Spring Clean Your Credit Cards
March 29, 2006
Did you know that fraudsters can get information on your unused accounts and start spending freely without you knowing about it? Often when people want to stop using a credit card, they just toss it in a drawer or cut it up. But those accounts are still live unless you call the company and ask to canel the account.
That means a person trying to steal your credit can find the information and use the card, even if you haven’t used it for a long time. Cards are typically valid for several years and often automatically renew, though new cards must be activated in order to charge the account. Some cards, especially individual store cards, don’t have expiration dates, which means someone could wrack up sales on a card you literally haven’t used for years.
If you have accounts you’ve stopped using, spring is a fine time to clean out your accounts. If you still have the cards you are no longer using, call the number on the back and ask to cancel the account. If you don’t have the card any more, or you aren’t sure if an account was formally closed, get a copy of your credit report. It will show all the accounts you have open. This will not give you the full account numbers, but the last four digits will appear.
Then you can write the companies in question and ask that your accounts be closed.
While you’ve got your credit report in front of you, look at the debt you are carrying and what the interest rates are. See if you can find a lower rate card to transfer your debts to, and make an effort this year to pay more than the minimum every month. And when the debt is paid, remember to close the account!
Credit Agencies to use VantageScore
March 16, 2006
Equifax, Experian and TransUnion have joined forces and “created a new credit scoring system aimed at simplifying the loan process for both lenders and borrowers,” according to AP Business Writer Eileen Alt Powell. Traditionally, each agency used its own proprietary formula to create scores.
The new system, called VantageScore, will provide “greater consistency and predictability to consumers and credit grantors.” Here’s a breakdown of the new scoring system, which is based on the academic scale:
- A — 901-990
- B — 801-900
- C — 701-800
- D — 601-700
- F — 501-600
The new scores are available immediately for financial institutions, but won’t be rolled out for consumers until later this year.
