Costco Connection - June 2012

advance of a major loan purchase to clean up your credit report and bump up your score. Credit scores can’t be used, or requested, by employers to determine hiring or firing. Employers can, however, use information from credit reports, but they have to ask your permission first. Working with a credit counseling service to corral your finances won’t negatively affect your credit score and does not appear on your credit report. However, the Federal Trade

Commission cautions consumers against credit repair services, and offers free credit repair information on its website at www.ftc. gov/bcp/edu/pubs/consumer/credit/ cre13.shtm.

crash course

p n E r,
“There’s absolutely nothing that a service
can do for you, if you have low credit or poor
credit, that you cannot do for yourself,” says
Carlson. “If there’s information on your report
that is true and accurate, but is negative, no
one can get that expunged from your report—
not a credit repair agency, and not you.”
So, to sum up, better credit means better
credit scores. Better credit scores mean better
credit. Happy roads ahead! C

score

STEVEN LAIT

The basics behind the number that drives your financial health

By Rita Colorito

ON THE ROAD to financial health, it pays to know, and mind, your credit score. This three-digit number determines how much a lender will loan you and at what rate. The higher your credit score, the lower your rate for mortgages, car loans, credit cards, insurance premiums, etc. Landlords can also use your score to decide whether to rent to you.

“A credit score reflects your ability to make good on a promise,” explains Karen Carlson, director of education for InCharge Debt Solutions, a credit counseling service.

The three major credit bureaus—Equifax, Experian and TransUnion—compile your credit report. Despite some variations, the report basically includes your personal information, the credit lines you have open and your payment history. You’re legally entitled to a free credit report every 12 months from each of the three credit bureaus, available through AnnualCreditReport.com, the official website.

Using a computer algorithm developed by Fair Isaac Corporation (FICO) that digests information in your credit report, each bureau crunches your credit score. While the FICO score is the best known, a lender may use another “brand” of credit score, which could result in a different number. When you apply for credit, lenders will often disclose your score at no cost.

Credit scores fluctuate as information in your credit report changes. Under the Fair Credit Reporting Act, if you’re denied credit, insurance or employment, or if your credit rate increases, you’re entitled to a detailed explanation and a copy of your credit report and credit score from the credit bureau used to make that determination.

Several factors fuel, or drain, your credit score, according to FICO.

● Payment history accounts for about 35 percent. The simple solution: “Pay your bills on time,” says Carlson.

● Credit utilization comprises 30 percent.
“People with the highest scores tend to only be
using 20 to 25 percent of their available credit,”
says Carlson. To drive up your score, drive
down your debt. “You’re the best candidate for
credit when it looks like you actually don’t
need it,” she adds.

Rita Colorito ( www.ritacolorito.com) checks her credit report regularly.

The Costco Connection Costco’s identity protection service provided by IDENTITY GUARD® includes credit reports and daily credit monitoring based on data compiled from the three major credit bureaus. The Credit Analyzer allows you to explore the impact that various credit actions may have on your credit. Monitoring alerts help protect against identity theft. The service starts at $9.99 a month for Executive members. To learn more, visit Costco.com and search “Identity3” or call 1-866-818-0874.

Fraud prevention? Check, please

TO HELP STOP fraud in its tracks, Costco offers enhanced security checks. While all of the checks available through Costco’s check-printing service come with state-of-the-art fraud-prevention features, the enhanced security checks help prevent check fraud and identity theft with the addition of a 3D hologram border. This special border is very difficult to reproduce with conventional printers and copiers.

The security checks also use thermo-chromic ink that disappears when heat is applied and reappears once cooled. The word “SECURITY” is embedded over the signature line and signals attempted photocopying if it appears altered. The security checks also feature an intricately patterned border and a prismatic background pat-