FINANCING

8 Ways To Improve Your Credit

Credit scores, along with your overall income and debt, are a factor in determining if you’ll qualify for a loan and what loan type you can qualify for.

1. Check for and correct errors in your credit report. Mistakes happen, and you could be paying for someone else’s poor financial management.
2. Pay down credit card bills. If possible, pay off the entire bill every month. However, transferring credit card debt from one to another could lower your credit score.
3. Don’t charge your credit cards to the maximum limit.
4. Wait 12 months after credit difficulties to apply for a home loan. You may be penalized less for problems after a year.
5. Before you buy your new home, don’t order items for the home on credit, such as appliances and flooring, until after your loan has closed. The amounts will add to your debt and can negatively impact your loan at the last minute.
6. Don’t open new credit card accounts before applying for a new mortgage. Having too much available credit can lower your credit score.
7. Shop for mortgage rates all at once. Too many credit applications can lower your score, yet multiple inquiries from the same type of lender are counted as one inquiry if submitted over a short period of time.
8. Avoid finance companies. Even if you pay the loan on time, the interest is high and it will probably be considered a sign of poor credit management.

ATM crime is increasing

Doug Johnson, a vice president and the senior adviser of risk management policy for the American Bankers Association, acknowledges that ATM skimming may be getting worse.

A skimmer is a device that reads and records all the account information stored electronically on the magnetic strip of an ATM card. Fraudsters have returned to ATMs in force as a favorite fishing hole for that prize catch: your debit card. With a little light mechanical tampering, thieves can “harvest” your account details and PIN number in seconds, then use them to either produce a “clone” card or to simply shop online until your account runs dry. With debit fraud, the thief actually drains the money directly from a checking account, leaving the victim to deal with bounced checks, missed payments and a downward-spiraling credit report while fighting with the bank to correct the wrong.

Litan predicts the ultimate solution to ATM/debit fraud may involve the chip-enabled “smart card,” which is more difficult to clone. The chip in a smart card is combined with the user’s PIN — a system known as “chip and PIN” — to verify transactions as nonfraudulent.