Protecting your credit score

Credit scores are important to determine your chances to be approved for a loan, credit card, an apartment, and even a job. It is important to take steps toward protecting your credit score. Credit fraud and identity theft are on the rise and it is more important than ever for consumers to protect their credit score. You need to order your credit report and score at least once a year to check it for errors and for identity theft.

According to TransUnion, the most popular types of credit fraud include the following:

• Theft of employee records
  
• Credit card skimming
  
• Mail fraud
  
• Lost wallet
  
• Improper disposal of credit card information and old credit cards
  
• Hacking into company web sites and personal computers
  
• Misrepresentation of known companies, such as fake web sites and phone calls
  
• Domestic abuse

The internet is a great way to pay your bills and to access your bank accounts and credit reports, but it is also a great way for hackers to get into your personal life and steal your identity. Companies have taken steps toward protecting their customers by creating secured web sites and tracking down hackers that steal identities and other information. Most web sites with protection are secure, however even with all the security measures; you may still lose your identity.

There are several things you can do to protect your credit score. First, you need to keep all your personal information in a locked cabinet or secure area in your home. Never save your passwords on your computer, especially on a public computer. If you establish passwords for bank accounts and credit card accounts, use a password that is difficult for others to guess. Mixing numbers and letters is one of the best ways you can protect your accounts from being accessed by a thief. Always use passwords that do not relate to your name, your spouses name, children's names, and animals names because these are easy for hackers to identify.

Second, never give your social security number to someone that calls you over the phone and you should never email it to anyone. Always be careful about who you are giving your social security number to. If you are suspicious about a web site that is asking for your social security number, contact the Better Business Bureau to see if it is a valid web site. A good rule is to only give your social security number to companies that you initiate contact with. Avoid putting your social security card in your wallet and ask for it to be removed from your driver's license. Ask for the number to be blocked out of all the application forms you sign before they filed, as this can protect you from thieves inside the company. You should also shred all documents that you plan to throw away if they have your social security number on it or any other identifying documentation. Do not print your social security number on your checks or on paperwork that you are mailing.

Third, destroy all paperwork that has your personal information on it. If you have saved your credit card statements and you can now access them online, shred the old ones or consider burning them the next time you are out camping. Destroying old paperwork will prevent thieves from stealing your personal information that can be found in the garbage. Identity thieves often dig through trash bags in search of paperwork with identifying information.

Fourth, always review your credit card statements and bank account statements. Make sure there are not charges on your statements that you did not approve. Most credit card companies offer account protection and they will contact you if they suspect a charge on your account that was not made by you. If you want to dispute a charge on your account, contact your credit card company for more information.

Fifth, keep a list of all your credit card numbers, expiration dates, and telephone numbers for the credit card companies. If your wallet is stolen, you will know exactly which companies to call and report the credit cards that have been stolen. Keep this list in a safe place where you can access it in case your home is broken into or if your wallet is stolen. The sooner you report a stolen card, the quicker the credit card companies can work with the police to find the individual that stole your credit card.

Sixth, never give your credit card information via email. You should only input your credit card information into secured web sites and these must be companies and web sites that you trust. Phishing emails are common and unfortunately many trusting individuals give their credit card information to these thieves because they think they are from their bank or another trusted organization. The emails normally inform customers that they need to update their personal and financial information and they will provide a link for customers to click on to input their information. Clicking on the link in the email can also cause logging software to be installed on your computer and hackers will have access to all your passwords, user IDs, PIN numbers, and other personal information. Instead of clicking on the link, open a new web browser and go to the web site of the company directly. This way you can see if you have any messages about updating your information. You should also call your bank or credit card company to see if they sent the email. Most banks and credit card companies will not send you an email if they need to update your personal information.

One of the best ways to protect your credit score is to subscribe to a credit monitoring service. These companies charge a monthly fee, usually $9.99 or more to check your credit report for suspicious activity. If someone applies for credit in your name, you will be notified immediately. Credit monitoring companies also provide you with daily alerts to any changes to your credit score or credit report. If your credit score raises or lowers, you will be notified. This can help you keep track of your debts and work towards improving your credit rating. Search for a credit monitoring company that sends you real time reminders if there is a change to your credit report. You can also enroll in account protection with your credit card companies. The account protection will cause credit card companies to monitor your credit card closely and contact you if they feel a charge is fraudulent. The account protection will help you protect your credit score, but it will also protect you from paying penalty charges and from paying for the stolen goods charges.

If you use your computer to access your credit cards, bank accounts, and other web sites, you need to have anti-virus software installed on your computer. The antivirus software will protect your computer from being infected by computer programs that are designed to capture your personal information and they also protect your computer from being destroyed by hackers that infect your computer with viruses. Run a virus scan everyday and keep a high level of protection on your internet settings. Only click on the pop-ups from the web sites you trust.

Other things you can do to protect your credit score include: paying your bills on time, reducing the number of authorized users on your credit card, avoiding using too much of your credit amount, and correcting errors. Lenders want to give money to people that have excellent credit and you can obtain this by having a stellar payment record. Always pay your bills on-time or early to show lenders that you are a good borrower. Try to avoid applying for credit often, only have about 6 inquiries on your credit report each year. The more inquiries you have on your credit report, the lower your credit score.

Do not leave small, unpaid debts behind. Always pay every debt you get, even the parking tickets. Small unpaid debts will eventually show up on your credit report and they can significantly hurt your credit score. Collection agencies are usually the companies you will need to deal with if you have unpaid debts and they can cause your credit score to drop by 50-200 points.

You should also avoid opening too many credit card accounts. The more accounts you have open, the easier it is for identity thieves to find you and start using the cards. Only carry 1-3 open credit card accounts. Even though you may be tempted to open more, ask yourself if you really need them and if you can control your spending. You also need to look at the authorized users you have on the credit card. You may place your children on the card and instruct them to use it for emergencies. These "emergencies" can quickly add up and if you are unable to pay off the balance at the end of the month, you could hurt your credit score.

Another thing you need to avoid doing to help protect your credit score is to avoid changing your name often. People that change their name more than once are targets for identity theft. Simply dropping a middle initial can leave a separate file open for identity theft to occur. To prevent identity theft, notify the credit bureaus that you are the same person and that you changed your name.