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