I just heard on the radio that there will be over 18 million cases of ID theft for 2011! That is a crazy scary high number of cases last year. It does make sense to me though, as people are getting more of their financial lives stored online, and thieves are getting more high tech its bound to happen.
I am most of you log into a secure website at least once per day, it could to check your balance, order something online, or even to play a paid game like World of Warcraft. With all that data floating around its a wonder any of still have our private data private! The good news is as many more of our lives are tangled up online data security is becoming even that much more advanced. I feel my data is more protected now at the end of the year than it was at the start of 2011! And I feel that it will just keep getting safer and safer. Its true that criminals will also adjust to the new technologies, and that nothing is truly safe, still its harder for them to get a hold of our information.
As technology increases, and crooks get smarter, good news is that your credit monitoring service also evolves. The team we are partnered with at Identity Guard is the leader in ID theft protection. It is amazing to me all the ways they are working on to keep your online identity safe. I am very excited to working with them in 2012, and to keep our customers up to date on the latest ways to improve credit scores, and any thing else that is related to credit.
While ID theft is unfortunately going to be with us for the foreseeable future, having a credit monitoring service is still one of the best ways to protect yourself from these would be thieves. In addition its just a great way to keep on track of your credit and credit scores.
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In yesterdays post, we quickly talked about a soft inquiry, I was asked if I could do a quick recap of what is the difference between a hard inquiry and a soft inquiry on your credit reports. Here you go!
For those of you out there who just skim an article looking for the quickest answer, here you go! Just remember this. Hard bad, soft good. For the rest of us who want a little more info lets dig into the exciting world of credit inquiry’s! (ok I know it’s not that exciting).
We will start with the evil ones, the hard inquiry. A hard inquiry is when a potential lender pulls your credit report. This can be anything from a credit card company, a mortgage company, pay day loan, buying a car, insurance quote, to applying for an apartment. A hard inquiry will hurt your credit score. Just having one will not harm you score very much, and your score will quickly rebound from it. Where you score can take a beating is if you are constantly applying for credit. Have numerous hard inquiry’s spread over a period of time will decrease your score, sometimes significantly. The rational behind this is that if someone is looking at your credit, you must be shopping around for credit. And if your looking for credit, there is a good chance you will get credit, and this will throw off the balances that you have in place, and your scores will have to be readjusted according to your new balances. And if constantly getting hard inquiry’s it shows the credit scoring companies that you could be building up a lot of debt, and could be potentially carrying large balances that will again change your credit to debit ratio.
There is some good news credit scoring takes into account that you will want to shop for the best rate possible when considering a large purchase such as a car, mortgage, or large ticket item. You will still be dinged for a hard inquiry, but you are allowed to shop around for a short period of time, usually around two weeks. In this period you can get more hard inquiry’s and they will not have same effect on your score if you had been spreading those out over weeks or months.
You still with me? Ok so this usually comes the most common question, does checking my credit report, or enrolling in a credit monitoring hurt my credit score? This is where soft inquiry come in. When you pull your credit or sign up with a credit monitoring service you get what is called a soft inquiry. And these will not hurt you credit score. You are allowed to pull your credit as often as you like and have no penalty for doing so. You are the only who will ever see your soft inquiry lenders do not have access to this data. This is one of the benefits of a credit monitoring service is the ability to check your credit score as often as you would like. That way you know where your score is before shopping for credit, knowing your score will give you a good idea if you will be approved for credit or not. With that information you will then know if its worth the risk of a hard inquiry on your credit score.
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I have been in the credit monitoring business for over 10 years now! And there have been many questions that I did not know the answer too, but most of them with a little research I could find out and then give my interpenetration of it. I feel with credit related questions there are the black and white answers, for example “will enrolling in a credit monitoring service hurt my credit score?”. The answer is 100% no, it will not have any effect on your credit score, its a soft inquiry and they will not harm you.
To more of grey area answers where nobody truly knows the answers. An example would be “Holding 30% debt on your credit cards is the fastest way to build credit”. Well 30% is not a magic number, you do not have to pull out your calculator and figure 30% down to the penny. And to be honest I have even advised that 30% is a good number to build up your credit quickly, but there is as much evidence to show that 10% or 20% will build it just as fast. You see, what the credit bureaus are looking for is to show you can make month payments on time, every month for a period of time.
I would say that in my years of doing this, that its about a 50/50 split on where the answers may fall. Like most things in life we are using our best experiences and data available to use to make our answers. With that said here is a seemingly very simple question for which I have no answer to.
I question came in asking what is the average amount of times per year is your credit checked? Well I tossed that question into Google and thought I would be overwhelmed with answers. It turns out I found none! Not even at Wikipedia which usually has a very diverse set of answers. You just have to be sure to take them all with a grain of salt as its human edited, and as such any “experts” can state whatever they want.
So I thought well I guess I can try to gather some data on my own to take a best guess answer at it. Asking people in the office how many times they thought their credit was pulled brought up a huge range of answers. It seems as an average many people get a hard inquiry more times a year than they thought.
An good example of this is a younger person who has only been in the work force for a few years. Over the last year they moved into a new apartment, and with that came around 5 checks to their credit. They then bought a new car, shopping for the best deal they went to 3 different dealerships, and that is 3 new inquiry. After they bought the new car, they need insurance, shopping around again for the best rate racked up 3 more inquiry’s. This seem to be about the average here in our office. We did have many outliers though, some people had no inquiry’s at all over the last year, and others had many more!
So what does this all mean? Well not much, except for the fact that this just shows how many times per year we willing give out our financial information to a 3rd party, and that if you add that up over the years it becomes a pretty scary number of places that our personal data is stored, and could be compromised by a security breach, and shows how having a credit monitoring service in place can really help your protect your credit!
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