John Caserta discussed what to do if you’ve been affected by the Equifax breach. With Equifax estimating that nearly 143 million Americans were affected during its data breach, there’s a good chance that you’re one of them. And if you’re not, it would still be wise to the steps to help reduce the chance that your personal information is misused.
Order your free credit report from each of the three credit reporting bureaus including Equifax, Experian, and Transunion by visiting annualcreditreport.com. And since you’re entitled to a free report from each of the bureaus, spacing out your request from each bureau over the course of the year can help spot issues over a longer period of time.
Consider placing a fraud alert on your credit profile. It will alert bureaus that you might be a victim of identify fraud. If someone tries to open a line of credit using your information, the bureau will have to verify your identity.
Keep an eye on the activity in your bank account and your credit cards. Most financial institutions will provide you with text alerts that can help monitor your activity.
Consider freezing your credit. While a credit freeze can help prevent new lines of credit from being opened, it will not prevent new charges from appearing on your existing lines of credit. Moreover, there may be a cost associated with a credit freeze. And if you plan on opening new lines of credit in the near future, a credit freeze may make it more difficult to do so.
Sign up for a one year complimentary subscription to TrustedID Premier, which will provide credit monitoring and identity theft protection. Those affected have until November 21 to take advantage of the offer. But keep in mind, it can prevent you from participating in class action lawsuits.
Source: ftc.gov
While each bureau will have its own formula for determining a credit score, in general the following categories of information are taken into account:
Payment History (35%)
Amount Owed (30%)
New Credit (10%)
Length of Credit History (15%)
Credit Mix (10%)
Credit scores typically range from 300-500.
Source: myfico.com
Improving your credit score
If your score falls on the lower end of the score range, you can take the following steps to help improve your credit:
Check your credit report for errors.
Setup payment reminders to avoid missed or late payments. Even though it’s recommended you pay more than the minimum amount owed on your credit card, having the minimum amount paid automatically will avoid late payments. It’s also important to pay other bills on time as well as they will appear on your credit report.
Pay down the amount of debt that you owe and keep the balances on your credit lines low.
Apply for new credit only as needed.
Source: myfico.com
Establishing a credit profile
Apply for a secured credit card, which is backed by a cash deposit.
Apply for a loan with a co-signer.
Use a credit-builder loan.
Become an authorized user on someone else’s credit card.
Request a credit limit increase.
Pay student loans on time.
Source: nerdwallet.com, Experian.com
Credit Report vs Credit Scores
While you can get your credit report for free from annualcreditreport.com, your credit score often comes at a price (or at least signing up for a subscription or service). But some credit cards will print your credit score on your monthly statement. And Discover will provide you with your FICO score whether or not you’re a customer by visiting http://www.creditscorecard.com/registration.