Part 1: Identity Protection and Fraud Protection Depends on You!

First of four in this series.

Transunion has a lot to say about identity protection and fraud. It is not a matter of if it will happen but when it will happen.  Did you know that 8.6 million American households suffered some type of identity theft and fraud in 2010? The latest statistics from the Bureau of Justice paint an alarming picture for families fending off these crimes. The criminals who use your Social Security Number, infiltrate your accounts and steal your personal information are pretty sophisticated. Many take your information and rob you from countries outside the legal boundaries of US law. 

The best protection is taking proactive steps to help stop fraudulent activity and identity theft from happening altogether. While there are services that can alert you to changes in your credit file or finances, or a first sign of fraud or identity theft, you can start with four simple ways to make it harder for thieves to steal your personal information.

Monitor your mail

Your mailbox may seem pretty innocent, but it's a hotbed of information for identity thieves. Think about it, your account numbers, bank information and even private government-based information gets dropped there regularly. If you mail your bills out, you might be putting checks with routing numbers in your mailbox for pickup, as well. You may think about having a lock on your mailbox so only the mail man can get in the mailbox. Know when the mail comes to your house and retrieve it promptly, so it's not left sitting there. If you pay bills by mail, drop them into an official U.S. Postal Service mailbox instead of putting them in your box for pickup. Personally, I take my mail directly to the mailbox inside the post office.

When you are done with your mail or other important paper shred them (somehow destroy them) before placing them in the trash. Don't leave the promotional checks mailed out by credit card companies laying around your car, office, or residence. Anyone can pick them up and cash them. Dumpster diving is a nice profession if you are in the habit of stealing personal information of people and using it.  

Shut down your computer when not in use. Thieves can easily find easy to hack software in your computer to gain entry through the computer's back door. From that they can gain access to bank accounts, IDs and Passwords, as well as your other personal information. They can send emails to everyone in your address book without you knowing it.

Limit your wallet  
       

You might think it's important to keep your credit cards with you at all times, but if your wallet is packed with personal information, one thief could learn a lot by nabbing it. Limit what you carry in your wallet to one or two credit cards and your identification. Leave your social security card in a safe place at home and memorize the number instead. Keep infrequently-used cards out of your wallet. It's also helpful to keep the customer service numbers for your card accounts separate from your wallet so you can call and cancel accounts immediately after a theft for the fastest identity protection.

Men should not carry your wallet in your back pocket. That pocket is known by thieves as the "sucker pocket" because it is the easiest target of pick pockets.  Women should use a pocket book with large strong straps that go over the shoulder. Keep the pocket book in front of you and do not wear it like a back pack. 

Check websites

Online shopping is very convenient, but precautions should be taken. Never order from a website you don't know and trust. If it's a new website, check for the Better Business Bureau (BBB) seal or Trust-e symbol before you order. If you can't find either, run a quick Internet search on the website name and look for reviews from past customers to make sure they were satisfied with their experiences. When checking out, never save your credit card information to your account. If the site is ever compromised, thieves could grab your information and your account number.

Protect your passwords

Remembering a ton of different passwords is a pain, but don't make the mistake of using the same one across the board for online or bank accounts. Too-simple passwords are practically an invitation for identity thieves to break in, so skip the "password" or "1234" codes. Instead, use a combination of letters and numbers known only to you and change each slightly for different uses. For example, a password like “Awy%24L$K” is a strong password to use.  

Keep a hard copy of each password in a secure off line location for your own reference and you'll keep your accounts (and your identity) safer. But it will not be totally safe. We will talk about that next week.

Preparing to Make Big Purchases

 

If you are planning to make a large purchase in the next six months, you should pull maintenance on your credit report and if you are buying something jointly, pull the credit report on your spouse or significant other. You are looking for items (dings) that will affect your credit score. Transunion has some thoughts on what to look for. Let’s see what they have to say.

Wondering when judgments and bankruptcies will no longer appear on your credit reports? Check the dates on records in your credit report. Generally, here's how long judgments and bankruptcies remain on a credit report:
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Bankruptcy
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Generally, Chapter 7, 11 and 13 bankruptcies appear as public record items on your credit report for up to 10 years after filing. Chapter 13 bankruptcy records are sometimes taken off sooner, 7 years after filing, depending on the credit reporting company’s policy. When you receive an Order of Discharge in bankruptcy, your creditors should mark those accounts that were discharged as "Included in Bankruptcy" and they will stay on your report for up to 7 years.
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Charge-off accounts
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Generally, if a delinquent account is charged-off, the charge-off record appears on your credit report for up to 7 years.

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Closed accounts
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Generally, negative or derogatory information about delinquent accounts remain on your credit reports for up to 7 years. Positive closed accounts (without late payments or other delinquencies) may appear for longer than 7 years.
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Collection accounts
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Generally, accounts sent to collections will be listed on your credit report for up to 7 years, beginning 181 days from the most recent delinquent period before the collection activity. A collection account’s status should change to "paid collection" once you've paid off the entire amount. If you settle with the collection agency for less, your credit report may list the account as "settled for less than full balance."
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Judgments
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Generally, most court judgments, including small claims, civil and child support, stay on your credit reports for up to 7 years from the date they were filed.
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Late payments

Generally, if you make a payment late, the delinquency could appear on your credit report for up to 7 years.
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Tax liens

Under federal law, city, county, state and federal tax liens could stay on your report indefinitely. Generally, after the lien is paid, the record of it stays on your credit reports for up to 7 years from the payment date.
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City Fines and Parking Tickets

 

Whether you forgot to return your copy of The Grapes of Wrath to the library or to pay a minor parking ticket a few years back, these small infractions could eventually add up and show up on your credit history. Cities and other municipalities can send even small fines to collections, so make sure that you pay up on time and clear out small amounts so they don't turn into a big deal.
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Unsettled Accounts

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Changing service providers can be a pain, but in your rush to get it over with, don't forget to settle up your accounts. Some providers, be they gas, cable, electric, satellite or any number of other services, keep accounts on file when they aren't closed out properly. Make sure that when you make the switch, your account is caught up and you've requested the account be closed, otherwise the account might become inactive or delinquent.
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Closed or Inactive Credit

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It only makes sense: When you're done with a credit card, you close it out, right? Not necessarily. Closing an unused or inactive credit card could reflect as less available credit on your credit history, which is usually seen as a negative. Instead, keep unused credit cards open and use them for small purchases that you pay off immediately.
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Back Taxes

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They say that the only thing you can count on in life is death and taxes, but you'd better add "bad credit" to the list if you neglect to pay what you owe Uncle Sam. The IRS takes a hard line with back taxes and could even put a lien on your home or garnish your wages to get what they're due. This shows up on your credit score, so make sure you're all caught up or at least using a payment plan to settle.
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Soft and Hard Inquiries

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Most people know that excessive hard inquiries to check credit can negatively impact credit scores, but you might not even realize who runs a hard inquiry. When a creditor or lender checks your credit in connection with an application, you'll usually see a "hard inquiry" on your credit report. 

While a credit check for credit cards, loans or a mortgage is expected, you might not realize that opening a new cable account, getting a new cellphone, renting a car, or requesting a credit limit increase can all result in hard inquiries as well. Make sure that they're only done when absolutely necessary to avoid dragging down your score. Generally, these stay on your report for as long as two years, and may lower your credit score slightly.

When a creditor reviews the credit report of an existing customer, or when you access your own data online, a "soft inquiry" typically shows up on your credit report. Soft inquiries don't lower your credit score or appear to businesses checking your credit.

To get the credit for large purchase, you must try to correct as many “dings” on your credit report as you can. Not only can you get the credit that you need but you can also control what price you will pay for that credit.

Financing $15,000 for 48 months to buy a car at 6% cost $255.98 per month. With a clean credit report you can finance this car for 48 month at 2.87% costing you $240.63 per month. Over 4 years, that is a $736.80 difference. That is just one purchase. You may want to buy a house, appliances, and other goods. The cost of financing adds up. 

How you can make money by saving money!

I am going to tell you how to make money by watching your spending. Years ago, I could not figure out why my phone bill kept going up. So I went over my bill item by item. I found out that I was paying for some things that I did not want, did not order, and did not need. It took me two months to get that stuff off my bill. From then on, I examine my bills every month.  I do not order things that have a hidden bill attached. This short video will tell you all about it.

You may be among the one in four Americans who fell victim to deceptive charges in the past year. Financial Expert Farnoosh Torabi explains ways to avoid these unwanted charges.

http://finance.yahoo.com/video/playlist/financially-fit/finfit-top-6-deceptive-bill-230000320.html

Do you know that some bugs can destroy your home? Some can make you sick. Yet some can make you itch and break out all over your body including your face? Here is a short video that explains all about it.

Unwanted creepy-crawly house guests aren’t just pests. They can cost thousands of dollars in damage and even spread illness. Financial Expert Farnoosh Torabi gives pointers on how to prevent five of the biggest pests to your home.

http://finance.yahoo.com/video/playlist/financially-fit/finfit-5-biggest-pest-threats-170000997.html

 I learned in “Purchasing Policies and Procedures” class in college that you can save up to half the price of an item by reselling the item when you are done with it. For example, you can buy a car for $20,000 then in 6 to 10 years resell the car for $6,000 to $10,000. You can use that money to purchase something else. You can do the same with washers and driers, baby clothing, and electronics. Here is a short video that explains how to make money in this manner.

 Financial Expert Farnoosh Torabi gives five simple ways to save more than $1,500 in a year.

http://finance.yahoo.com/video/playlist/financially-fit/save-1-500-100000406.html

What Do You Know About Bond Investing?

Stephanie Ann Williams Tulloch who had a bond portfolio from birth. She went to community college then to a four year college financed by her bond investments. Her first A1 new car was financed by bond investments at high school graduation. Her and her husband made a down payment on their first home using the remainder of her bond investments. The bad news, she went on to get her MBA, that was financed by her income from working. But she did open an IRA and she is investing in non-investment grade bonds for her retirement 35 years from now.    

One of my readers told me that I only talk about bond in my blog but talk very little about other investments. I replied, “Why do you think my blog is called BOND INVESTMENTS.”

I think it is time to take a test to see what you know about Individual bond investing.  I notice some readers are still confused when it comes to this subject, so I want to help diminish the confusion.

1.            A corporate bond is an IOU that means that the corporation borrowed money from the lender. T or F


2.       ABC 7% of July 2, 2057 bond usually means that ABC Corporation will pay the bondholder 7% of the principal of the bond with a final payment of principal and interest on July 2, 2057. T or F  


3.      ABC Bond Fund and ABC 7% of July 2, 2057 have the same interest payments, ratings, risk, and maturity dates. T or F


4.      A Bond Fund matures at a future date? T or F


5.      Common Stock in ABC Corporation may or may not give a dividend. T or F


6.      A Corporate Bond can be bought and sold more easily if it was marketed on a Bond Exchange. T or F


7.      If ABC Corporation went out of business, the stockholder would have a better chance of getting any money after liquidation of the company than the bondholder. T of  F


8.      Corporate bonds are guaranteed by the state or the US government. T or F   


9.       ABC 7% of July 2, 2057 (issued at $1,000 each) if bought at $600 and paying interest every January 2 and July 2 would pay the bondholder an appreciation of $400 profit at maturity. T or F


10.  ABC 7% of July 2, 2057 (issued at $1,000 each) according to the indenture will pay bondholders $35 on January 2 and $35 on July 2 of each year until and including July 2, 2057. T or F  

These are the things that you must know if you are going to be a corporate bond investor. You can make good money in bond investing if you know the fundamentals.  I have been making no less than one percent a month since the year 2008. I have more than tripled my money in my IRA in that time investing primarily in corporate non-investment grade bonds. 

Damine, Daniel, and Stephanie on vacation in Pittsburgh, Pa. Because of bond investments, she learned enough in college to bypass US red tape, go to Jamaica and bring back a husband. Plus she started a business making a 6 figure salaries.  Daniel is now 8 years old and runs in the USATF national arena. He is already known around the world for his track and field experience. He also has investments directed at his college career in 10 years. The bad part, they will not give me any money. 

This is what an aggressive bond investment program can do for you and your family. If you look at this as me bragging then you will never learn anything from what I tell you. If you look at this as a model for what you can do with financing your life then you will be better off. All it takes is the will to do it. You make your plan and work your plan!

Here are your answers: 1)T; 2) T; 3) F; 4) F; 5) T; 6) T; 7) F; 8) F; 9) T; 10) T 

If you got zero or one wrong, you should be investing in bonds because you know what you are doing.

If you got two or three wrong, you may be a bit confused about the fundamentals but can overcome this by reading back issues of my blogs on this subject.  

If you got more than three wrong, you need to read up on the subject by reading back issues of my blog. At this point, any broker, banker, or insurance salesman can rip you off due to lack of investment education.

 

 

Know the Type of Lenders Available

It may be time for you to buying a house, condominium or co-op.  Look carefully at lenders and shop around before you commit. Don’t just talk to one because they are not all the same.

Lenders vs. brokers 

Contact several lenders to make sure you’re getting the best price since different lenders may quote you different prices. You have options; you can get a home loan through a bank, mortgage company, credit union or mortgage broker.

Brokers arrange transactions rather than lending money directly, which means they find a lender for you. They might have a wider selection of loan products and terms. But that is not always in your favor.

Watch for brokers’ fees

If you’ll be dealing with a broker, investigate how that broker will be paid and any associated fees you’ll have to pay. Always negotiate with the brokers and the lenders to get the best possible deal. If you have a top credit score, you have leverage.

Get a breakdown of costs

Ask the lender or broker to itemize all associated loan costs. Then ask them to waive or reduce one or more of their fees or agree to a lower rate or fewer points. Make certain the lender or broker isn’t reducing one fee only to increase some other one.

When you’ve negotiated terms you like, ask the lender or broker for a written lock-in. The lock-in should mention the agreed-upon interest rate, the duration of the lock-in and the number of points to be paid. A fee may be charged that is sometimes refundable.  

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The Dow Jones Averages is Beating my Individual Bond Portfolio!

 Let me get out my crying towel.  
The Dow is beating me. I am so unhappy!

March 31, 2013 is the end of the first quarter. This is the first quarter that the Dow has beaten my Junk bond portfolio since before the year 2008. Stocks are moving up in value. Year to date, the Dow Jones Averages are up 11.25% while my Junk Bond Portfolio is only up 3.471% or 1.157% per month for the last three months.

If you decide to invest in stocks or mutual funds, keep in mind that stocks and mutual funds go up as well as down. When the bear market comes, they do not make an announcement on TV or ring a bell on the stock exchange. When it comes, it comes and you usually find out after your investments have fallen substantially in value.  You usually get involved in the market after everyone else bought in and made the individual stock prices increase in value. You usually get out after the markets crash and your investment is only worth a fraction of what you put into it.

Here is the reason why I buy individual Junk bonds. They usually mature on a future date. They give interest on future dates and I can calculate how much money I will make on each investment.

Stocks are riskier because they go up and down. Bond holders are in line to be paid before stockholders. Plus I have a better idea of when I will have my money as oppose to the stockholder.

Paying Your Taxes on Credit

So you did not take enough out of your paycheck to pay your taxes all year. Now you owe the IRS. You are considering taking out a loan on your credit card to pay your taxes.  Paying Your Tax Bill with Credit? That convenience comes with a price. Let me give you the scoop on what happens if you put your tax bill on a credit card.
 

Some states also allow you to pay your state income tax bill with a credit card. Paying your taxes with credit cards is safe and secure, plus you can use the payments to count toward rewards if you have cards that offer them.

Let’s say you pay your taxes on credit and now your credit card is due. Now what?  

Paying A Price for ConvenienceHowever, you will pay for this convenience. The IRS doesn’t charge any extra fees. They don’t charge penalties for using credit to pay but service providers do. Uncle Sam isn’t going to eat those costs, you are.  Fees vary depending on how you’ve decided to pay.  

If you owe, for instance, $5,000, you might have to fork over $115 in convenience fees. And if you don’t pay your credit card balance in full, you could end up paying interest at the credit card issuer’s rate.  This rate might be higher than the IRS’ charge for installment payments.

Pay Now, Pay Later

If paying off your credit card bill for your taxes will be a hardship, you might want to consider whether you may qualify for the IRS’ installment plan. After an initial fee to set it up, usually $52 for direct debit, you’ll get a monthly interest rate on the outstanding balance which will likely be much lower than what a credit card provider charges.

Utility Fraud is Easy to Commit on You!

We talked about identity thief many times on this blog. By now you know to destroy all bills and documents with your personal information on it before you put them in the trash.  Even after doing that, you still may not be safe from thieves.

Identity theft is a very real criminal activity. Utility fraud is a much more popular scheme with lawbreakers than identity theft.  In fact, utility fraud is currently rated the number two type of fraud in the United States. In some states, utility fraud rates higher than credit card fraud.

Utility fraud is the illegal practice where identity thieves use your personal information to obtain utility accounts such as Natural Gas, Electric, Water, Sewer, Cable, and other services.  In many cases, you will have to go to court and fight charges that these bills amounting to thousands of dollars are not your bills. These fraudulent bills may stop you from getting that new job or purchasing that new home or car. 

These smart thieves can set up telecommunication accounts through your home or cell phone. In many cases, your name, address, and phone number is all that they need to commit utility fraud.  That can be done by a relative, friend, or just someone who knows your name, address, and phone number but can’t open accounts because of their own bad credit.

About 15% of senior citizens are victimized by an identity thief by obtaining unauthorized telecommunication accounts or access to utility equipment/services by using the person’s name.

You can fight utility fraud by doing the following;

•        Keep a tight rein on all personal information and never give it out over the phone

•           Shred any documents or mail with your personal information on it

•          Never put personal information in the trash without shredding it first

•          Never give out utility account numbers over the phone or to people who you do not have evidence that they belong to that utility company.  

•           Check your three credit reports at least once a year, looking for duplicate utility accounts.