraud,there’s a free service all three major credit bureaus (Experian, TransUnion, and Equifax) offer that can help you protect yourself: a fraud alert.

What Is a Credit Report Fraud Alert?

A credit report fraud alert tells creditors you may have recently been a victim of identity theft. Once you add a fraud alert to your credit report through one of the three major credit bureaus (Equifax, Experian, or TransUnion) that credit bureau also alerts the other two organizations. When potential lenders and creditors see a fraud alert, they should take additional steps to verify your identity before granting credit.

Credit report fraud alerts are different from other types of alerts, such as credit freezes or identity theft reports. A credit freeze prevents anyone, including you, from accessing your credit report without your permission. An identity theft report, as the name suggests, shows creditors that you recently fell victim to identity theft.

If you file an identity theft report, you should also put a fraud alert on your credit report or even freeze your report to make it harder for criminals to open new lines of credit in your name. As an added benefit, when you place a fraud alert on your credit report, you’re eligible to get a free copy of your credit report from all three credit bureaus twice in that year instead of just once.

Types of Credit Report Fraud Alerts

Consumers can rely on three different types of credit report fraud alerts, depending on the situation. They vary in duration and who qualifies for each type of alert.

Initial Fraud Alert

If you worry you’ve been a victim of fraud or just want an added layer of protection for your credit and identity, you can easily apply for an initial fraud alert. This alert lasts for one year. It encourages companies to take an extra step, like calling a phone number you provide, to confirm you filled out a new credit or loan application.

An initial fraud alert doesn’t prevent you from applying for new credit. (That’s the job of a credit freeze.) It also doesn’t prevent criminals from using your existing credit cards if they’ve gained access to your account number.

Extended Fraud Alert

An extended fraud alert lasts for seven years. It takes a little more paperwork to apply, but it’s also free.

You can only apply if you’re a victim of identity theft and file a police report or a report at IdentityTheft.gov. Since gathering all the documentation takes time, you can file an initial fraud alert in the meantime.

In addition to receiving an additional free copy of your credit report from all three bureaus the year you place the alert, you will also be removed from marketing lists for unsolicited credit card and insurance offers for five years.

Active-Duty Alert

Members of the U.S. military can protect their credit for added peace of mind while they’re deployed. An active-duty alert functions just like an initial fraud alert, making it harder for someone to open a new account in your name. Like an initial fraud alert, an active-duty alert lasts for one year.

How Credit Report Fraud Alerts Work

When you file a credit report fraud alert, banks, credit card companies, and lenders should take an extra step to verify your information before approving your credit application.

Often, that means they must call a phone number you provide to verify that you really completed the application. A fraud alert also allows you to secure a second free credit report from each of the three bureaus in the year you initiate the report.

Keep in mind that a fraud alert does not stop criminals from using your existing credit cards to make fraudulent purchases.

Placing a Credit Report Fraud Alert

Fortunately, it’s easy and free to place a fraud alert on your credit report. Once you place the alert with one credit bureau, they share the information with the other bureaus. The steps you take depend on whether you want to place an initial fraud alert or an extended one.

How to Place an Initial Fraud Alert

You don’t need to be a victim of identity theft or credit card fraud to request an initial fraud alert. To place one, reach out to one of the three credit bureaus. Each has a slightly different process.

Equifax

Visit Equifax’s fraud and active-duty alert page to place a fraud alert with Equifax. You must log in to your account and provide your name, address, and Social Security number. You can also call 800-525-6285 to request a fraud alert by phone.

Experian

To place a fraud alert with Experian, you can visit the fraud alert center and select “Add a fraud alert.” Choose the type of alert, and then fill out the information requested on the form. You need a valid email address and your Social Security number. You can also call to place a fraud alert at 888-EXPERIAN (888-397-3742).

TransUnion

To place your fraud alert with TransUnion, visit TransUnion’s fraud alert page. Log in to your TransUnion account and provide a valid email address and your Social Security number. You can also call 800-916-8800 to place a fraud alert by phone.

How to Place an Extended Fraud Alert on Your Credit Reports

Placing an extended fraud alert requires a few extra steps and some additional information. For example, you must file and submit an identity theft report. You can download the form to mail at these websites:

Each credit bureau has slightly different requirements to prove your identity and address.

Before mailing the form, gather all the documents you must mail with it, including the:

Police report, law enforcement agency report, or Federal Trade Commission identity theft report
Photocopy of documentation to prove your identity, such as your Social Security card, pay stub with your Social Security number, W2, or 1099.
Photocopy of paperwork to prove your mailing address, such as a driver’s license or state ID card, rental lease agreement, house deed, pay stub showing your address, bank statement with your address, or utility bill with your address.

TransUnion also accepts a canceled check with your home address, a stamped P.O. Box receipt, or a signed letter from a homeless shelter as proof of residence.

Once you’ve gathered this information, send it to one of the bureaus along with the extended fraud alert form you downloaded from the website. Experian allows you to upload the form and supporting documents electronically.

Once you’ve gathered the necessary documentation, mail the form you downloaded and printed to the appropriate address below.

Equifax Information Services LLC
P.O. Box 105069
Atlanta, GA 30348-5069

Experian
P.O. Box 9554
Allen, TX 75013
(or upload)

TransUnion
P.O. Box 2000
Chester, PA 19016

Benefits of Placing a Credit Report Fraud Alert

If you’re wondering if you should place a credit report fraud alert, then you should. A fraud alert can help protect you from identity theft and credit card fraud, which provides added peace of mind.

If you’ve been a victim of fraud or recently lost your wallet or misplaced important documents like your driver’s license, it’s worth taking the time to place a credit report fraud alert.

Although a credit report fraud alert can’t stop thieves from using your existing credit cards (you have to report those stolen), it makes it harder for someone to open new credit in your name.

If you place an extended fraud alert, you’ll also be free from unsolicited credit card or insurance applications for five years. That means less junk mail and less chance thieves can open credit cards or apply for insurance in your name.

Final Word

While the Federal Trade Commission’s data shows instances of credit card fraud dropped slightly from 2021 to 2022, the amount of money scammed from consumers rose by 30% in the past year, up to a staggering $8.8 billion. Fortunately, there are steps you can take to protect yourself.

For instance, use virtual account numbers for online shopping, read your bank and credit card statements carefully, and sign up to receive notifications via text if a card shows unusual activity. Finally, set up an initial credit report fraud alert as an added layer of identity protection.

Dawn Allcot is a full-time freelance writer and content marketing expert, specializing in personal finance, technology, real estate, and insurance. Her work has been widely published across the web, including on Bankrate, The Balance, Solvable, and the award-winning Chase News & Stories portal. Dawn is, additionally, the founder of GeekTravelGuide.net, a travel, technology, and entertainment website for the geek in all of us.

Source: moneycrashers.com

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1. Set Financial Goals

2. Create a Budget

3. Set Up Direct Deposit

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9. Check Your Credit Score

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14. Sell Some Stuff to Make Money

15. Consider Cutting Costly Habits

16. Talk about Money with Your Partner

17. Figure Out Your Market Value

18. Negotiate Credit Card APR

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21. Talk to a Financial Planner

22. Consider a New Bank Account

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How Does Information Get on Your Credit Report?

Why Is It Important to Get a Credit Report?

How Does Your Credit Report Impact You?

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