Table of Contents. Page 3 Understanding Credit. Page 6 What Is My Credit Score? (And How Can I Raise It?)

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1 GUIDE TO USING wisely CREDIT At Discover, we believe that consumers should be armed with the information they need to help them make wise credit decisions. We understand our role in the education process, and are committed to providing information that s simple and easy to understand. So let s start at the beginning Discover Bank, Member FDIC USECREDITWISELY

2 2 Page 3 Understanding Credit Page 6 What Is My Credit Score? (And How Can I Raise It?) Table of Contents Page 8 How to Establish and Maintain Good Credit Page 11 Understanding Your Credit Card s Terms and Conditions Page 15 Tips on How to Avoid Identity Theft and Credit Card Fraud Page 19 Common Identity Theft Scams Page 22 Take Control What to Do if You Are a Victim of Identity Theft and Credit Card Fraud Page 25 Frequently Asked Questions: Online Tools for Managing Your Credit Page 27 Credit Glossary

3 3 UNDERSTANDING credit

4 4 A CREDIT HISTORY IS A COLLECTION OF all of the pieces of financial information that relate to your life. It contains information on how long you ve had your individual credit accounts, the account limits, balances and your payment history. Current and future creditors only want to know one thing: If they loan you money, what are the odds that you ll repay it? The reason creditors are so concerned about how risky you are as a borrower is because when you buy something on your credit card, you re essentially taking out an unsecured loan. The loan is unsecured because you haven t put up any collateral in case you don t make payments, which means increased liability for credit card issuers. Contrast that with a mortgage, where you ve pledged your house as collateral to the lender in case you default on the loan. Because how you ve handled bills in the past has been proven to be a good indication of how you ll handle credit in the future, lenders obtain a copy of your credit history to take a look at this snapshot of your financial life. This gives them the information they need to decide whether to lend you money or extend credit to you. Information in Your Credit History In addition to listing each of your credit and loan accounts, your credit history also includes information that will identify you personally including your name, address, birth date and Social Security number. But not everything goes into a credit report. Some creditors, like landlords, many apartment complexes, some utilities and even certain lenders, don t report your payment history to the major credit bureaus (Equifax, Experian SM and TransUnion ). So even if you have a good record of on-time payments, it won t necessarily show up on your report. If you want to build a solid credit history, you ll want to make sure your on-time payments are reported. If the company only reports late payments and other negative information, but doesn t report on-time payments, that account may not help improve your credit history or credit score. Negative information, including any late payments, judgments, foreclosures and bankruptcies, is also typically reported to the credit bureaus. Information that seems neutral, such as what percentage of your maximum credit limit you re using, is also reported. Your Credit Score Each of the major credit bureaus has developed its own credit scoring system, and the three together have created VantageScore a score which runs from 501 to 990, with 990 being the top score. However, the FICO score, developed by Fair Isaac, is used by almost 90 percent of all lenders. Inquiries and How They Affect Your Credit History Each time you apply for a credit card or a loan, the creditor may obtain a copy of your history. This action is called an inquiry and it will be recorded on your credit history. Too many inquiries within a short period of time may have a negative affect on your credit history and score. Lenders will assume you re trying to get as much credit as possible because your spending is out of control. (Even if it isn t.) Rest assured, when you request a copy of your credit report (which you should do periodically), it will not negatively affect your score. You are entitled to at least one free copy from each of the three bureaus every year. Your credit history and score determine how much it costs for you to borrow money. If your credit history shows that you pay on time and have a high credit score, you should be able to borrow at low rates. If your record is not as good and you have a lower score, you may not be able to borrow at all or you may have to pay higher rates.

5 5 The FICO score runs from 300 (poor) to 850 (perfect) and the higher the score, the better your credit. According to Fair Isaac, the median FICO score is 723, meaning half of consumers fall above that and half below. Having any negative information on your credit history will lower your credit score, but there is a statute of limitations on how long credit bureaus may keep negative While the report is free, there is a charge to see your credit score. If you ve applied for credit and were turned down, federal law says you re entitled to see that score for free. Or you can buy it at any time from any of the three national credit bureaus Equifax (equifax.com), Experian (experian.com) and TransUnion (transunion.com). When you receive your credit report, go through each line to make sure the information is right. Are these your accounts? Are the balances the same as those you re seeing on your monthly bills? Does the report reflect your account history accurately (paying off balances, paying on time)? Check the personal information, too. Is that your current address? Do they have your name and Social Security number exactly right? Perfect Poor 450 information on your credit history. After either seven or ten years (the rule varies depending on the item), negative information like late payments, charged-off accounts or a bankruptcy is supposed to fall off your credit report. If that doesn t happen automatically, you have the right to make the bureaus remove it. Even so, as information ages on your credit history, newer information is weighed more heavily in your credit score. That s why you can raise your credit score over time if you begin to practice good credit habits. Check Your Credit History and Credit Score Often Along with paying off balances and making payments on time, one of the best things you can do to protect your credit is to read your report. You re entitled to at least one free copy from each of the three bureaus every year (available at annualcreditreport.com.) Some states allow additional free reports. Obtain one copy of your credit history every four months and you should be able to keep up with your history for free. 850 If you find an item that isn t yours or isn t being reported correctly, contact the bureau by phone and in writing, or go online and dispute it. The Fair Credit Reporting Act gives you the right to have incorrect information removed from your report. Be prepared to follow up until you see that the information has been removed. Credit bureaus have 30 days in which to confirm disputed information, or it must be removed from your credit history. You also may notify the creditor of any information you believe may be inaccurate or incomplete by writing to them at the address As information ages on your credit history, newer information is weighed more heavily in your credit score. That s why you can raise your credit score over time if you begin to practice good credit habits. provided by the creditor. This address may be found on the back of your statement or in other documents. Be sure to follow up and check your credit history again to ensure the fix is permanent. Credit bureaus will often remove disputed information temporarily while they investigate your complaint. By checking back, you ll ensure that the negative information or errors on your report are permanently removed.

6 6 What Is My Credit Score? (And How Can I Raise It?) What is a credit score? A credit score is a three-digit number that represents your entire credit history. Credit scores are designed to predict how risky you will be as a borrower and what your chances are of making good on loans and other financial obligations. The scoring system analyzes how you manage each piece of credit (such as credit card accounts, mortgages or home equity loans, car loans, school loans and other debt), and then calculates your credit score based on how you ve handled your debts over time. Who invented credit scoring? Fair Isaac was the first company to start using credit scoring on a national scale and its model, the FICO score, is the most widely used version. The scale runs from 300 (poor) to 850 (perfect), and the median score is about 723, meaning that half of consumers fall above and half fall below that mark. How is a credit score calculated? Different companies use different formulas to come up with a credit score. While all the formulas look at roughly the same information (things like your outstanding debts, whether you pay on time, whether you carry a balance), one formula may give more weight to certain factors than others, so different companies could assign you different credit scores. With a FICO score, the most widely used model, these are the components that go into the calculation of your credit score: Payment history: 35% Amounts owed: 30% Length of credit history: 15% New credit: 10% Types of credit used: 10% Source: MyFICO.com Federal law requires that these scoring models be empirically derived and statistically sound. So, when calculating your credit score, companies are not permitted to use certain factors, such as your marital status, religion, sex, address, health information or race to compute your credit score.

7 7 How high does my credit score need to be for me to buy a house or get a loan? Generally speaking, the lower your credit score, the higher the interest rate you ll have to pay to borrow money. The point at which a lender simply won t make a home loan varies from lender to lender. To get a loan at going market rates (dubbed a prime rate loan), you want to have a score in the high 600s or above. The higher your score, the more lenders you ll have competing for your business and the more likely it is that you ll be offered better rates and terms. If your score falls below the high 600s, you end up in what lenders call the sub-prime category. You can still get a loan, but as a sub-prime borrower, you will be offered higher interest rates and will probably see less favorable terms on your loan. In addition, not every lender will make sub-prime loans, so you may have a smaller pool of choices. How can I raise my score (and keep it high)? When it comes to raising or maintaining your credit score, the most important thing you can do is pay all your bills on time. If you can pay your bills in full and avoid carrying balances on your credit cards, your credit score is likely to increase. But there are a couple of little-known secrets that can trip people up: Inquiries: When you apply for credit, the lender pulls your file. That s called an inquiry and it will be recorded on your credit history. Too many inquiries within a short period of time may have a negative affect on your credit history and score. The reason: If you re applying for credit, it means you could be accumulating more debt. And from a payback standpoint, taking on more debt could mean that you ll be less able to make your other payments on time. So if you re planning for a big purchase (like a home or a car), keep excess inquiries off your credit history by not applying for other loans or opening up credit accounts while you re in the process of shopping for the loan for that purchase. And when you re shopping for that home or car loan, make all your applications within a two-week period. Then all the inquiries will count as one (as opposed to multiple inquiries), with only a five-point hit to your credit score. When it comes to raising or maintaining your credit score, the most important thing you can do is pay all your bills on time. Due dates: The pay by date is the date by which your payment must be received. When you re paying your bills, be sure to allow sufficient time for mailing to avoid a late fee. You may want to consider other payment options, such as online payments or pre-authorized debit, which are fast and free. Plus, you save money on postage. Credit balances: High balances are bad for your credit score. If you re carrying debt, creditors reason that you can t pay it (otherwise, you would have). And the closer you come to that credit limit, the more it appears that you re struggling financially. So if you re looking to raise your credit score, keep your balances to just a small amount of your available credit.

8 8 YOUR CREDIT HISTORY IS A list of all the pieces of your financial life. It includes every credit card account you ve opened and any other loans you ve taken out. It also includes your debt repayment history. Many factors can affect your credit score, including whether you ve paid on time or late, been foreclosed upon or filed for bankruptcy. If a court has ordered you to repay a loan or your debt has been deemed uncollectible these, too, affect your score. All of this information stays on your credit history. How to Establish and Maintain Good Credit Lenders look at your credit history to assess your ability to pay back their money. If you are having money problems, you represent greater risk to a lender. The basic principle with credit is this: use credit wisely and spend within your means.

9 9 Establishing Credit If you don t have credit (or much credit), the key is to start small. One credit card or small loan can get the ball rolling. But make sure your lender reports your on-time payments to one of the three credit bureaus Experian SM (experian.com), Equifax (equifax.com) or TransUnion (transunion.com) and preferably to all three. Pay on time. One of the most important steps in building and maintaining a solid credit history is to pay all of your bills on time each month. By paying on time, you re showing the lender or creditor that you ve got enough cash flow to cover your expenses. If you pay late and the creditor reports your late payment to the credit bureaus, it may damage your credit history, and lower your credit score. Keep your total charges well within your credit limit. If you want to boost your credit history and credit score, you ll want to keep your total monthly charges well within your credit limit. Why? In calculating your credit score, you ll take a hit if your balance is above that limit because it signals to creditors that you may be having financial difficulties and thus are a riskier borrower. Regularly read your credit report. One way to building a positive credit history is to make sure you know what information is being reported. Errors and negative information can damage your credit history and your credit score, so you ll want to regularly check your credit report to see what s there. If your on-time payments don t get reported, you re accumulating debt but not building credit. Only credit accounts that report your borrowing and repayment activity will count toward your credit history. Here are some tips to help you establish a good credit history: When establishing credit, pay off your charges in full at the end of the month. When you get a card, always pay off the balance in full when the statement arrives. Paying off your balance in full shows the card company that you re fiscally responsible. You re using credit as it was intended: as a short-term loan. Understand what debit cards can do for you. While they look like credit cards, debit cards actually function more like a checkbook. They provide direct access to the cash in your bank account. So you can pay for items and services with a debit card instead of writing a check. What debit cards don t do is help you build your credit history. That s because you re not using credit to buy these items you re using something that s treated like cash. Because you re using a cash substitute instead of credit, your debit card activity isn t reported to the credit bureaus and won t help you establish good credit.

10 10 After you ve had your first credit card for a while (six months to a year), call the issuer and ask to increase your credit limit. The idea is to raise the credit limit on the card, not your debt load. If you re carrying a balance, raising your limit will help keep your debt-to-credit-limit ratio low. That s an important factor when calculating a credit score. Your credit history becomes critical when it s time to make those big purchases, like a home or a car. At that point, a one percent difference in the interest on a loan will either cost you or save you thousands of dollars over the life of the loan. A secured credit card is tied to an account. You deposit a certain amount of money into the account and then you can charge up to that amount. If you default on your payment, the bank can tap into the account to get repaid. After six to 12 months of on-time payments, you may feel you re ready to graduate to a regular credit card or a store card. However, resist the urge to open too many store card accounts to take advantage of discounts. Every time you open one, it results in a credit report inquiry, which may affect your score. By keeping your eye on the goal establishing and maintaining a good credit history you ll be able to borrow that money when you want it, at the most favorable terms and conditions being offered. [ ] One of the most important steps in building and maintaining a solid credit history is to pay all of your bills on time each month.

11 11 Understanding Your Credit Card s Terms and Conditions WHEN YOU SIGN YOUR APPLICATION FOR a credit card, you re agreeing to the terms and conditions of the contract, which is often referred to as the cardholder agreement. This generally includes important information about your card, such as the interest rate you ll be charged on a balance and how that balance is calculated, which fees you may be charged and the cost of a balance transfer, as well as products or other perks you ll be offered. You will receive the full terms and conditions when you get a new card. Be sure to keep this document in a safe place, as it contains everything you need to know about your credit card account. If you can t find your agreement or want another one, call your card s toll-free number and ask to have it sent. Here are some of the most common terms and conditions you ll find in most credit card contracts. The annual percentage rate (APR) is the yearly interest rate charged for purchases that are not paid off by the due date. The APR may be fixed or variable, and will vary by credit card. A fixed rate will remain the same and does not fluctuate with market conditions. On the other hand, if the APR is variable, it will change depending on the interest rate index to which it s linked. For example, if the APR is tied to the U.S. prime rate, the APR will change when the prime rate changes.

12 12 Some credit cards charge different annual percentage rates depending on the type of transaction. APRs may be higher for cash advances and convenience checks than for purchases. APRs may be different for balance transfers. A low balance transfer rate may last until you pay off the transferred balance or it may apply to the transferred balance for a specific period of time. You may find a higher APR applied to your account if you make late payments or miss payments on your credit card. You may even have your APR increased if you are late paying on a different account one that has no relationship to this account because the lender deems you to be a greater risk. This practice is referred to as universal default, but it s rarely used today. Finally, some cards offer low introductory APRs that expire after a certain amount of time, such as six months or a year. Balance Transfer A balance transfer is when you pay off the balance on one credit card by using the credit you have on another account. In some cases, you may be charged a fee to complete the balance transfer. The fee is typically a percentage of the balance you are transferring. The terms and conditions generally include important information about your card, including the interest rate you ll be charged on a balance and how that balance is calculated, which fees you may be charged and the cost of a balance transfer, as well as any types of insurance or other perks you ll be offered. You can only transfer an amount up to your credit limit on the new card. So if your credit limit is $5,000 on the new card and you try to transfer a balance of $6,000, you will only be able to transfer $5,000 of that old balance. Balance transfers by themselves do not automatically close an account. You can continue to use the card or you can close the account. Claims and Disputes If you find a discrepancy on your statement, contact the merchant first to discuss the charge. If the merchant is not responsive to your claim, contact your credit card company. Credit card companies provide an address for billing error disputes, or you may call their dispute department. Claims and disputes might include incorrect charges, unauthorized charges and charges made to your card by an unauthorized person, as in the case of identity theft or fraud.

13 13 Fees You may encounter several different types of fees with your credit card account: Some credit card companies charge an annual fee to use their credit card. The cards that usually charge an annual fee offer benefits such as cash rewards, airline miles or points toward merchandise. The terms and conditions brochure or invitation letter will tell you whether there s an annual fee and how much it is. This is the fee charged by a credit card company if a cardholder with a balance does not make at least the minimum payment by the due date. Some cards also increase interest rates if cardholders miss payment deadlines. This is the fee charged by credit card companies when cardholders exceed their credit limit. For example, if your credit limit is $10,000 and you charge $11,000, you will be charged a fee. This fee may be charged by a credit card company if a cardholder chooses to pay his or her balance over the phone as opposed to online or through the mail. The fee covers customer service costs. Finance Charge A finance charge is the amount of interest charged on a credit card balance based on the annual percentage rate for that type of transaction (purchase, balance transfer, convenience check, cash advance). In short, it s a charge for the loan you ve taken out on the card. Grace Period A grace period is the amount of time from the date of the purchase to the date payment in full is due, during which you will not incur finance charges on your purchases. The length of a grace period varies from card to card, but it is commonly about 20 days. If you do not pay your bill in full, then you will not receive an interest-free grace period on future purchases. Most credit cards do not provide a grace period on cash advances or balance transfers, so interest is assessed from the date of each of these transactions. Method of Computing the Balance for Purchases This is how transactions are added to calculate a cardholder s monthly balance. If the method is average daily balance, that means that each day s transactions are added to a running total, which is then divided by the total number of days in the billing cycle. Monthly Minimum Payment The monthly minimum payment is the minimum amount that a cardholder with a balance has to pay each month to avoid default. Many cards charge two percent of the outstanding balance, although some charge as much as five percent. If possible, you should try to pay more than the minimum amount in order to pay down your debt faster. Transaction Fee This term is used to describe the fee charged for certain types of transactions, such as a balance transfer, cash advance and purchase made in a foreign country. This is usually a fixed percentage of the total amount of the transaction. Universal Default Some financial institutions reserve the right to change your rates if you have defaulted on an account or loan with another lender. For example, a cardholder who carries a balance on one card may have his rates increased on that card if he has missed a payment on one of his credit cards issued by another bank. This practice is rarely used today. Variable rates are tied to an index, such as LIBOR (the London Interbank Offered Rate) or an interest rate, such as the U.S. prime rate. When the index changes, the rate on the credit card changes.

14 14 Don t throw away that agreement! Some credit card companies offer extra features such as travel benefits, which are detailed after the cardholder agreement. In addition to the fees and charges listed in the cardholder agreement, you also may find extra benefits. In many cases, these include free benefits for those who are traveling within the U.S. or abroad. This is an emergency number available to cardholders when they travel within the U.S. or abroad. Depending on the card, hotline staff can arrange for a replacement passport, emergency cash, medical care and assistance with lost luggage. If you rent a car using a credit card and decline insurance coverage offered by the rental agency, you may be covered for collision damage at no additional cost. If you purchase your plane ticket with your credit card, you may receive flight accident insurance at no additional cost. Insurance. Your credit card may provide you with a free travel insurance policy that covers emergency travel and any emergency medical care you need while traveling.

15 15 TIPS ON HOW TO AVOID IDENTITY THEFT AND Identity theft happens when someone steals your personal information, such as your Social Security number, address, phone number or financial account information, and uses it to open up lines of credit in your name. Then the thief can take out a mortgage, buy a car or obtain credit cards to use on a shopping spree. Credit card fraud happens when someone gains access to an individual s legitimately opened credit card account and uses it to buy items, take out cash advances and create other illegal schemes. Credit card fraud costs credit card companies millions of dollars per year. But the consumer isn t generally responsible for any of it, as many companies have zero dollar fraud liability guarantees. Identity theft poses a longer-term risk, since basic personal information rarely changes. Once personal information is stolen, it can be used to open up new lines of credit for months and years to come. Unwinding Identity Theft and Credit Card Fraud Approximately a quarter of a million Americans file a complaint of identity theft with the Federal Trade Commission every year. Since not everyone who is a victim files a report, experts believe the actual number is higher. You can unwind the fraudulent activity that led to identity theft, but it may take a tremendous amount of time to clean up your credit history and restore your credit score. Once you ve gone through the paperwork, you will need to check back to make sure that nothing new turns up on your credit history.

16 16 When it comes to credit card fraud, your involvement will generally end once you report the fraud to your credit card company. You should do that as soon as you discover your credit card number or information has been stolen or that there are charges on a bill that you didn t make. While the number of identity theft cases has grown over the past five years, the good news is that there are ways you can reduce the chance that your personal information will be stolen. Here are some tips for avoiding identity theft and credit card fraud: fraud and verify that the order is being placed by the real cardholder, especially when the actual card is not present. If you know you are dealing with a trusted merchant, you should feel comfortable providing this code. Your best bet is a cross-cut shredder, which turns paper into confetti. Clever con artists can take strips from a stripcut shredder (shredders that slice paper into long, thin strips) and put them back together. But once you ve Protect Your Personal Information Pay attention whenever you are asked to provide your address, phone number, date of birth, Social Security number or account numbers. Consider who is asking for the information and what they are going to do with it. SHREDDING DOCUMENTS IS ONE OF THEBESTWAYSTOPROTECTYOURSELF AGAINST IDENTITY THEFT AND FRAUD. If you haven t initiated the interaction, be extra careful. Con artists can be extremely persuasive and will say almost anything to get you to divulge your personal information. Keep in mind if you re placing an Internet, phone or catalog order, merchants may ask you to confirm the three digit code in the signature block on the back of your credit card. Asking for this three-digit code, sometimes referred to as a CID (cardmember identification) code, is one in a series of steps merchants can take to prevent Shred Everything If you ve always thought about buying a shredder but haven t yet, you should make that purchase today. Shredding documents is one of the best ways to protect yourself against identity theft and fraud. By shredding all documents that contain any personal information (including your address, telephone numbers and other, more sensitive data), you make it a lot harder for someone to find any sort of useful information to use against you. created confetti, it s impossible to put back together. Use a Secured Mailbox Thieves will go to great lengths to steal your personal information and may even go as far as your front door. Letting checks or other sensitive information sit in an unlocked mailbox can put you at risk. When sending or receiving information that contains personal or financial information, consider using a secured mailbox or dropping it off in a locked mailbox at the post office.

17 17 Have Your Bills Sent to You Electronically It s easy to throw away items that contain personal information without even thinking about it. But someone looking for this information would have no qualms about digging through a dumpster or even the garbage can at your home to find an account number on a discarded bill or correspondence. Paper bills are a ready target for thieves. By having more of your bills and other sensitive information such as account statements sent to you electronically, you reduce the likelihood that you ll throw something away that contains your personal information. When you sign up to receive your bills electronically, you may be able to opt into an electronic reminder system. This will let you know when a bill needs to be paid (and will typically thank you when you ve made the payment). Pay Your Bills Electronically Paying bills electronically will eliminate some of the risk. If you pay your bills with a check through an unsecured mailbox, your personal financial information could be compromised or stolen before it gets to the intended recipient. But if you pay your bills online, you reduce the number of opportunities for your personal information to disappear. Paying your bills online also saves you time and the cost of buying stamps. Just make sure the Web site is a secure, encrypted environment. To make sure that a Web site is secure, look for a closed lock symbol in the bottom right of the screen, which means the site should be encrypted. Web addresses that begin with https also indicate secure sites, and if you click on the lock symbol, it should display the same https address. When it comes to making your credit card payment each month, you can use the card s electronic payment option. You ll get to choose the date on which your payment will be made and how much will be electronically withdrawn from your checking account. Them Safe Passwords can be difficult to remember, especially if you have different passwords for different sites. But it is important to create strong passwords and not just use your birth date, your address or another easy password that a con artist can guess. Strong passwords contain both letters and numbers, making them more difficult for thieves to guess. The strongest passwords include a combination of upper- and lowercase letters. Some security experts suggest putting numbers in the middle of the password instead of at the beginning or end. Remember: The longer the password, the more secure it will be. When you create a password, make sure it is at least eight characters long. Finally, select passwords you can remember, but don t use your birthday, your pet s name, family names or your Social Security number. Protect Your PIN numbers PINs are becoming as prevalent as passwords and are no longer limited to use at automatic teller machines. Many Web sites now require entering a PIN as an added safeguard. Keeping your PINs a secret may mean the difference between having savings and having nothing. Don t write PINs down, carry them in your wallet or save them on the computer. Do not passwords or PINs, and memorize both.

18 18 Carry a Light Wallet Another way to prevent identity theft and credit card fraud is to minimize what you carry in your wallet. Only carry the credit cards you need and don t keep your Social Security card in your wallet. If you have multiple forms of identification, such as a driver s license, a student ID, a work ID and a passport, do not carry all of them with you all the time. Carry only what you need. Also, it s a good idea to photocopy the entire contents of your wallet (the back and front of each card) so you ll have it in case of theft. Watch What You Say on Your Cell Phone Be careful about what you talk about on your cell phone in public. You may think it s no big deal to order a pizza and put it on your credit card over the phone, but an identity thief could be lurking nearby. He or she could take your number and start making online purchases. The same holds true for other personal information, such as a Social Security number. Check Your Credit History and Score Regularly It s a good idea to check your credit history regularly, so you know that everything on it is accurate and legitimate. You can order your credit report from each of the three credit bureaus Equifax, Experian SM and TransUnion by visiting annualcreditreport.com. Federal law entitles you to one free credit report per year from each of these bureaus. (Some states require the credit bureaus to give you more than one free report per year.) Another way to protect yourself is to purchase a credit-monitoring service from one of the credit bureaus or credit card issuers, which provides you with access to your credit report and credit score. These services will alert you by phone, text or when there is a change to your credit history. Take Action Remember, you can take action to protect yourself from identity theft by using the tips above. You may think you have better or more important things to do than stay on top of your personal information, but taking the time to protect yourself will save you time and money in the future. And you can go to bed at night feeling safer.

19 19 Common Identity Theft Scams These are some of the most common ways crooks and con artists will try to steal your personal financial information: Phishing. This occurs when online scammers send you s disguised as legitimate organizations in hopes that you will provide your personal information. The may warn you that access to your account will be terminated if you don t confirm your bank account number. Other scam s offer you big riches if you provide your account information, while others will ask you to reconfirm your payment details for an order you may (or may not have) placed. Be very suspicious of these s, as phishing crooks are clever and will often use the exact logos of big-name companies with which you may do business, such as a major retailer or financial institution. Never click through a link on any unless you personally know the sender. SeniorVicePresident@cont... You ve won BIG! Get your prize now! Today SercurityServices@accoun... Update your medical records Today Account.control@yourban... Please confirm your account information Today IRS.gov.refunddepartment... Refund expiration notice Today Another popular phishing scheme has to do with the IRS. You receive an telling you that the IRS has a refund for you. All you have to do is click through the and provide your bank account information. The IRS reminds taxpayers that the only way it will contact you is by a letter sent to your home address. Foreign lottery scam. You may receive an , letter or check telling you that you ve won a foreign lottery even if you didn t buy a ticket. All you have to do to collect the money is to provide your bank account number or deposit the check, so that the

20 20 funds can be deposited. Of course, this is a scam, and by providing information or depositing the check, you are giving access to sensitive financial information. Hot tips from cold calls. While phony telemarketing offers have become less of a threat with the government s Do Not Call list, you may still get coldcalled. If someone calls you with a hot investing tip and you don t know who it is, it s likely a scam. Fake caller ID. With today s technology, it s easy for someone to call your house and have a fake name or address pop up on your caller ID. Just because it looks like someone from your credit card company or bank calling, it may not be. Calls to confirm your personal information. Remember, your bank will never call and ask you for your full account numbers. And you should be wary of anyone calling to ask you to confirm your PIN number or the three- or four-digit security code on the front or back of your credit card, unless you re sure it s a trusted source. Medical identity theft. Be careful about the people with whom you share your medical history. When you go to the doctor, keep an eye out that records are kept in a secure area. Don t provide your Social Security number unless there is a good reason to do so. Ask your insurance company to give you a Phishing crooks are clever and will often use the exact logos of big-name companies with which you may do business, such as a major retailer or financial institution. Never click through a link on any unless you personally know the sender. new card that doesn t have your Social Security number on it. Fake jury duty. Someone calls to tell you that you missed jury duty and he or she needs to confirm your personal information. Because you think it is the court calling, you may be more likely to confirm your information and provide additional information. Child identity theft. One of the fastest growing segments of identity theft is the stealing of a child s Social Security number, name and other identifying information. Often, it is a relative or a close friend of the child s parents who steals the information to set up new credit or bank accounts. You may not know there is a problem until you try to get your child a driver s license, open up a checking account for him or her, or apply for a student loan. You can pull a child s credit history once he or she turns 13, and you should do that annually once your kids are teenagers.