Why Do I Need Identity Theft Insurance?

Identity Theft Insurance

We live in slightly paranoid times. It’s one of the side-effects of being so aware of what’s going on in our communities, our country, and our world, thanks to real-time news and a constant deluge of social media updates.

But if you’re like many who now feel compelled to shred every piece of junk mail, shield your screen while typing in your PIN number at a check-out stand, or delete any suspicious emails, you’re not alone in beginning to understand the scope of identity theft.

A study conducted this year by Javelin Strategy and Research for the Insurance Information Institute revealed that identity theft scammers stole $16 billion from a record 15.4 million American consumers in 2016 alone.

The previous year, identity theft impacted 13.1 million individuals, and researchers say that since 2010, identity theft has cost the country more than $100 billion.

Big Money, Real Problems

The scope of identity theft’s impact has made many consumers consider their options when it comes to identity theft insurance, one of many services provided by professional companies engaged in real-time credit monitoring and repair.

Identity theft dangers lurk everywhere, especially online, unfortunately, as a result of our increasing use of mobile technology for shopping, banking, and general everyday convenience.

While old-fashioned identity theft still occasionally occurs through discarded or stolen mail or improperly disposed bank records or credit card bills, the digital age means it’s actually easier for thieves to access your most important financial information.

We think very little of giving out credit information for online purchases or uploading our credit cards for use in the new wave of tap-and-go digital banking services, but a lost or stolen cell phone can now be an instant pipeline to all of our critical financial details.

Even a voice-activated digital assistant like Alexa or a similar service can create a potential pipeline for hackers to use to capture your information.

Online scammers have also become more aggressive in sending out incredibly authentic looking emails from legitimate looking addresses, asking us to reconfirm our banking details or provide address updates. They’re spam, and for those who fall victim, it’s often up to a credit fixer to help try to repair the damage.

Proactive Steps

It’s too late for most of us to retreat from the digital world, but we can certainly get a helping hand in keeping our data safe.

And identity theft insurance can also provide some peace of mind for those who fear the very real impact of identity theft, not to mention the nightmarish process of closing accounts, reconciling illegal purchases or dealing with the very serious implications identity theft can have on our credit reports and our credit scores.

Are you in the market for professional services to help with a credit fix? We can help provide information and real results.

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Credit Repair Education and Where to Find It

credit repair education

The first step toward better credit is realizing you need some help. And now that you’ve made that successful first step, where can you go to learn more about credit repair, its costs, its effectiveness, and what role you can play in turning around your credit story?

It turns out there are lots of comprehensive credit repair education resources available, both in the form of print and online books and guides, as well as a wide variety of expert blogs. There are also credit repair classes and credit repair courses that you can take to become more aware of your credit behavior and that can provide a path to a vastly improved credit score.

A Good Read

A quick visit to Amazon.com reveals a bewildering array of credit repair books that promise to make you an overnight, do-it-yourself master of credit repair. Let us suggest a less fly-by-night approach and instead become familiar with recognized financial experts such as Dave Ramsey and the newest edition of his bestselling Total Money Makeover – hands-on, real-world suggestions for investing, financial management, and credit-building behavior.

The same can also be said for Cherie Lowe’s Slaying the Debt Dragon or Regina Leeds’ One Year to an Organized Financial Life: Both speak from experience about digging themselves out of debt and repairing their credit through sound financial practices.

If you’re looking for a helpful online resource, check out Credit Revolution, a free e-book written by three of the biggest figures in the credit repair world, revealing many of the behind-the-scenes secrets of credit repair.

An Abundance of Online Sources

The web is full of blogs, podcasts and sites providing credit repair resources, but again, it takes a careful eye to spot those that are often product placement, versus those with a holistic view of real credit repair.

For wide but knowledgeable advice on the best steps to credit repair, consider the online suggestions of figures such as Clark Howard, Paula Pant’s Afford Anything podcast, or Money Girl with Laura Adams, all of which can provide helpful strategies for credit improvement.

Another useful source is the Credit Insider Guide, a written-by-lawyers collection of online material about the realities of credit repair, and how a professional firm might be a best step in turning your credit issues around.

And for the millions of Americans who are burdened with student loan debt, turn to The Student’s Guide to Credit, an online guide which can help you understand the long-term importance of keeping on top of your loan obligations.

Sign Up for Credit Repair Classes

Finally, consider signing up for a credit repair class, especially one offered through a local community college or community center. The web is full of offers for credit repair courses, but working with a local professional is a much safer bet, as they’ll be able to provide direct and unbiased information, rather than a product pitch. The lessons you learn will go a long way in helping to build a better financial future.

Looking for other credit repair resources? We offer a wide range of tools and professional services that can help boost your credit score.

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Why Low Credit Utilization is Key to a Good Credit Score

Good Credit Score

Credit scores aren’t as cut-and-dried as you may think. In fact, there are many factors that go into determining your score, and knowing the weight that is placed on each can help you better understand how to clean up your credit, or how to keep your credit score from falling in the first place.

Your FICO score, the most common score used to determine creditworthiness, is comprised of five factors, with your level of credit utilization accounting for 30 percent. We’ll talk about that more in-depth in a minute. But first, let’s briefly outline the other four factors, and the weight of each when it comes to determining your overall credit score:

  • Payment History (35 percent) – This is the most important factor in your credit score and any record of late payments will have a negative impact.
  • Age/Length of Credit History (15 percent) – The longer you’ve had credit established, the better for your score.
  • New Credit/Recent Inquiries (10 percent) – While occasional inquiries or opening a new account won’t negatively affect your credit, having many inquiries or opening a number of accounts within a short period of time represents a risk and can lower your score.
  • Credit Mix (10 percent) – This factors in the number and types of accounts you have in use. Types of accounts include credit cards, retail accounts, installment loans, finance company accounts and mortgage loans.

Understanding Credit Utilization

Credit utilization is the second-most-important factor behind payment history when it comes to calculating your credit score. To determine this part of the equation, credit bureaus look at your balance-to-limit ratio.

When scoring your utilization, FICO takes into account both individual card usage and total card usage — or the total of all of your credit card balances compared to your overall credit limits. High utilization in either of these categories can cause your credit score to drop. That’s because the credit bureaus view high utilization as a risk that you may be more likely to default on your credit repayment obligations.

Your balance on any given credit card generally should not exceed 30 percent of your credit limit. Staying below 30 percent can make a positive impact on your credit report because it shows that you’re only using a small portion of the credit available to you.

To calculate your own utilization on each of your cards, divide the balance by your credit limit, then multiply by 100.

The best way to keep your credit utilization in check is to pay your balances in full each month. Making payments before the due date can also help. Because credit card information is updated to the credit bureaus based on billing cycles, your credit score may not reflect your most recent balance or credit limit. Instead, the information as of your account statement closing date will be used in calculating your credit score.

Non-usage can hurt, too

While maintaining credit utilization of less than 30 percent is crucial in order to clean up credit reports, it’s also important to understand the role non-usage of open accounts plays in determining your credit score. Overextending yourself on credit will certainly drag your score down, but a lack of credit use can also have a negative impact. A lengthy period of inactivity on your accounts can lower your score, or make it difficult for the credit bureaus to calculate your score at all.

With payment history being the most heavily weighted factor in determining your credit score, it’s important to remember that using your credit after an extended period of non-usage won’t immediately boost or establish your score. Most credit scoring models require several months of usage to calculate a score.

When it comes to credit utilization, being smart about it and never overextending your limits will give you the best chance of maintaining a good credit score, or raising a low credit score.

Understanding all of the factors that affect your credit can be difficult, and if you’re in need of credit repair services, Lexington Law can help. We understand your credit report and can help you leverage your rights to ensure that your report remains fair and accurate. Contact us today for your free credit report summary and consultation.

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Confused About Refinancing Your Home? Consider These 6 Tips

refinancing your home

With interest rates still at low historical levels, many homeowners may have considered the idea of refinancing their homes to save some money – but may be concerned about the hassles and headaches involved to pursue the option.

It turns out that the time spent doing your research and shopping around for a mortgage refinance deal can definitely be worth it. The National Bureau of Economic Research recently surveyed the market and indicated that at least 20 percent of homeowners could qualify for refinancing, saving them an average of more than $11,000 – and a total savings to consumers of more than $5 billion.

Refinancing is not a simple process, but if you follow these six steps, you might find a solution that could save you a significant amount of money – even if you’re challenged by credit issues.

Do Your Research

The best approach to finding a deal is to do some detective work. Start with your own lender or bank, and simply ask them if refinancing is an option. Then, do some research and speak with the competitors. You might even be pre-qualified for refinancing; certainly ask them for some good-faith estimates on what they might be able to do to work with your loan. Do some online searches, or even go to a lender or financial institution in a nearby city – the more evidence you have of the potential to save money, you might even be able to get your own lender to step up to the plate.

Prepare for the Paperwork

Part of most homeowners’ aversion to the idea of refinancing stems from the challenges involved in the process – and they’re certainly real. Banks have made refinancing a much more complex process than it was in the free-wheeling days a decade ago, with some homeowners spending as much as three months to score a deal, even with sterling credit.

Be prepared to do almost as much work as you did when you initially purchased your house. That means having all of your documentation and supporting materials at hand, even when you’re making those initial inquiries with potential lenders. It’s critical to have copies of your recent income tax returns, your bank statements, copies of your pay stubs and other financial details that a lender can use to start the process. Some lenders will also allow you to begin an application online, which can ultimately save time. And be prepared for the long haul.

The 1 Percent Rule May Not Apply

When people are considering the benefits of refinancing their mortgage, the standard wisdom suggests that it’s not really worth the effort unless you can reduce at least 1 percent of your current interest rate. While that’s probably good advice if you’re not willing to do the work involved, experts say that even a one-quarter of a percent change could save you significant money down the road, provided that the timing and your long-term plans for the home all add up.

To see if refinancing is right for you, consider what your own financial break-even point might be for a refi deal. How long do you think you’ll be living in your home? Are you planning on sticking with your current job for a long period? Those computations will help you figure out if the refinance is worth the effort.

The math should be straightforward: Consider your total projected savings per month as a result of refinancing, and divide it by the expected closing costs involved. If it costs approximately $6,000 to do a refinance but it looks like you’ll be saving $200 a month for the life of the loan, it’s going to take you at least 30 months to begin to break even. If that fits into your long-term plans for the home, then even a small percentage change will pay off in the end.

Banks are Willing to Refinance – Really

As mentioned before, banks have indeed cracked down on the rules and procedures involved in refinancing. But they haven’t made it impossible, and still need your business, so keep an open mind and talk with your banking representative.

You may be surprised by their relative flexibility. Experts say that even folks with less-than-fantastic credit can qualify: A credit score of 580 may put you in the running for a Federal Housing Administration loan or refinancing offer, and a score of at least 620 could be sufficient to work with some traditional lenders.

Even the idea of a 10-percent downpayment on a home is not the absolute rule nowadays, with some lenders willing to accept as little as a 3-percent down payment. Asking does not hurt, and you may be surprised by the flexibility.

Better credit will definitely get you a better deal, so you may want to consider the option of working with a credit repair company to help address inaccuracies or issues that may be dragging down your score.

Score a Deal on Your Closing Costs

One of the biggest disincentives for refinancing is the fear of major closing costs. Those are certainly valid concerns, but savvy homeowners are also discovering many ways to roll those costs into the loan themselves, or have considered taking a marginally higher interest rate in order to cut those closing costs. It’s a math game, but for some borrowers, it works.

The notion of “no-cost” financing can indeed be helpful, especially for those who only see themselves living in their house for three to four years, and can accept a higher interest rate or avoid the impact of closing costs to maximize their savings.

Don’t Feel Attached to Your Lender

Ultimately, the best deal is going to drive the refinance process, so don’t feel beholden to your current lender. If they’ve been demanding, discourteous or have tried to dissuade you from heading down the refinancing road, shop around. You’ll likely find other options who are more amenable to your business.

If you’d like some professional suggestions on the best ways to help fix your credit score, we can provide some answers.

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You Should Make Good Credit a Priority – Even in Retirement

Good Credit Priority in Retirement

Each month sees thousands of baby boomers joining the ranks of the retired, as one of America’s most significant waves of population finally reaches the age where Social Security benefits and post-work plans start to come to life.

Today’s retirees are a little different from the somewhat simpler times of the past. Fewer are retiring with guaranteed pension benefits from their employers, and many will have to rely on a mixture of savings and Medicare benefits to help them enjoy a long and healthy retirement.

What’s more, longevity rates are at an all-time high for Americans. Many of those retiring today could conceivably live into their late 90s (or beyond), making their financial plans and a positive credit score all the more important to long-term happiness.

The Boomer Debt Burden

Today’s boomer-aged retirees are also leaving the workforce under different circumstances than their parents. According to data from credit bureau TransUnion, the average baby boomer has amassed $100,000 in debt, leaving many questioning whether they can afford to fully retire or if they will have to continue working into their golden years.

The reality of long-term financial issues, even at retirement age, makes it all the more important for those in their late 50s or mid-60s to keep on top of their credit situation.

The uncertainty about retirement-age financial plans means that more older folks will have to consider loans, credit cards, and other financial vehicles to help them cope with the loss of a regular paycheck.

And while it might be nice to think that creditors or banks might be willing to cut a retiree some slack when it comes to paying bills on time, just a few late (or entirely missed) payments can cause a serious impact on your credit score.

As a result, you might face higher interest rates on cards or be denied loan privileges. Poor credit can also impact your ability to get a second mortgage or to pursue the increasingly popular reverse mortgage as a means to help subsidize medical or other senior-living costs.

It Pays to Keep on Top of Your Credit

Experts suggest that retirement-age folks do what the rest of the working public should be doing. That is, paying much more attention to their credit reports and engaging in financial behavior that helps build, not burden, your overall credit picture.

The good news is that it is not impossible to keep on top of your credit situation, though it takes a little bit of extra dedication. Maybe a little extra time on your hands can help, if iyou can examine your purchases and other details in your credit reports and your financial statements.

The three major credit bureaus, as well as many banks and credit cards, now make it easy to get free copies of your monthly credit report. They will let you know what your credit score is and can alert you to any changes, credit inquiries, or changes that might cause a drop in your credit score.

You may want to consider a professional service to help monitor your credit, which can be helpful in spotting erroneous items, or tracking inquiries that have all the tell-tale signs of identity theft.

Don’t Chop Up the Cards

More and more seniors face the same quandary as their younger working peers: How to drive down their personal debt while also maintaining their credit power.

It can be tempting to go to the old standby in do-it-yourself credit repair – chopping up your credit cards – as a way of forcing yourself to make better financial decisions, but that route may not be the best, especially if you have limited resources in retirement.

Your credit score is generated by a number of factors, with almost a third of the value generated by your overall credit utilization. Consumers should try to use less than 30 percent of their available credit, though people often think this suggestion applies to only the credit limit on any particular card.

In fact, credit utilization looks at all of your credit resources, the pooled potential of your credit cards and lines of credit. That’s also measured against your ability to handle other existing debts such as automobile loans, mortgage payments, and outstanding student loan payments. Your mix of credit usage is also a factor.

Cutting up a card means eliminating that extra credit float and shifting the burden onto a smaller available body of credit.

Credit agencies also give credit score points to the longevity of an account, so closing a card, especially one yo have had and kept in good standing for many years, can also produce an accidental negative.

Maintaining a Healthy Credit Picture

Like any other consumer, retirees and pre-retirees are wise to do their best to keep on top of their credit obligations, as payment history is yet another significant factor in retaining a positive credit score.

Paying your bills on time, every time, is key to keeping creditors happy. And checking your credit report on a regular basis can help you know if you’ve accidentally missed a payment or if a creditor has said you have done so, as a billing mistake on their part. Learning to pay bills online or even via a smartphone is also an important skill to develop, and a valuable one even for seniors.

Modern retirement is certainly not always the riding-bicycles-on-the-beach utopia we see in retirement investment companies’ ads, but it doesn’t have to be a financial nightmare, either. By keeping a closer look at your credit score and your use of the credit you have, you’ll have better opportunities to access financial help if you need to do so.

How can I fix my credit? We can help, with an array of professional resources designed to assist you in better understanding and improving your score.

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