The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Lawâs editorial disclosure […]
Source: lexingtonlaw.com
The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Lawâs editorial disclosure […]
Source: lexingtonlaw.com
If youâre looking to repair your credit, you may have come across websites that advertise a credit privacy number, credit protection number or CPN. These numbers are nine digits like a Social Security number (SSN), and sellers claim that you can use them instead of your SSN. However, these CPNs are often actual SSNs lifted from real people, reportedly children, prison inmates and the deceased â and you can never legally buy a new SSN. In other words, a CPN is no solution to your credit rating problem. Under no circumstances should you try to buy a CPN.
Why a CPN is No Credit Fix
Websites have sprung up all over the internet, offering CPNs to people with bad credit or low credit scores. They advertise that this number can serve as a âget out of jail freeâ card for your bad credit. In theory, you can use a CPN instead of your SSN on credit applications to hide the poor credit associated with your personal SSN. If you have bad credit but still need a credit card or loan, this can seem like the solution, assuming you can pay anywhere from hundreds to thousands of dollars.
That price might seem worth it for a chance to wipe the slate clean. However, these offers are essentially a big scam. The CPNs you can buy online are not legally assigned credit protection numbers. Instead, they are usually stolen Social Security numbers, taken from children, the deceased or inmates.
Also, using a purchased CPN puts you in some hot water, too. Credit agencies can easily spot discrepancies if you try to use a CPN on an application instead of your SSN. Not only will this fail to help your credit, but itâs also committing fraud which is punishable by jail time.
How to Avoid CPN Scams
If youâre dealing with some bad credit, donât turn to a CPN. Only scammers sell CPNs, and they in turn may cheat you out of your personal information as well as hundreds or thousands of dollars. Using a purchased CPN can also put you in jail, even if you didnât know the number was fraudulent. This is why itâs important to be aware of this popular scam.
If you really need a CPN or new SSN, it will be free. The process will go through the Social Security Administration Office, since a new number would be tied to your old SSN. That said, it is very hard to qualify to receive a new number. Having bad credit is never a qualifying reason.
How to Get a Legal CPN
With so many fraudulent websites and companies trying to sell you a way to reset your credit, itâs hard to know how to get a legal CPN. Unfortunately, thereâs a lot of misinformation out there. Some experts say that you can speak with an attorney to obtain a legal CPN. The attorney can then contact the Social Security Administration Office on your behalf. However, others maintain that all CPNs are illegal.
Generally, it seems that you cannot get a legal CPN unless you actually need one. These situations include celebrities, government officials and people under witness protection. You can also apply in other specific instances, like if youâre a victim of abuse, stalking or identity theft. A real CPN would be attached to your SSN, so itâs still not an escape from the credit tied to your SSN.
You may also stumble upon offers to obtain an EIN, or Employer Identification Number. The IRS does issue EINs, but only businesses can use them for business costs. This means that you cannot legally obtain an EIN as an individual looking to improve your credit. You also cannot make up a home business, apply for an EIN and use that new number for a credit reset. It is a federal crime to obtain an EIN under false pretenses. In any case, the credit profile for your EIN is still tied to your SSN.
Bottom Line
You shouldnât ever, under any circumstances, try to purchase a CPN. These offers are fraudulent and donât provide any credit repair or relief. At the very least, buying a CPN wastes money you should put towards repaying your loans in the first place. At worst, you could go to jail for fraud. There are better, more constructive ways to repair your credit. If youâre truly in a situation that calls for a CPN, contact your lawyer for assistance.
Tips on Rebuilding Your Credit
Photo credit: ©iStock.com/becon, ©iStock.com/Xesai, ©iStock.com/Kerkez
The post Why You Should Not Buy a Credit Privacy Number (CPN) appeared first on SmartAsset Blog.
Source: smartasset.com
In a recession itâs common for many people to rely on credit cards and loans to balance their finances. Itâs the ultimate catch-22 since, during a recession, these financial products can be even harder to qualify for.
This holds true, according to historical data from the Federal Reserve Bank of St. Louis. It found that during the 2007 recession, loan growth at traditional banks decreased and remained deflated over the next four years.Â
Credit can be a powerful tool to help you make ends meet and keep moving forward financially. Hereâs what you can do if youâre struggling to access credit during a weak economy.
Giving someone a loan or approving them for a credit card carries a certain amount of risk for a lender. After all, thereâs a chance you could stop making payments and the lender could lose all the funds you borrowed, especially with unsecured loans.
For lenders, this concept is called, âdelinquencyâ. Theyâre constantly trying to get their delinquency rate lower; in a booming economy, the delinquency rate at commercial banks is usually under 2%.
Lending becomes riskier in a weak economy. There are all sorts of reasons a person might stop paying their loan or credit card bills. You might lose your job, or unexpected medical bills might demand more of your budget. Because lenders know the chances of anyone becoming delinquent are much higher in a weak economy, they tend to restrict their lending criteria so theyâre only serving the lowest-risk borrowers. That can leave people with poor credit in a tough financial position.
Before approving you for a loan, lenders typically look at criteria such as:
Does this mean youâre completely out of luck if you have bad credit? Not necessarily, but you might need to take the time to understand all of your alternatives.
Although every lender has different approval criteria, these strategies speak to typical commonalities across most lenders.
Paying off some of your debt might feel bold, but it can be helpful when it comes to an application for credit. Repaying your debt reduces your debt-to-income ratio, typically an important metric lenders look at for loans such as a mortgage. Also, paying off debt could help improve your credit utilization ratio, which is a measure of how much available credit youâre currently using right now. If youâre using most of the credit thatâs available to you, that could indicate you donât have enough cash on hand.
Not sure what debt-to-income ratio to aim for? The Consumer Financial Protection Bureau suggests keeping yours no higher than 43%.
For those with poor credit, a trusted cosigner can make the difference between getting approved for credit or starting back at square one.
When someone cosigns for your loan theyâll need to provide information on their income, employment and credit score â as if they were applying for the loan on their own. Ideally, their credit score and income should be higher than yours. This gives your lender enough confidence to write the loan knowing that, if you canât make your payments, your cosigner is liable for the bill.
Since your cosigner is legally responsible for your debt, their credit is negatively impacted if you stop making payments. For this reason, many people are wary of cosigning.
In a recession, it might be difficult to find someone with enough financial stability to cosign for you. If you go this route, have a candid conversation with your prospective cosigner in advance about expectations in the worst-case scenario.
If your credit score just isnât high enough to qualify for conventional credit you could take some time to focus on improving it. Raising your credit score might sound daunting, but itâs definitely possible.Â
Here are some strategies you can pursue:
Raising your credit isnât an immediate solution â itâs not going to help you get a loan or qualify for a credit card tomorrow. However, making these changes now can start to add up over time.
Although traditional banks can be strict with their lending policies, some smaller lenders or credit unions offer some flexibility. For example, credit unions are authorized to provide Payday Loan Alternatives (PALs). These are small-dollar, short-term loans available to borrowers whoâve been a member of qualifying credit unions for at least a month.
Some online lenders might also have more relaxed criteria for writing loans in a weak economy. However, you should remember that if you have bad credit youâre likely considered a riskier applicant, which means a higher interest rate. Before signing for a line of credit, compare several lenders on the basis of your quoted APR â which includes any fees like an origination fee, your loanâs term, and any additional fees, such as late fees.
If youâre trying to apply for a mortgage or auto loan, increasing your down payment could help if youâre having a tough time getting approved.
When you increase your down payment, you essentially decrease the size of your loan, and lower the lenderâs risk. If you donât have enough cash on hand to increase your down payment, this might mean opting for a less expensive car or home so that the lump sum down payment that you have covers a greater proportion of the purchase cost.
Not all types of credit are created equal. Personal loans are considered installment credit and are repaid in fixed payments over a set period of time. Credit cards are considered revolving credit, you can keep borrowing to your approved limit as long as you make your minimum payments.
When it comes to credit approvals, one benefit loans have over credit cards is that you might be able to get a secured loan. A secured loan means the lender has some piece of collateral they can recover from you should you stop making payments.
The collateral could be your home, car or other valuable asset, like jewelry or equipment. Having that security might give the lender more flexibility in some situations because they know that, in the worst case scenario, they could sell the collateral item to recover their loss.
Borrowing during a financial downturn can be difficult and it might not always be the answer to your situation. Adding to your debt load in a weak economy is a risk. For example, you could unexpectedly lose your job and not be able to pay your bills. Having an added monthly debt payment in your budget can add another challenge to your financial situation.
However, if you can afford to borrow funds during an economic recession, reduced interest rates in these situations can lessen the overall cost of borrowing.
These tips can help tidy your finances so youâre a more attractive borrower to lenders. Thereâs no guarantee your application will be accepted, but improving your finances now gives you a greater borrowing advantage in the future.
The post How to Get Approved for Credit in a Financial Downturn appeared first on Good Financial Cents®.
Source: goodfinancialcents.com
Your credit score can have a huge impact on your lifeâfor better or worse. In many ways, the three major credit bureaus are the keepers of your credit score. Theyâre responsible for maintaining credit reports, which means you may need to contact them about the information included on yours. While this may seem daunting, it’s really not complicated.
Read on to learn about when to contact a credit bureau and how to do it. Contact information and tips have been provided for each of the three credit bureausâExperian, Equifax and TransUnionâto make it as simple as possible.
Anytime you notice inaccuracies on your credit report, you should immediately contact the credit bureau. This can include misspelled names, incorrect address information, unreported salary changes or erroneous employment information.
Here are some other reasons why you might need to contact a credit bureau:
For help talking to the credit bureaus and starting a credit repair plan, you can work with a professional credit repair agency. They offer credit monitoring, credit repair services and text alerts so you don’t miss a thing.
You want to have the right information on hand when you call a credit bureau. Prepare yourself by collecting the following information in advance, just in case:
Because there are so many potential reasons to contact a credit bureauâgeneral inquiries, disputes and credit freezes, for exampleâthere are many different phone numbers and online contact forms to wade through. If you call the wrong number, you may simply be told they cannot help you and directed to call a different number, wasting precious time and energy.
To help you avoid that frustration, weâve gathered several ways you can contact the credit bureaus for common inquiries here.
Reason to Contact |
Phone Number |
Availability |
General inquiries |
866-640-2273 |
|
Service cancellation |
866-243-8181 |
8 a.m. to 3 a.m. (ET) |
Request a copy of your credit report |
866-349-5191 |
8 a.m. to midnight (ET) |
Fraud alert |
800-525-6285 |
8 a.m. to midnight (ET) |
Credit dispute |
866-349-5191 |
8 a.m. to midnight (ET) |
Credit freeze |
888-298-0045 |
8 a.m. to midnight (ET) |
2017 data breach |
888-548-7878 |
8 a.m. to midnight (ET) |
Opt out of mailing lists |
888-567-8688
|
|
If you donât like talking on the phone, Equifax also offers live chat support. You can chat with a member of their customer support team between 8 a.m. and midnight (ET), Monday through Friday.
Reason to Contact |
Phone Number |
Availability |
General inquiries |
833-395-6938 |
8 a.m. to 11 p.m. (ET) |
Credit dispute |
833-395-6941 |
8 a.m to 11:00 p.m. (ET) MondayâFriday |
Credit freeze |
888-909-8872 |
8 a.m. to 11 p.m. (ET) |
Fraud alert |
800-680-7289 |
8 a.m.to 11 p.m. (ET) |
Free annual report |
877-322-8228 |
|
Havenât received your report |
800-888-4213 |
|
Manage your subscription |
833-806-1626 |
8 a.m. to 9 p.m. (ET) MondayâFriday
8 a.m. to 5 p.m. (ET) |
Technical support |
833-806-1626 |
8 a.m. to 9 pm. (ET) MondayâFriday 8 a.m. to 5 p.m. (ET) |
Reason to Contact |
Phone Number |
Availability |
Experian membership |
479-343-6239 |
6 a.m. to 8 p.m. (PT) 8 a.m. to 5 p.m. (PT) |
Free credit report |
888-397-3742 |
|
Credit dispute |
866-200-6020 |
|
Fraud alert |
888-397-3742 |
|
Credit freeze |
888-397-3742 |
|
Cancel membership |
479-343-6239 |
|
ProtectMyID subscription |
866-960-6943 |
|
Opt out of prescreened offers |
888-567-8688 |
|
Not all experts think calling a credit bureau is the best approach. Don Petersen, an attorney at Howard Lewis & Peterson, PC, in Utah, recommends calling a bureau for only basic administrative questionsâsuch as updating an address or asking if a recent data breach has affected you.
For most other issues, Petersen advises his clients to write to credit bureaus or submit disputes online. This provides you with an official record of your request.
If you do prefer to call a credit bureau, take notes during the call and follow up in writing after the telephone conversation. In your follow-up letter, you should include the name of the representative you spoke with as well as details of what transpired in your conversation.
Send important requestsâespecially disputesâthrough certified mail. This allows you to track the letter and ensure that the credit bureau responds in a timely manner. Never send original copies of documents, as the bureaus may not return anything you send.
Reason for Contact |
Address |
Credit dispute |
Equifax Information Services LLC |
Request a copy of your credit report |
Equifax Disclosure Department |
Fraud alert |
Equifax Information Services LLC |
Credit freeze |
Equifax Information Services LLC |
Reason to Contact |
Address |
Credit freeze |
TransUnion |
Credit dispute |
TransUnion Consumer Solutions |
Fraud alert |
TransUnion Fraud Victim Assistance |
Request credit report |
TransUnion LLC |
Reason to Contact |
Address |
Credit dispute |
Experian Dispute Department |
Credit freeze |
Experian Security Freeze |
Privacy |
Chief Privacy Officer |
Report a relativeâs death |
Experian |
Under the Fair Credit Reporting Act, you have the right to obtain a free copy of all three reports once each year. These free reports can be accessed on the government-mandated site operated by the big three credit bureaus, AnnualCreditReport.com.
You can also sign up for the free credit report card offered by Credit.com, which provides a snapshot of your credit as well as the ability to dig deeper into the elements that affect your credit score. When you sign up, youâll also get regular emails with tips and tricks for keeping your credit healthy.
The post How and When to Talk to a Credit Bureau appeared first on Credit.com.
Source: credit.com