Holiday Tips For Credit Card Safety

Credit Card SafetyAlmost one-third of users experience credit card fraud and in 2010 close to 11 million adults experienced identity theft, with 43 percent of reported theft linked to credit card fraud. As of 2010, estimated showed that 11.1 million adults are victims of identity theft each year.

Those are staggering numbers and are the reason that credit card safety is an ongoing necessity for all of us. During holiday season even greater vigilance is necessary for many obvious reasons. Most security actions fall into the common sense group, but with busy lives we often end up tasking without adding a good dose of forethought.

Following are my top ten list of easy, fast habits anyone can build to support credit/debit card security.

    1. Never write down your PIN number and make sure to cover the keypad when entering on any machine. For added secure, do not use a PIN number tied to personally identifiable information. A quick Google search with your name may shock you about your personal data floating around on the web.
    2. Sign the back of your card upon receiving it and destroy old cards immediately. Scissor through the name line and account number. Scrap away the bar code with the scissor blade. Even better, use a home shredder to completely destroy cards.
    3. Review receipts, both ATM and store, to make sure the figures are accurate.
    4. Destroy receipts as soon as possible. I tear ATM receipts into small bits immediately upon verification. Credit receipts are matched to statements online and then shredded.
    5. The only time to give card information over the phone is when you’ve made the call and know the vendor is reputable. Short of this, don’t use the phone for dispensing card information.
    6. Avoid public computers and unsecured networks for all financial transactions, including account balance checks. Online purchases are fast, convenient and a major part of our shopping experiences. However, use only a private-secured connection. Look for the HTTPS//: and closed padlock icon in the address bar.
    7. Never leave a card unattended. It belongs in your hand, wallet or purse. A teller should not take your card to a machine. If so, request to go with the clerk or have the machine brought to you. Unattended includes a card left in the car, hotel room or any place someone can easily access.
    8. Check for skimmers when using ATMs, self-checkout lanes, and swipe pads. A stand-alone swipe pad attached by cable is a red flag for a skimmer.
    9. The new RFID chip cards bring added security using a radio transmitter to send client data, but also need special caution by the user. RFID is easily susceptible to someone with a hand-held reader standing close enough to steal card information. Reportedly, some people have been able to steal card data with a cell phone app. Take added care by using Tyvek sleeves or RFID wallets that can block radio signals
    10. Carry only a few cards or better yet one. People tend to have multiple cards, but should carry only those used – be selective.

Increased card use provides greater chance for credit fraud leading to a disappointing way to start the new year. Be on your guard through the holidays and use these tips when you use a credit card.

How to Get Finance With Unusual Employment

Get Finance With Unusual EmploymentAn increasing number of people are choosing flexible working opportunities with their employers, as it enables them to successfully combine both their lifestyle arrangements and their family commitments.

However, many have found that when it comes to visiting their local bank branches while looking for a home loan, car and truck loan or even equipment finance, their local bank is still apprehensive towards them. And, it is because of their irregular working hours:

1. They don’t seem to fit into the strict lending guidelines set out by banks; and

2. They are not seen by banks as holding down a stable job with a regular income.

What the Common Unusual Employment Types?

Here are some of the common unusual employment types:

1. PAYG (pay-as- you- go) contractors

2. Casual workers

3. Part-time workers

4. Self-employed individuals

5. Sub-contractors

6. People with other forms of income

Type 1 – PAYG Contractors

PAYG contractors are normally employed via an agency or directly via their employer. This form of employment is now common in a variety of fields such as:

>> Medical;

>> Engineering;

>> IT (Information Technology);

>> Mining;

>> Project Management;

>> Construction; and

>> Government.

So, if you are a PAYG contractor and you are looking for finance, here is a list of things that lenders/credit providers will require you to provide:

1. You will be required to provide a copy of your most recent “Employment Contract”, with income details listed;

2. You will need to provide evidence that you have a minimum of 12 months employment in the same industry and that you have a good track record in your chosen industry; and

3. You will need to provide evidence that your employer or employment agency takes care of your income tax and superannuation contributions for you.

Note: If you are not on the direct payroll of an employer or employment agency, you may be treated as being self-employed.

Type 2 – Casual Workers

This type of employment applies to people working on a casual basis in the following industries:

1. Restaurants;

2. Retail;

3. Teaching and Tutoring;

4. Nursing;

5. Childcare;

6. Trades;

7. Drivers; and

8. Cleaning.

If you are a casual employee, you will need to provide evidence that you have been employed at the same place for at least 6 months.

Lenders/credit providers will calculate your average earnings over a set period, and count this as your income. However, if you want to work out your own average earnings, then you can use an income annualisation calculator to calculate your own average earnings.

Type 3 – Part-Time Employees

If you are employed on a part-time basis, you will find that lenders/credit providers will generally require you to:

1. Provide evidence that you have been employed at your current place of employment for at least 6 months: and

2. Provide copies of the following documents:

>> Current computerised pay-slip covering a minimum of two (2) pay cycles in order to confirm details of your base income; and

>> PAYG Summaries; or

>> A signed letter of employment from your employer listing details of your current base-remuneration.

Type 4 – Self-Employed Individuals

You are self-employed if you run your own business. You are categorised as self-employed individual even when you are conducting freelance work as a journalist, photographer, tour guide, etc. In such a situation, you will find that most lenders/credit providers will require you to provide evidence that you have a regular income to sustain a loan. This includes providing evidence that:

1. You are a business owner or partner;

2. You have been trading in your current business for at least 24 months;

3. Your business provides a steady income; and

4. You will be required to provide copies of:

>> Your most recent Personal and Business Income Tax Returns, and

>> One set of the business financial statements, reflecting two (2) years trading activity

Note: If you conduct freelance work with an employer, you may find that lenders/credit providers may require you to provide a copy of the written agreement between you and the employer that outlines your pay and conditions.

Type 5 – Sub-Contractors

Sub-contractors have specialized skills and they are generally employed by a primary contractor to provide specialized services in a variety of fields such as:

1. Building and Construction;

2. Mining;

3. Civil Engineering; and

4. IT (Information Technology).

Note: Many sub-contractors have little to no overheads and no staff and most are typically self-employed. In a sense they are similar to PAYG contractors.

Type 6 – Other Forms of Income

If you receive any other form of income and you are unsure if it is acceptable to lenders/credit providers, you should seek help from a qualified and licensed finance broker or a mortgage broker. You can even seek financial and legal advice from your accountant and solicitor. These other forms of income can include:

1. Centrelink payments;

2. Commissions and Bonuses income;

3. Trust Distributions income;

4. Car Allowances;

5. Annuity Income from Superannuation;

6. Director’s fees;

7. Second Job income;

8. Investment income (i.e. Dividends received from publicly listed companies); or

9. Court Ordered Maintenance payments.

Seek Expert and Professional Advice

If you still have doubts regarding your employment status and want to obtain finance, you can seek help of a finance broker. You should opt for a professional qualified finance broker because he/she will have experience of dealing with many lenders/credit providers on a regular daily basis. Also, he/she will be familiar with the lending guidelines and credit policy requirements of a number of lenders/credit providers.

Common Mistakes That Can Destroy Your Credit Score

bounced chequeA BOUNCED CHEQUE

A bounced cheque is one of those reports that will never show up on the traditional credit report. This however, does not make its potential implications on your credit score any insignificant. While your bank may not list your bounced cheque case with the credit bureau, you might still find the record listed due to a bounced cheque that was taken up by a collection agency, civil or criminal charges against you owing to it or writing it to a company which reports to the credit bureau.

The bank may also list you on their ChexSystem which means your ability to open a checking account with another bank is not only limited for some years duration but also your credit limit is reduced.

FREQUENT APPLICATION OF NEW CREDIT CARDS

Anytime you apply for a credit card or a loan, the lender performs an analysis known as the ‘Hard Credit’ inquiry which seeks to review your credit score profile. This exercise will determine your FICO credit score to a tune of 10% and the score sticks to your credit report for a period of two years.

Frequent application of new credit cards also insinuates you are a financial risk to the lender. Statistical analysis has proved that having numerous new credit cards in a short time span is a bad indicator of an individual’s financial responsibility hence it causes a drop on their FICO score.

DELAYED PAYMENTS

Delayed payments are characteristic in high risk debtors due to unreliability. With your payment history accounting for 35% of your credit rating, you run the risk of having your bank sell you out to the collection agencies or notify your late payment to the credit bureaus. Both of these have a negative effect on your credit rating especially if the delay exceeds 30 days. This period will however vary from one institution to the other.

A singe late payment may soil your previously good credit rating, though this takes into consideration the severity of the delay, its frequency, and current credit score and how recent it occurred. This might be avoided where you reach out to your lender for a compromise in payment method in cases where some personal issue has arisen making your prior arrangement hard to comply with.

CO-SIGNING FOR FRIENDS AND FAMILY

Before endorsing friends and family for a loan, you may need to consider its effect on your credit rating. Co-signing for a credit with a very high balance could affect your utilization ratio, consequently causing a drop in your credit score.

As a guarantor, you take up the responsibility of ensuring full settlement of the loan by the borrower in accordance to the stated terms. A default or inconsistent loan servicing by the borrower lowers your credit score.

 

How to Repair Credit On Your Own

Repair Credit On Your OwnThe following are some tips that can help individuals to repair credit on their own:

Request a 3-Bureau Credit Report

The first tip is to request a full credit report to check exactly where you stand. Everyone is entitled to one free credit report a year from the 3-major credit bureaus, which are Equifax, TransUnion and Experian. The credit report does not have the credit score, but there are companies that can help you calculate it. The credit score ranges between 300 and 840, and a credit score of 740 is considered fine. A credit score of less than 600 is not so good, and may attract higher interest rates if you ever try to get a loan. Knowing where you stand helps you create a plan to recover your financial footing.

Check for Errors

Analyze the credit report to check for any errors. If you find that there is any discrepancy, such as credit cards you do not own or major purchases you did not make, record the error and dispute it. To do this, you need to highlight the error, gather all supporting documents and send this information with a written letter to the credit bureau that reported the false information.

Create a Budget

You need to create a budget to take charge of your financial situation. Budgets can help you live within your means and not spend more than you earn. Budgets can also help you pay your debts and your bills on time. Paying bills on time can significantly improve your credit score. If you have to, setup payment reminders to remind you to clear your bills on time. It is also important for you to reduce the debt on your credit cards, but you should not cancel these cards.

Resist the Temptation

Finally, individuals should resist the temptation to take new credit cards, as these can negatively impact their credit score. Applying for too many credit cards within a short period of time can significantly impact a person’s credit rating. Even in future, after clearing your debts, only apply for new credit cards when you really need to.

Repairing a credit score can take months, or even years, depending on how bad the damage was. Never fall for scams from people who claim to repair credit scores overnight. If you are having difficulties with any of these tips, or you need a guiding hand to help you stick to your goal, you can hire the services of a professional credit repair company.