Category Archives: identity theft

Most Canadians are in the dark. Shedding light on your credit score.

how to improve credit score

As a Canadian, maybe you’re in the dark about your credit score. In fact, if you’re like 56 per cent of the country’s adult population, you have never checked your credit score, according to a 2015 survey sponsored by the Bank of Montreal. This finding is astonishing to me.

Credit scores are widely available to many in finance and business who check credit standings before they make decisions that can affect a person’s or a family’s way of life, often in big ways. Since others are keeping tabs on the way you handle money and credit, shouldn’t you stay on top of what it is they are seeing?  

You can be sure that Equifax and TransUnion have created a credit report and a credit score in your name.

Others can check up on your credit score through a simple request for information from what are called credit bureaus (also known as credit reporting agencies). In Canada, the two big bureaus include Equifax and TransUnion. They keep track of the way you handle credit and create a history of your financial behaviour through what is called a “credit report,” which forms the basis for your credit score.

If you’ve ever used a credit card, taken out a personal loan, or joined any sort of “buy now, pay later” plan – among other ways to borrow – you can be sure that Equifax and TransUnion have created a credit report and a credit score in your name.

Your score provides a snapshot of your credit worthiness in the form of a numbered ranking.

Your credit score is the big highlight of your credit report. Your score provides a snapshot of your credit worthiness in the form of a numbered ranking. It is tallied not only by the credit bureaus but by lenders, too. If your score is low, you may run into trouble borrowing or applying for something. If that’s the case, getting credit counselling from a qualified, not-for-profit agency such as Credit Canada should become a priority.Credit scores consist of three-digit
numbers that show whether
you are a good or a bad credit risk: Scores
range from 300 (for very bad, high-risk
folks), to 900 (for very good, low-risk individuals). You raise your score when you show lenders that you can use credit wisely. Your score drops when you show difficulty managing credit. Your score changes over time as your credit report is updated.Credit score charts look something like this:

Credit Score Quality

|300 to 559| Poor 

|560 to 659| Fair

|660 to 724| Good 

|725 to 759| Very good 

|760+| Excellent

By law, credit bureaus can sell credit reports to banks, credit unions, and other financial institutions, credit card companies, auto leasing companies, and retailers. In addition, for assurance that you are trustworthy, other organizations are allowed to view your credit history and credit score. These organizations include mobile phone companies, governments, employers, landlords, and in some cases insurance companies (rules vary somewhat across Canada).

Get all the details about credit reports and credit scores; start by visiting a Web site chock full of information.

As the Government of Canada points out, “Usually, when you sign an application for credit, you allow the lender to access your credit report. Your consent generally lets the lender use your credit report when you first apply and anytime afterward while your account is open. In many cases, your consent also lets the lender share information about you with the credit reporting agencies if your application is approved.”

I strongly encourage you to get all the details about credit reports and credit scores; start by visiting a Web site chock full of information from the Financial Consumer Agency of Canada (FCAC). The Web site also provides information about how you can get your credit report free by snail mail, or how you can access it online for a nominal fee. Visit FCAC here

Source: Credit Canada Debt Solutions Laurie Campbell on Tuesday, July 21, 2015

Understanding Credit

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Source: Canadian Bankers Association

Last modified: 02 January 2013

Many consumers use credit to help manage their personal finances. Credit can be a mortgage to buy a house, a loan to buy a car, a line of credit for larger purchases or a credit card to make everyday purchases more convenient. It’s important to understand how different types of credit work, and how to use credit to build a strong personal credit history. This section provides information on how a credit card transaction works, credit card products, budgeting, and avoiding money mishaps. Understanding credit is the key to using it wisely and making it work for you.

How a credit card transaction is processed

Credit cards are a convenient and simple way to pay for purchases and, when using a credit card, you are using a sophisticated and reliable worldwide payment system. There are many benefits for consumers when using credit cards and for merchants when accepting them as payment, and all share the costs to the credit card system.

Check out the document, Understanding the Credit Card Transaction Process, for more information on how a credit card transaction is processed and the shared benefits and costs of this payment option.

Using credit wisely

It is sometimes easy to pay for purchases on a credit card, but don’t forget that you have to pay for what you buy later. Here are some guidelines for keeping control of your financial affairs and making credit work for you, not against you.

  • Make a budget for yourself and stick to it. Make sure that you know what is coming in and what is going out. That way you will avoid nasty surprises on your credit card bill.
  • Avoid impulse buying. If you had to pay in cash, would you be making this purchase?
  • Comparison shop as a matter of habit. Never buy anything – and that includes any form of credit — without comparing costs and value.
  • Always read and understand credit application forms before you sign them.
  • Be careful when co-signing a loan or guaranteeing a loan on behalf of others. Remember that you could end up paying off the loan if the borrower cannot handle it. Ask the same questions of the borrower that the lender would. Know the risks involved so that you can make a sensible decision.
  • Be knowledgeable about the cost of credit. Are you using the right type for your purpose? Are you using a more expensive form of credit than necessary? For example, if you’re getting loans from a payday lender, talk to your bank. Banks have a variety of short-term loans that are much cheaper than payday loans, including lines of credit, overdraft protection and even credit cards.
  • Be sensible about the number of credit cards you use. How many do you really need? Are you using them simply because you have them?
  • Keep track of all your credit purchases. Save the receipts for checking against the monthly statements and for keeping a running total of your obligations.
  • Remember, whether you use cash, a cheque, a card or a loan to pay for your purchases, to check out the reputation of the merchant, the store’s return policies, the quality of the goods and the product warranty. Using credit to pay for something does not absolve you of your consumer responsibilities.

Credit can be good or bad. It’s all about how you handle it. Before you decide on credit, carefully consider all of the factors and weigh them against your personal needs and values. For additional information on credit products, please visit the Financial Consumer Agency of Canada’s website. For information specific to your bank, please visit your bank’s website.

6 tips to thwart identity theft and fraud

Vigilant online activity, watchful eye on mail can help reduce fraud risk

By Matt Kwong, CBC News Posted: Jan 20, 2015 5:00 AM ET

Meghann Johnston says the last three years have been "incredibly stressful" after her bank account was looted three times.

Meghann Johnston says the last three years have been “incredibly stressful” after her bank account was looted three times. (CBC)

(Note: CBC does not endorse and is not responsible for the content of external links.)

Financial fraud by identity thieves is simpler than victims might suspect, experts warn. But even anti-fraud educators were surprised by the case of Meghann Johnston.

The former RBC customer’s accounts were compromised three times in at least two different branches of the bank, apparently by someone without a client card or PIN who managed to withdraw tens of thousands of dollars.

“It’s an unprecedented story in recent years. I cannot recall anything like this,” said Avner Levin, director of Ryerson University’s Privacy and Cyber Crime Institute.

“That it was in person, that it was done multiple times, and at the same bank, I’m really taken aback,” added Kelley Keehn, a personal-finance expert and author.

Although anti-fraud experts noted that Johnston’s case is rare, they said most consumers can avoid experiencing that kind of stress and financial heartache by adopting some new habits and correcting some bad ones.

Get ahead of the potential problem

It never hurts to give a heads-up to your credit bureau, whether or not fraud has occurred, advised Keehn.

Putting a proactive fraud alert on an account for as little as $5 through TransUnion or Equifax would ensure that anyone attempting to apply for credit in that person’s name would send out a flag alerting the lender to call the applicant directly first.

“If you haven’t been a victim but you’re still scared of all these breaches, you can still get that extra layer of security,” said Keehn, author ofProtecting You and Your Money, a 2014 identity-theft and fraud guide published by the Chartered Professional Accountants of Canada.

Beware of oversharing online

Resist the urge to brag. Vacation announcements, life milestones and financial achievements might be interesting news to share with friends, but it can also entice enemies seeking to exploit your social media activity for their gain.

“Everything you post online tells a story about you. It’s your birthday, or you go to this university, or you post that you just got a line of credit from the bank,” said Athena Mailloux, program co-ordinator for the Fraud Examiners’ program at Humber College.

“A lot of people don’t realize when they’re tweeting out all these bits of information, a fraudster’s job is to troll and put the story together to then become you.”

Don’t neglect your freebies

By law, you’re entitled to one free credit report per year anyway. So why not keep abreast of your credit score? Take the time to go through it in detail. If there is a discrepancy, call the 1-800 number on the back of your debit card and request to speak with identity-theft assistance services.

“That’s free as well, so take advantage of it,” said Mailloux, who owns a practice as a forensic accountant and has helped design identity-restoration services for credit card firms.

“Call the number on the back of your credit card or debit card, and they can refer you to free services where you can just ask general questions about how to protect yourself,” she said.

The Canadian Anti-Fraud Centre also has a toll-free line and a victim assistance guide for consumers who suspect they have been defrauded.

Keep a close eye on the mailbox

If you receive statements by mail, be aware of your billing cycles. It may even be worth logging your bills as they come in and providing a padlock so a postal carrier can lock your mailbox upon delivering mail, lest your statements with your financial details fall into fraudsters’ hands.

If expected mail doesn’t arrive on time, look into it sooner rather than later, said Daniel Williams, a spokesperson with the Canadian Anti-Fraud Centre.

“You’ll spot it way quicker than if you wait around until you smell the smoke and see the fire,” Williams said. “Criminals are very clever at only redirecting one person’s mail in a household so you might not notice the total volume going down to the point where it would be an issue.”

Shop securely online

Stick to trusted online retailers when making purchases online with a credit card. Rob Goodfellow, a former Ontario Provincial Police superintendent who heads the private investigations firm Investigative Research Group, suggests consumers look for signs of secure payment such as PayPal or Verisign.

“I’ve had a PayPal account that’s never been breached, and I always set up an individual account so if somebody does crack into it, they’re only going to get my limited funds in there,” he said. “Keep it outside your mainstream banking.”

Goodfellow also warns shoppers never to make purchases on public or shared computers. Bit if you do, he said, remember to clear the cache and cookies.

Be smart about paper trails and passwords

Don’t leave restaurant receipts on the table, and destroy documents you no longer need.

A paper shredder is a worthy investment, said Bruce Dorris, program director at the Association of Certified Fraud Examiners.

“Everyone should have at least a small one in their house,” he said. “People will leave paper checks on their desk, but somebody can take one off the bottom and it’s not readily identifiable. Be vigilant about your surroundings.”

The same goes for passwords for computers and mobile devices. Dorris suggests changing passwords every month, or at least every three months.

Strong passwords may include a mix of numbers, upper- and lower-case letters and symbols.