Creditworthiness is vital to maintaining a healthy business. From business loans to vendor relationships, how well you manage your finances as a consumer will play a role in your company’s growth potential. One way to maintain creditworthiness is by paying attention to your consumer credit reports. CEOMOM chatted with Sandra Bernardo of Experian to learn how you can take control of your own credit.
Describe your role with Experian.
I work as a consumer education manager which is one of the many roles I have. I work on our outreach to the community to educate consumers on credit care matters. I write for our education blog which is at experian.com/education. I produce content such as educational videos and infographics. I talk with folks like yourself and other journalists and bloggers to get info out there. I also work with our public education director at Experian. I book interviews and speaking opportunities for him.
What is the first step to building and/or repairing your credit
One of the first steps is making sure you check your credit score and credit report periodically. We recommend at least a few times a year. It is amazing how much people neglect this and never check their reports. They have no idea what their credit score is and how it affects their ability to get a loan. Once you check it and get familiar you can work on how to better manage it. By checking your credit report you can find something on there that’s inaccurate. It’s very important that your info is accurate. You want to make sure your open credit accounts show that you have been making payments on time. Make sure your social security number is correct. Based on all of that is how your credit score is calculated.
What do you do if you find inaccurate information on your credit report?
If you find an item that is incorrect and an account that you don’t recognize like a credit card from a store you’ve never opened, you can go online and dispute it via the credit bureau website. You dispute an inaccuracy with the credit bureau where you received the report – each credit bureau offers consumers their own report. At Experian, go to experian.com/disputes and there is a portal where you follow the prompts to file the dispute. Select the reason you are filing the dispute. If you have backup information to prove what you are disputing you can upload those documents and submit it through the website. You can also do it via phone and by snail mail. It is recommended that you do it online because it is faster. Generally the credit bureau is required to respond within 30 days or so. The bureau will contact that lender and let them know that you have filed a dispute. The lender is the one who reported the information to the credit bureau.
If it’s other information like you are disputing a home address, that is an internal review which takes 30 days or so. For all disputes, you will get notification via email with the progress of the investigation and then a decision. Our online portal is very user-friendly and mobile optimized. You can now upload documents from your smart device. You can take pictures of the documents and upload them from your camera roll.
Which credit score is a better representative of your credit worthiness?
There are different scores out there. The most often used by lenders is the FICO score. There is one called the VantageScore. They are different scores because there are different algorithms used to calculate the score. They use some of the same basic information including payment history, length of credit, different types of credit such as credit card versus a car loan or a mortgage. Lenders are assessing how you are using your credit. They also look at recent inquiries to see if you have been applying for a lot of credit within the past year. If you are trying to open a lot of accounts in a short amount of time that might mean that you are needing funds. Have you maxed out your credit cards. They call that credit utilization. You want to keep that under 30%. Numbers range from 300 to 850. The FICO score requires 6 months of credit history and VantageScore only requires one month of history within the past 2 years. The most important part for consumers to know is as long as they know one of their scores generally they can manage their credit from that point. Just know that most lenders use the FICO score.
What are the most common misconceptions consumers have when it comes to credit management?
Consumers believe credit is something that they can’t manage themselves or have some control over. If your score is low there’s a reason for it that lies with you. Either you haven’t been paying your accounts, you have a bankruptcy, you have an account in collection or you are maxing out your credit cards. Those are all things that will affect your credit score negatively. You do have control over your score.
I know there are a lot of repair agency firms. Normally you can do it yourself by taking the appropriate steps to make sure the credit report is accurate. Ultimately it’s about how you are managing your finances. There are always extraneous circumstances but don’t rely too much on credit. There are non-profit organizations out there that can connect you with advisors or help you get out of debt. Just make sure it is a credible organization.
What are the most common ways identity thieves steal your credit/identity?
Identity theft has become an increasing problem. The best ways to protect yourself is by making sure you are checking your financial accounts. If you are doing online banking, make sure you are using sophisticated passwords and changing your passwords often. Don’t give out your home address or phone number and mother’s maiden name.
Be careful what you put on social media. People put so much online that thieves can piece things together. Make sure you are not oversharing your children’s information. Identity thieves can steal a child’s identification as well. You want to make sure you do things like shredding your documents and any type of mail that has your account information or home address. Most people don’t know that you don’t need to offer your social security number on forms and applications. Every office you may do business with such as your dentist or for a job application, initially doesn’t need your social security number. Try to avoid giving it out as much as possible. I often tell the person I am a victim of identity theft so I don’t give out that information.
What should you do if you find out you are a victim of identity theft?
If it’s related to a financial account you can contact the organization directly. Most likely you will be speaking to someone within the fraud department. Let them know that it wasn’t you who made the transaction. You also want to file a police report with your local law enforcement. In addition file a claim with the Federal Trade Commission. Then you will want to check all of your accounts and then change passwords. Lastly there is an option to enroll in an identity theft protection program. Experian has a product called IdentityWorks. It will alert you if something looks suspicious on your report. You can put a short term fraud alert on your credit report or you can do a 7 year fraud alert. What this does is alerts lenders that you’ve been a victim of identity theft. They must contact you via phone to confirm your identity before extending credit. You may do it online at Experian.com. Once you do it with one credit bureau they share the information with the other two.
To learn more about credit management visit experian.com/education. Stay tuned for part 2 of our interview where we discuss acquiring and managing business credit.
Sandra A. Bernardo is the manager of Public Relations and Consumer Education at Experian Consumer Services, a division of Experian, the nation’s largest credit bureau. In her role, she manages publicity efforts and outreach campaigns to generate awareness and understanding about credit.