Fixing the problem can be a long and exhausting process. Due to the escalation of identity theft there is a Fair and Accurate Credit Transactions Act (FACTA) that requires the credit bureaus to remove the contested information from your credit reports while the problems are being investigated.

Prevention is the best way to fight identity theft. Here are 5 ways you can do so.

#1. Write, “ask for signature” on the signature line of your credit cards. This will require the store clerks to check for your signature on your driver’s license.

#2. If you do not have a secure mailbox, one that must be accessed with a key, go to the post office and get a P.O. Box. The same goes for your outgoing mail. Never place it in a non secure mailbox.

#3. Never carry your social security number with you. It is better to memorize the number. In addition, never give the number out unless you absolutely have to. If you are asked to give it out, make sure you understand why it is needed and if it is possible to avoid doing so. For instance, health clinics may request this information, however, it is only a formality and in many cases it is not required.

#4. Buy a paper shredder. Shred all documents that may allow someone to acquire more information about your identity. You should shred all invoices from credit companies and anything else that has account numbers that you don’t want anyone else to have. Paper shredders are not that expensive. It is well worth it to take the time to shred documents that could allow someone to steal your identity.

#5. A highly effective way to prevent someone from obtaining your credit report from the credit bureaus is to request each bureau to place a fraud alert on your account. Every time someone requests a credit report on your account, the credit bureaus are required to call you. The good news is, you also will obtain a free credit report. The bad news is, you will no longer receive instant approval regarding any applications for credit.

In addition to taking steps in preventing identity theft, did you know that once you report any credit card missing or stolen or if you report the card missing or stolen within 2 days, you are not liable for any transactions that are made on that card. If you report the card stolen or missing from three days to thirty days after it is stolen you can only be held responsible for $50.00.

Remember, prevention is the best solution to identity theft.

Credit Bureaus are a business. They are in it to make money. They are not run by the government. However, they must abide by specific laws and regulations that were formed to protect those of whom they gather information on. Credit bureaus are simply agencies that gather information that we allow them to access.

The truth is, we could keep all of our financial details private if we never applied for a loan or credit. In addition we would have to make sure that the bank where we kept our money did not report to the credit agencies.

Anytime we decide we would like to borrow money, the lender is allowed to share our financial status with the credit reporting agencies. This is something we agree to do when we apply for the loan or a credit line.

Although credit agencies are not run by any governmental system, they are in fact, under strict guidelines as to what they can and cannot report. In recent years, there have been many new laws that are extremely helpful to the credit consumers.

#2. You Can Start Over by Changing Your Social Security Number– FALSE

There are companies that claim they can totally wipe your slate clean by attempting to pull your credit file with a variation in your social security number or by using social security numbers from deceased individuals who have a similar birth date as yours. This is illegal, it is fraud, and you could be fined if you are caught.

If the request made returns stating there is currently “no record” for that social security number, these scam artists can begin building your new credit profile with it.

In addition they may try to use your Federal Employee Identification Number (FEIN) in place of your social security number.

Does it work? Sure. However, in addition to your brand new credit profile, you now have established another new profile. That would be one of a criminal nature. It is a Federal crime to misrepresent your social security number as well as trying use or obtain an FEIN for the purpose of establishing a new credit file.

It is also a crime to falsely represent yourself on any credit application.

#3. You Have No Control as to What is Reported in Your Credit Profile–FALSE

You absolutely have control over your credit report. Any information that cannot be proven to the credit bureau by a creditor must be removed. There are several ways you can improve your credit report. One way is to go directly to the credit bureaus and dispute the negative reports. Another way is to go directly to the creditors and negotiate with them.

What you dispute and how you negotiate is up to you. The point is, you CAN successfully create changes in your credit report on your own. It in only a matter of educating yourself as to what you can and cannot do.

One of the ways to reduce credit card debt is to lower the interest rates of your credit cards, but to continue making the same payments on those cards as you did before your rate reduction. This will enable you to pay down more on the principal balance of your credit cards.

How do you go about getting your creditors to reduce your credit card rates?
The first thing you need to do is find several credit card companies that offer a lower interest rate on balance transfers. You don’t have to apply for them- you just need to let your current creditors know they have some competition for your business.

Do your research and explore your options. Look for credit card companies online with the lower interest rates, make note of them so you can refer to them later. Now you will need to make a few phone calls. Call each of your creditors and tell them this, in your own words.

“Hello, I have the opportunity of reducing my credit card debt by transferring my balance to some of your competitors that are offering lower interest rates on balance transfers. For instance, _____________, _____________, and ______________, are offering ______ interest rate on balance transfers that is currently ________ percent lower than what I am receiving on this card. Would you be willing to give me this rate so I do not need to transfer my balance?”

You can change this script to reflect the information that you find.  The key factor is to do the research and then present it to each credit card company that you use currently. You may not be able to get every company to comply, but for every bank that does, you’ll see that reducing credit card debt is not as hard as you think.  You will also find that many credit card companies will waive their annual fee as well.  There is no need to pay for the privilege of having their credit card.

Once you’ve lowered your credit card interest rates, make sure you continue to pay more than the minimum payment required. This will help you to keep your goal of reducing your credit card debt.

If you cringe when the phone rings because you don’t know how to stop creditors from calling, take heart, there is a very simple solution. It’s legal and it works. There is federal legislation that protects a consumer’s rights to privacy and from harassment by debt collectors. When the collection agency’s attorneys call, our fear of legal action against us can make us feel as though we have to put up with these stressful calls.

Wouldn’t it be nice to stop creditors from calling? You’re already stressed because of your current financial situation. You don’t need to become unraveled each time the phone rings. It’s time to stop creditors from calling.

The first thing you need to get is the address of the collection agency. It won’t do you any good to write your creditor. Most creditors sell the account to a collection agency after a set amount of time. Then it becomes the collection agency that is calling you if your payments are three or four months overdue. If this is the case, you’ll need to make sure you have the address of the collection agency in order to stop them from calling.

This is probably the most difficult part of this solution. You’ll understand why as soon as you see what is it you need to do to stop creditors from calling.

Okay, are you ready? You won’t even have to take notes for this one. You don’t need to copy anything down or learn a tightly drafted phone script. All you need to do is write a letter telling each creditor that you do not want them to contact you by phone any longer.

Yep. That’s it. Oh, well, you might want to add that you don’t want them to call at work either, but all you really need to stop creditors from calling is to write to them and request that all further contact be made by mail.

Some people say to tell them you don’t want them to call any longer by phone. However, this is a waste of time as most creditors will argue with you and continue to harass you. The best way is to ask for the address of where you can send a payment, type your request and mail it ASAP. This is 100% effective.

You’re probably wondering why I say to ask for the address in order to send a payment. The reason is because collection agencies are very savvy to the laws. They know that if you mail them a letter requesting them to stop, they must comply. So, many times they will do everything they can to collect from you without giving up their physical address. They might ask for a post dated check or payment by phone. That’s it. You’re done!

Just so you know, collection agencies can call you if the status of your account changes. This includes letting you know that they are going to sue you. However, they cannot make this statement as a threat to collect a debt. This is illegal. Most creditors and collection agencies won’t sue for unsecured debts as it is not financially productive.

Stop creditors from calling by putting it in writing. Simple, easy, direct.

Fair Isaac was founded in 1959 for the purpose of improving business decisions. By acquiring a wide range of data and assigning that data certain values, the FICO scoring, would improve the ability to make more informed financial decisions.

Fair Isaac developed a software algorithm that the credit bureaus use for the purpose of creating your credit score. Basically, it is a formula that includes a lot of data about you that has a bearing on your financial status. This FICO score can be considered a standard rate of credit risk that lenders, retailers and so forth could use in order to lower their financial risk.

Using the FICO scoring as a guide, businesses can automate their decisions based on those scores. This has proven to be a profitable strategy as well as a financially devastating one. It just depends on which end of the FICO you are sitting.

The three credit bureaus use this software formula for credit scoring. However, each bureau is able to manipulate this formula. So, not all FICO scores are calculated the same.

For instance, let’s take a look at each credit bureau’s scoring range.

Equifax ranges from 300 to 850
Experian ranges from 340 to 830
TransUnion ranges from 150 to 934

Most credit lenders prefer to use Equifax or Experian rather than TransUnion due to the smaller range variants from these two credit bureaus. It may surprise you to know that there are other companies that offer credit scoring. They are hard to find and most of them are dying out.

Understanding your FICO score is not easy. One reason is because the three main reporting agencies do not all arrive at the same scoring conclusions. There are some things you cannot control within your score and some items that can be controlled.

There are five basic categories to every FICO score. Although there are many different elements that make up each category, understanding the basics can help you at least have some idea of what you’re dealing with. They are listed in order of importance.

#1. Your Financial Payment History

This is by far the most important part of your credit score. This category helps the lenders to see how you pay your bills. Do you pay on time, are there any late payments.

#2. Your Credit Debt Ratio

Creditors want to know how much you owe as well as how much credit you have access to. Unused credit cards can be helpful or harmful.

Unused credit is considered as potential debt. Creditors will add into your debt the total payments of all your credit cards when they are used in full.  The ratio creditors like to see varies depending on the type of loan you will be getting. It will also vary between lenders.

This can be confusing because having unused credit can help you if it lowers your credit vs. debt ratio, but still harm you if it raises your credit vs. income ratio too high.

#3. Your Credit Time Line

Your credit history as far as when you actually began to establish and maintain your credit. This includes how long you have had a relationship with any one creditor. Long standing accounts hold more value than newly opened accounts.

#4. The Types of Credit You Have Established

Lenders and creditors favor accounts that have a variety of credit established. They want to see car and home loans as well as revolving credit.

#5. Inquiries, Open Accounts, & Account Balances

Every time your credit report is requested by someone other than you, it affects your credit score. It is not a huge factor, but it does diminish your credit slightly. One way you can lower the impact of credit inquiries is to keep them within a short period of time. For instance, if you are seeking to get a car loan, try not to spread those inquires out over more than a week’s time.

You can also request a copy of all three credit reports before you begin shopping for a home or car loan. You can request that each lender allow you to use the reports you ordered to calculate their offer. Once you are both in agreement and you are ready to accept an offer, you can then allow that lender to make the inquiry if needed. That way you limit the number of inquiries from lenders you will never obtain a loan from.

Your account balances and the number of open credit accounts you have are also part of the scoring process.

These are just the basics of the FICO scoring process. However, even knowing the basics can help you understand how they can affect your credit report.

There are several things that can affect our credit report in a negative way. Some of those things, such as bankruptcies, cannot be removed. However, there are many negative marks on our credit reports that we can have removed, and thus we can begin to repair our credit report.

There are laws in place to protect you that are often totally ignored by the credit reporting agencies. The way to fix your credit report begins with you learning exactly what it contains and making sure it is being reported correctly.

The first step in repairing your credit report is to obtain a copy of it from the three credit reporting agencies. They are Experian, Equifax, and TransUnion. You can easily locate these online. It is important to obtain all three reports because they often report the same accounts differently.

Once you obtain the copies of your credit report you can look for items that may be being reported incorrectly that you can dispute. One of the easiest items to dispute and have removed is late payments that are from accounts that have been closed for over 2 years.
Many people do not realize that just because a bankruptcy can remain published in your credit report for seven years, it does not mean that every other negative item is able to do it. Just because a negative item is on your report, doesn’t mean it belongs there.

The fact is, each and every item on your credit report must actually be proven to be a true and accurate statement in order for the credit bureau to continue reporting it. This means that you can challenge every single negative item on your report and it is up to them to provide the proof that it is correct.

Now this doesn’t mean you will be able to remove them right away, it only means you can challenge them. The problem is that after two years many credit reporting agencies begin to store old data and no longer have instant access to it. This means you have to wait for a response from the companies who originally reported the account. Many times if you challenge these negative items, the creditors will not bother to fight your dispute because it would require more time and money paid to their employees than it is worth to them. Anytime a creditor does not prove an item belongs on your credit report, it must be removed.

Make sure to get an updated report regularly to see that the things that you have had successfully removed don’t pop up again later.  You also need to make sure that you keep all documentation so that you can have things removed again if they do come back. The key is to stay on top of it. Get regular reports, check them, and keep all your documentation for future reference.