Guarding Yourself Against Credit Card Skimming

By: Rachel Douglas, NFCC certified Credit Counselor

Card skimming is a method used by thieves to steal credit or debit card information. Skimmers place counterfeit devices on ATMs which record your information when cards are inserted into them.

This practices illustrates that credit and debit card accounts are vulnerable even if the cards themselves are never lost.

In part, that is because credit and debit card numbers are usually stored unencrypted on a magnetic stripe on the reverse of each card, which thieves can easily copy at low cost.

Summer is the highest-risk season for scams and thefts, so make sure you know how to properly protect yourself to avoid becoming an easy target.

To protect yourself from card skimming scams, practice the following:

Avoid ATMs that you do not normally use.
Thieves commonly put out-of-order signs on legitimate ATMs and set up nearby counterfeit ones that skim information from your card. ATMs positioned inside banks within view of watch cameras aren't risk free, but they create more challenges for the thieves who install skimming equipment.

Cover your code.
When entering your PIN into an ATM or card reader, cover the keypad from the observation of hidden cameras or anyone in close proximity.

Use the "credit" option with your debit card.
If you must use a debit card, choose the option to have the purchase processed as a credit transaction rather than entering in your PIN.

This option is available at many point-of sale terminals, and functions the same exact way as using the debit option. This way, your debit PIN is more secure.

Card skimmers particularly target gas stations, especially in vacation areas. Make sure to be extra careful while filling up your gas tank!

If You Want to Improve Your FICO Scores…Paying Off Credit Debt Reigns Supreme

Guest article by John Ulzheimer of SmartCredit.com

When it comes to boosting your FICO credit scores there are a variety of strategies that will yield varying amounts of improvement.  Many people believe that getting negative information removed from your credit reports is the number one way to increase your scores.  This is correct but only if the consumer is successful at getting most, if not all, of the negative information removed.  Getting one of your twelve collections removed isn't going to do anything for your scores.

A much more actionable (and realistic) way to increase your scores is to pay off debt.  Not only is this a proven way to earn better scores but also it's practically immediate. Paying down debt can result in a better score in less than 30 days, which is lightening fast in the slow moving credit-reporting environment.

But before you crack open your checkbook you'll want to consider WHICH debt you're going to eliminate.  Why?  Because when it comes to improving your credit scores not all "debt elimination" is created equal.  In fact, paying some huge debts will yield little to no score improvement while paying smaller debts can result in meaningful score boost.

Using a scoring tool built by FICO, I recently simulated the following "pay off" scenarios and measured their impact to a FICO score of 630, which is clearly one that you'd like to improve.  Nothing other than the following actions changed on the credit report.

1) Paying off a $250,000 mortgage

2) Paying off a $35,000 auto loan

3) Paying off a $5,000 credit card

The results are as follows…

Paying off a mortgage loan of $250,000 improved FICO 630 to FICO 635

I've been telling people for many years that installment debt, even in large amounts, doesn't have much of an impact to your scores.  This is the quantification of that advice.  And while this is just a simulation, in 2010 I sold a house and eliminated a $249,000 mortgage and my FICO scores went up four points.

Paying off an auto loan of $35,000 improved FICO 630 to FICO 635

An auto loan is an installment loan (like a mortgage) and the effect of paying it off is equally unimpressive from a scoring perspective.  Don't get me wrong; it's nice not having a monthly car payment.  And, it'll save you big bucks not paying interest on a $35,000 loan any longer.

Paying off a credit card balance of $5,000 improved FICO 630 to FICO 665

Eliminating the credit card debt resulted in the largest improvement to the credit score, and really it wasn't even a close race.  Credit card debt is scientifically proven to be a riskier type of credit for lenders to extend, which means even smaller amounts like what was used in the simulation can have a significant impact to your FICO scores.  It also means if you can pay it off your scores will improve a lot, and very quickly.  And even if you can't pay off your credit cards 100%, your scores will still improve by paying it down as much as possible.

Now, where's my checkbook?

John Ulzheimer is the President of Consumer Education at SmartCredit.com, the credit blogger for Mint.com, and a Contributor for the National Foundation for Credit Counseling. He is an expert on credit reporting, credit scoring and identity theft. Formerly of FICO, Equifax and Credit.com, John is the only recognized credit expert who actually comes from the credit industry. Follow him on Twitter here.