Tag Archives: credit monitoring

What’s my Credit Score?

According to a recent report by Smartcredit.com, only 4% of people access their free credit each year. The government originally started requiring the three major credit bureaus—Equifax, Transunion, and Experian—to provide a free annual report every year to encourage credit education, reduce fraud and identity theft among consumers. Given the 4% utilization rate, it appears the effort may not be working according to plan. However, credit monitoring is big business as more and more players are entering the market for your financial management dollars. Here are five things to consider regarding personal credit management and your free report:

1. Annualcreditreport.com is the ONLY government sponsored site that offers a free annual report from each of the three credit bureaus. There are countless copycats and plenty of other legitimate providers, but make sure you know what kind of site you’re visiting before you invest money with a credit monitoring service.

2. This site (annualcreditreport.com) allows users to choose the method and timing of report orders. The reports can be ordered at the same time or staggered over the course of the year: user option. Also, the credit history report is free, BUT it does cost to get a FICO score as part of the order.

3. Once you order a report from one of the bureaus, it’s not free again for a full year.

4. Since the report is designed to promote awareness, it makes sense to use the report to familiarize yourself with the content of your report. If there are errors or fraudulent information on your history, there are ways to dispute the information and get the report corrected. It’s important to dispute the information immediately so when good credit matters—loan, insurance, and job application to name a few—your record will be correct and accurately reflect your history.

5. As identity theft and security breaches of personal information become more common, it is essential to protect identity and monitor fraudulent activity. All three of the main bureaus, and many other quality credit monitoring providers, offer ongoing protection in various forms. It would be very wise to use annualcreditreport.com as an introduction to your credit, and then find a service to help you monitor your credit and personal information moving forward. It is much easier to plan ahead and purchase protection than it is to try to pick up the pieces after you’ve been victimized by identity theft.

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If your odds were 1 in 30 How Daring Would you Be?

There is a 1 in 30 chance that you were a victim of identity theft in 2008. In addition, there is a 1 in 10 chance that you’ve already been a victim of ID theft at some point in your life. There are some other eye-opening statistics at the bottom of this post that I borrowed from spendonlife.com. It seems like identity theft is happening more and more often to more and more people. And, the thieves appear to be getting more and more creative.

I don’t want to bog you down with piles of numbers but here a few key statistics to help lay some groundwork. There are 307 million people and 232.4 million adults in America according to the 2009 US Census. Of those, (according to Javelin Strategy and Research) 50.2 million are using a credit monitoring service to keep track of their credit history. That leaves 182.2 million US adults who are NOT monitoring their credit. And finally, 10 million people were victimized by identity theft in 2008. There are too many numbers to really break down in one blog post, but my one overriding thought is that there are too many unassuming people out there who do not appear to be adequately protected.

The assumption I take away from this is that people look at ID theft protection as just another form of (unwanted and unnecessary) insurance. I know there are people who don’t necessarily think they need insurance and assume it’s a waste of money UNTIL they have a loss. Then, they’re true believers and wouldn’t ever be caught dead without it.

At the Bank, we offer identity theft protection. There are various levels of protection that can be relatively inexpensive. However, it is one of the products almost no one ever uses. Why is this? Do people not see value in identity theft protection? Is identity theft something that people don’t see as an imminent threat? OR, is there another avenue for identity theft protection (i.e. through a homeowners insurance policy) that provides better value? Given the statistics below that demonstrate the enormous cost to victims of ID theft (both time and money), the cost of protection seems like money well spent.

I would love some feedback on this topic so feel free to comment and let me know what you think about identity theft and people’s general response to it. If you’re bored by the topic feel free to let me know that as well, or throw out some other suggestions.

Thanks for reading.

IDENTITY THEFT STATISTICS (courtesy of spendonlife.com)

Victims
• There were 10 million victims of identity theft in 2008 in the United States (Javelin Strategy and Research, 2009).
• 1 in every 10 U.S. consumers has already been victimized by identity theft (Javelin Strategy and Research, 2009).
• 1.6 million households experienced fraud not related to credit cards (i.e. their bank accounts or debit cards were compromised) (U.S. Department of Justice, 2005).
• Those households with incomes higher than $70,000 were twice as likely to experience identity theft than those with salaries under $50,000 (U.S. DOJ, 2005).
• 7% of identity theft victims had their information stolen to commit medical identity theft.

Discovery
• 38-48% discover someone has stolen their identity within three months, while 9-18% of victims don’t learn that their identity has been stolen for four or more years (Identity Theft Resource Center Aftermath Study, 2004).
• 50.2 million Americans were using a credit monitoring service as of September 2008 (Javelin Strategy and Research, 2009).
• 44% of consumers view their credit reports using AnnualCreditReport.com. One in seven consumers receive their credit report via a credit monitoring service. (Javelin Strategy and Research, 2009).

Recovery
• It can take up to 5,840 hours (the equivalent of working a full-time job for two years) to correct the damage from ID theft, depending on the severity of the case (ITRC Aftermath Study, 2004).
• The average victim spends 330 hours repairing the damage (ITRC Aftermath Study, 2004).
• It takes 26-32% of victims between 4 and 6 months to straighten out problems caused by identity theft; 11-23% of victims spend 7 months to a year resolving their cases (ITRC Aftermath Study, 2004).
• 25.9 million Americans carry identity theft insurance (as of September 2008, from Javelin Strategy and Research, 2009).
• After suffering identity theft, 46% of victims installed antivirus, anti-spyware, or a firewall on their computer. 23% switched their primary bank or credit union, and 22% switched credit card companies (Javelin Strategy and Research, 2009).
• Victims of ID theft must contact multiple agencies to resolve the fraud: 66% interact with financial institutions; 40% contact credit bureaus; 35% seek help from law enforcement; 22% deal with debt collectors; 20% work with identity theft assistant services; and 13% contact the Federal Trade Commission (Javelin Strategy and Research, 2009).

Costs
• In 2008, existing account fraud in the U.S. totaled $31 billion (Javelin Strategy and Research, 2009).
• Businesses across the world lose $221 billion a year due to identity theft (Aberdeen Group).
• On average, victims lose between $851 and $1,378 out-of-pocket trying to resolve identity theft (ITRC Aftermath Study, 2004).
• The mean cost per victim is $500 (Javelin Strategy and Research, 2009).
• 47% of victims encounter problems qualifying for a new loan (ITRC Aftermath Study, 2004).
• 70% of victims have difficulty removing negative information that resulted from identity theft from their credit reports (ITRC Aftermath Study, 2004).
• Dollar amount lost per household averaged $1,620 (U.S. DOJ, 2005).

Perpetrators
• 43% of victims knew the perpetrator (ITRC Aftermath Study, 2004).
• In cases of child identity theft, the most common perpetrator is the child’s parent (ITRC Aftermath Study, 2004).

Methods
• Stolen wallets and physical paperwork accounts for almost half (43%) of all identity theft (Javelin Strategy and Research, 2009).
• Online methods accounted for only 11% (Javelin Strategy and Research, 2009).
• 38% of ID theft victims had their debit or credit card number stolen (Javelin Strategy and Research, 2009).
• 37% of ID theft victims had their Social Security number stolen (Javelin Strategy and Research, 2009).
• 36% of ID theft victims had their name and phone number compromised (Javelin Strategy and Research, 2009).
• 24% of ID theft victims had their financial account numbers compromised (Javelin Strategy and Research, 2009).
• More than 35 million data records were compromised in corporate and government data breaches in 2008 (ITRC).
• 59% of new account fraud that occurred in 2008 involved opening up a new credit card and store-branded credit card accounts (Javelin Strategy and Research, 2009).