What the experts say
A criminal’s guide to ID protection
“Identity theft is on the rise,” said Katie Lobosco in CNN.com. Half of all U.S. adult consumers had their personal information exposed this year in the colossal Equifax hacking scandal. Even if you haven’t noticed “any suspicious activity yet, it doesn’t mean you’re in the clear,” says reformed cybercriminal Brett Johnson, who spent six years in prison on fraud charges and is now an identity protection consultant. Johnson suggests putting a credit freeze on all three of your credit reports so that thieves can’t open new credit cards or take out loans in your name. He also recommends freezing your child’s credit; it’s “very likely a child’s Social Security number is already out there,” he says, and a fraudulent account could go “undetected for years.” Finally, check your credit report every three months and use a password manager, so you don’t keep “the same weak password for all your accounts.”
Rejected with an excellent credit score
Sometimes even people “with excellent credit get rejected” for loans and credit cards, said Jean Chatzky in NBCNews.com. More than 20 percent of American consumers have an “exceptional” credit rating of above 800. But a great score does not necessarily guarantee a seamless credit application. “Credit scores do not factor in your income, but lenders do.” That means you could be rejected if you don’t meet certain income requirements. Card companies are also getting wiser about “credit card points chasers”—people who open cards to get bonus or sign-up points and then disappear without spending much. You could have a great score and high income, but “if you’ve gamed six cards,” it’s increasingly likely you’ll get rejected for a seventh.
Hold off on spending your tax refund
“When you’re making out your holiday shopping budget, don’t confuse Santa with Uncle Sam,” said Kelli Grant in CNBC.com. More than half of those Americans anticipating a tax refund next year have already earmarked what they intend to do with the proceeds. Financial experts say plotting what you will spend your windfall on is generally fine. Not so good, they say, is increasing your holiday spending in anticipation of your potential payday. It’s an “inherently risky” strategy, particularly for those who intend to put their purchases on plastic. A better plan is to use your refund to pay down debt or contribute to a longer-term financial goal. As for holiday spending, stick to the budget “you currently have.” ■