Purchasing a Car

Checklist

• Look at your monthly budget and determine how much total (car payment, gas, and insurance) you can afford to spend per month

• Determine your needs (2-seater, 4-seater, towing capabilities, etc)

• Shop around for financing (get pre-approved for the amount that is your high limit)

• Go car shopping. Go to several dealers and narrow your search down to a few vehicles. Write down the VIN numbers and important information for each vehicle. Bring this information to Consumer Affairs Office and we will provide the history of the car for free ( CarFax would cost you $25 otherwise).

• Shop around for insurance. Price all of the vehicles that you are looking at so that you have a better idea of your monthly commitment with each one. Never finance insurance in with your vehicle purchase.

• Print out Kelley Blue Book and/or NADA value of the cars.

• It is the consumer’s responsibility to have vehicle checked out if it is used. You can arrange to have a mechanic diagnose any problems with the vehicle, usually for under $100.

• Decide if you want to purchase a warranty. Ensure that you read the fine print on after-market warranties (when the 3 yr/36,000 mile runs out). You need to understand what situations would cause coverage to be denied.

• If you are trading in, print out the blue book value of your trade-in.

• Take all of this paperwork out with you and negotiate with the dealers for the lowest price. Get them to draw up a contract with this price and take it home with you.

• Choose which vehicle best fits your needs, wants, and price range.

• Have someone look over the contract for you (CAO does this for you) prior to signing.

Hitting Close to Home

• A Soldier purchased a used vehicle from his last duty station. He did not purchase a CarFax, and started having mechanical problems. When he came into the CAO, we printed a CarFax for him, and found that it had been in a severe to moderate accident. This information did not have to be disclosed at the time of the sale. It is the consumer’s responsibility to have the vehicle checked out by a mechanic prior to purchase.

• A Soldier purchased a vehicle from a used car dealership. The vehicle’s price was nearly $6,000 over the Blue Book value in addition to being financed at nearly 18% APR. The Soldier purchased additional options such as service contract, insurance, etc. By the end of the loan term, the Soldier will have paid nearly three times the value of the car.
  

Frequently Asked Questions

Q. What if I decide that I no longer want a vehicle that I purchased two days ago?
A. There is no “grace period” in Tennessee or Kentucky. When you sign the contract, the dealership does not have to take the vehicle back.

Q. What if my vehicle breaks down right after I bought it?
A. The consumer is responsible for checking out a vehicle before they make the purchase. The seller does not have to disclose prior accidents.

Q. Why is my interest rate so high?
A. For first time buyers or people with poor credit, your interest rate will be higher than the national average. Many banks have first time buyer programs, and the MILES (Military Installment Loan and Educational Services) Program aim to assist these buyers in purchasing a vehicle. Ensure that you shop around for your financing in order to ensure that you are getting the lowest possible interest rate.

Q. My vehicle has a service contract, but the mechanic said that it does not cover the parts that I need to make the repairs.
A. You need to read the fine print on your service contract before purchasing it. Most service contracts have stipulations that cause some problems not to be covered. For example, if the reason that your engine seized was that you did not have regular oil changes (and kept your receipts to prove it), the parts will not be covered by many service contracts. Make sure that you read the contract carefully so that you keep your contract from being voided.

Purchasing a Home

Checklist

• Consider your options based on the length of time you will be in the area (renting vs buying). Properties in this area tend to take a few years to appreciate to the point where you will make any money from the sale

• Determine your needs (# of bedrooms, bathrooms, fenced-in yard, etc.)

• Look at your monthly budget and determine how much you can afford each month on your house (mortgage, insurance, utilities, lawncare, furniture, etc)

• Shop around for financing your mortgage (get pre-approved for the amount that is your high limit). Consider the type and term of the financing (for example, fixed rate, 30 year mortgage) Go house shopping. You can go through a real estate agent or find a “for sale by owner” property. Narrow your search down to a few properties.

• Consider the neighborhood restrictions/covenants. If you have children, consider the schools in the area.

• Determine which property you are most interested in, and make an offer. In this area, the seller normally pays the closing costs. Ensure that you include any specifics in your offer (for example: “seller will leave all appliances” or “seller will put new carpeting in the living room”)

• It is your consumer right to have a home inspection performed. People that do these inspections can be found in the yellow pages. Normally, this costs around $200, and they will inspect your house very thoroughly.

• Shop around for insurance. Decide if you want to purchase a warranty. Ensure that you understand what the warranty covers.

• Choose the house that best fits your needs, wants, and price range.

• Have someone look over the contract for you (CAO does this for you) prior to signing.

Investments

• What are you saving for? (retirement, college, home, etc)
• What level of risk are you willing to take? (higher yield usually equals higher risk)
• The earlier you begin to invest a portion of your income, the earlier you will reach your investment goals. Below is a chart showing how $100 grows over a period of 25 years at different risk levels.

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Thrift Savings Plan (TSP)
The TSP is a retirement savings plan for civilians who are employed by the United States Government and members of the uniformed services. The TSP offers Military Members the same type of savings and tax benefits that many private corporations offer their employees under "401(k)" plans. Effective in January 2006, military members can contribute any whole percentage of their base pay, as long as the annual total of taxed deferred investment doesn’t exceed $15,000.00 for 2006. Soldiers also have the ability to invest all or part of their bonuses, special pay or incentive pay, as long as the member contributes from basic pay. Those serving in a tax-free combat zone are allowed up to $44,000.00 in annual contributions.
Find more information on TSP at www.tsp.gov.

Mutual Funds

INVEST WISELY:
AN INTRODUCTION TO MUTUAL FUNDS
Over the past decade, American investors increasingly have turned to mutual funds to save for retirement and other financial goals. Mutual funds can offer the advantages of diversification and professional management. But, as with other investment choices, investing in mutual funds involves risk. And fees and taxes will diminish a fund's returns. It pays to understand both the upsides and the downsides of mutual fund investing and how to choose products that match your goals and tolerance for risk.
KEY POINTS TO REMEMBER
• Mutual funds are not guaranteed or insured by the FDIC or any other government agency — even if you buy through a bank and the fund carries the bank's name. You can lose money investing in mutual funds.

• Past performance is not a reliable indicator of future performance. So don't be dazzled by last year's high returns. But past performance can help you assess a fund's volatility over time.

• All mutual funds have costs that lower your investment returns. Shop around, and use the SEC's Mutual Fund Cost Calculator at www.sec.gov/investor/tools.shtml to compare many of the costs of owning different funds before you buy.

HOW MUTUAL FUNDS WORK
What They Are
A mutual fund is a company that pools money from many investors and invests the money in stocks, bonds, short-term money-market instruments, other securities or assets, or some combination of these investments. The combined holdings the mutual fund owns are known as its portfolio. Each share represents an investor's proportionate ownership of the fund's holdings and the income those holdings generate.
Some of the traditional, distinguishing characteristics of mutual funds include the following:

Advantages and Disadvantages
Every investment has advantages and disadvantages. But it's important to remember that features that matter to one investor may not be important to you. Whether any particular feature is an advantage for you will depend on your unique circumstances. For some investors, mutual funds provide an attractive investment choice because they generally offer the following features:
• Professional Management — Professional money managers research, select, and monitor the performance of the securities the fund purchases.

• Diversification — Diversification is an investing strategy that can be neatly summed up as "Don't put all your eggs in one basket." Spreading your investments across a wide range of companies and industry sectors can help lower your risk if a company or sector fails. Some investors find it easier to achieve diversification through ownership of mutual funds rather than through ownership of individual stocks or bonds.

• Affordability — Some mutual funds accommodate investors who don't have a lot of money to invest by setting relatively low dollar amounts for initial purchases, subsequent monthly purchases, or both.

• Liquidity — Mutual fund investors can readily redeem their shares at the current NAV — plus any fees and charges assessed on redemption — at any time.
But mutual funds also have features that some investors might view as disadvantages, such as:
• Costs Despite Negative Returns — Investors must pay sales charges, annual fees, and other expenses (which we'll discuss below) regardless of how the fund performs. And, depending on the timing of their investment, investors may also have to pay taxes on any capital gains distribution they receive — even if the fund went on to perform poorly after they bought shares.

• Lack of Control — Investors typically cannot ascertain the exact make-up of a fund's portfolio at any given time, nor can they directly influence which securities the fund manager buys and sells or the timing of those trades.

• Price Uncertainty — With an individual stock, you can obtain real-time (or close to real-time) pricing information with relative ease by checking financial websites or by calling your broker. You can also monitor how a stock's price changes from hour to hour — or even second to second. By contrast, with a mutual fund, the price at which you purchase or redeem shares will typically depend on the fund's NAV, which the fund might not calculate until many hours after you've placed your order. In general, mutual funds must calculate their NAV at least once every business day, typically after the major U.S. exchanges close.

Different Types of Funds
When it comes to investing in mutual funds, investors have literally thousands of choices. Before you invest in any given fund, decide whether the investment strategy and risks of the fund are a good fit for you. The first step to successful investing is figuring out your financial goals and risk tolerance — either on your own or with the help of a financial professional. Once you know what you're saving for, when you'll need the money, and how much risk you can tolerate, you can more easily narrow your choices.
Most mutual funds fall into one of three main categories — money market funds, bond funds (also called "fixed income" funds), and stock funds (also called "equity" funds). Each type has different features and different risks and rewards. Generally, the higher the potential return, the higher the risk of loss.
Fees and Expenses

As with any business, running a mutual fund involves costs — including shareholder transaction costs, investment advisory fees, and marketing and distribution expenses. Funds pass along these costs to investors by imposing fees and expenses. It is important that you understand these charges because they lower your returns.
Some funds impose "shareholder fees" directly on investors whenever they buy or sell shares. In addition, every fund has regular, recurring, fund-wide "operating expenses." Funds typically pay their operating expenses out of fund assets — which means that investors indirectly pay these costs.
SEC rules require funds to disclose both shareholder fees and operating expenses in a "fee table" near the front of a fund's prospectus. The lists below will help you decode the fee table and understand the various fees a fund may impose:

Shareholder Fees
• Sales Charge (Load) on Purchases — the amount you pay when you buy shares in a mutual fund. Also known as a "front-end load," this fee typically goes to the brokers that sell the fund's shares. Front-end loads reduce the amount of your investment. For example, let's say you have $1,000 and want to invest it in a mutual fund with a 5% front-end load. The $50 sales load you must pay comes off the top, and the remaining $950 will be invested in the fund. According to NASD rules, a front-end load cannot be higher than 8.5% of your investment.

• Purchase Fee — another type of fee that some funds charge their shareholders when they buy shares. Unlike a front-end sales load, a purchase fee is paid to the fund (not to a broker) and is typically imposed to defray some of the fund's costs associated with the purchase.

• Deferred Sales Charge (Load) — a fee you pay when you sell your shares. Also known as a "back-end load," this fee typically goes to the brokers that sell the fund's shares. The most common type of back-end sales load is the "contingent deferred sales load" (also known as a "CDSC" or "CDSL"). The amount of this type of load will depend on how long the investor holds his or her shares and typically decreases to zero if the investor holds his or her shares long enough.

• Redemption Fee — another type of fee that some funds charge their shareholders when they sell or redeem shares. Unlike a deferred sales load, a redemption fee is paid to the fund (not to a broker) and is typically used to defray fund costs associated with a shareholder's redemption.

• Exchange Fee — a fee that some funds impose on shareholders if they exchange (transfer) to another fund within the same fund group or "family of funds."

• Account fee — a fee that some funds separately impose on investors in connection with the maintenance of their accounts. For example, some funds impose an account maintenance fee on accounts whose value is less than a certain dollar amount.
Annual Fund Operating Expenses
• Management Fees — fees that are paid out of fund assets to the fund's investment adviser for investment portfolio management, any other management fees payable to the fund's investment adviser or its affiliates, and administrative fees payable to the investment adviser that are not included in the "Other Expenses" category (discussed below).

• Distribution [and/or Service] Fees ("12b-1" Fees) — fees paid by the fund out of fund assets to cover the costs of marketing and selling fund shares and sometimes to cover the costs of providing shareholder services. "Distribution fees" include fees to compensate brokers and others who sell fund shares and to pay for advertising, the printing and mailing of prospectuses to new investors, and the printing and mailing of sales literature. "Shareholder Service Fees" are fees paid to persons to respond to investor inquiries and provide investors with information about their investments.

• Other Expenses — expenses not included under "Management Fees" or "Distribution or Service (12b-1) Fees," such as any shareholder service expenses that are not already included in the 12b-1 fees, custodial expenses, legal and accounting expenses, transfer agent expenses, and other administrative expenses.

• Total Annual Fund Operating Expenses ("Expense Ratio") — the line of the fee table that represents the total of all of a fund's annual fund operating expenses, expressed as a percentage of the fund's average net assets. Looking at the expense ratio can help you make comparisons among funds.
A Word About "No-Load" Funds
Some funds call themselves "no-load." As the name implies, this means that the fund does not charge any type of sales load. But, as discussed above, not every type of shareholder fee is a "sales load." A no-load fund may charge fees that are not sales loads, such as purchase fees, redemption fees, exchange fees, and account fees. No-load funds will also have operating expenses.
Be sure to review carefully the fee tables of any funds you're considering, including no-load funds. Even small differences in fees can translate into large differences in returns over time. For example, if you invested $10,000 in a fund that produced a 10% annual return before expenses and had annual operating expenses of 1.5%, then after 20 years you would have roughly $49,725. But if the fund had expenses of only 0.5%, then you would end up with $60,858 — an 18% difference.
Tax Consequences
When you buy and hold an individual stock or bond, you must pay income tax each year on the dividends or interest you receive. But you won't have to pay any capital gains tax until you actually sell and unless you make a profit.
Mutual funds are different. When you buy and hold mutual fund shares, you will owe income tax on any ordinary dividends in the year you receive or reinvest them. And, in addition to owing taxes on any personal capital gains when you sell your shares, you may also have to pay taxes each year on the fund's capital gains. That's because the law requires mutual funds to distribute capital gains to shareholders if they sell securities for a profit that can't be offset by a loss.
Tax Exempt Funds
If you invest in a tax-exempt fund — such as a municipal bond fund — some or all of your dividends will be exempt from federal (and sometimes state and local) income tax. You will, however, owe taxes on any capital gains.
Bear in mind that if you receive a capital gains distribution, you will likely owe taxes — even if the fund has had a negative return from the point during the year when you purchased your shares. For this reason, you should call the fund to find out when it makes distributions so you won't pay more than your fair share of taxes. Some funds post that information on their websites.
SEC rules require mutual funds to disclose in their prospectuses after-tax returns. In calculating after-tax returns, mutual funds must use standardized formulas similar to the ones used to calculate before-tax average annual total returns. You'll find a fund's after-tax returns in the "Risk/Return Summary" section of the prospectus. When comparing funds, be sure to take taxes into account.

US SAVINGS BONDS
I Bonds
I Bonds are a low-risk, liquid savings product. While you own them they earn interest and protect you from inflation. You may purchase I Bonds via TreasuryDirect, at most local financial institutions or through payroll deduction. As a TreasuryDirect account holder, you can purchase, manage, and redeem I Bonds directly from your Web browser.
Rates & Terms
• I Bonds earn a guaranteed real rate of return. They are an accrual-type security. Interest is added to the bond monthly and is paid when you cash the bond.
• I Bonds are sold at face value; i.e., you pay $50 for a $50 bond.
Redemption Information
• Minimum term of ownership: 1 year
• Interest-earning period: 30 years
• Early redemption penalties:
o Before 5 years, forfeit 3 most recent months'interest
o After 5 years, no penalty
EE Bonds
Series EE savings bonds are safe, low-risk savings products that pay interest based on current market rates for up to 30 years for bonds purchased May 1997 through April 30, 2005*. You may purchase EE Bonds via TreasuryDirect or at almost any financial institution or through your employer's payroll deduction plan, if available.
Rates & Terms
• EE/E Bonds you purchased between May 1997 and April 30, 2005, earn a variable market-based rate of return.
• Series EE Bonds issue dated May 2005 and after will earn a fixed rate of interest.
• They are an accrual-type security, which means interest is added to the bond monthly and paid when you cash in the bond.
• Paper bonds are sold at half the face value; i.e., you pay $25 for a $50 bond.
• Electronic bonds purchased via TreasuryDirect are sold at face value; i.e., you pay $25 for a $25 bond.
Redemption Information
• Minimum term of ownership: 1 year
• Interest-earning period: 30 years
• Early redemption penalties:
o Before 5 years, forfeit 3 most recent months' interest
o After 5 years, no penalty

What's the Difference Between I Bonds and EE Bonds?

The chart below will help you understand, at a glance, the major differences between I Bonds and EE Bonds.
EE Bond I Bond
Features Issued at 50% of face value. (A $100 EE Bond costs $50.) Issued at face value. (A $100 I Bond costs $100.)
Offered in 8 denominations ($50, $75, $100, $200, $500, $1,000, $5,000, and $10,000). Offered in 8 denominations ($50, $75, $100, $200, $500, $1,000, $5,000, and $10,000).
$30,000 issue price annual purchase limit per person. $30,000 annual purchase limit per Social Security Number.
Interest Calculated as 90% of 6-month averages of 5-year Treasury Securities yields. Calculated as an earning of a fixed rate of return and a semiannual inflation rate based on CPI-U.
Rates announced every May 1 and November 1.

Please Note: Series EE bonds purchased May 2005 and after will earn a fixed rate of return. See our press release for more information. Rate Announcement: Same as EE.
Guaranteed to reach face value in 20 years. No guaranteed level of earnings.
Increases in value monthly and compound semiannually. Interest is paid when the bond is redeemed. Generally increases in value monthly and interest compounds semiannually (except in periods of deflation when the bond value could remain unchanged). Interest is paid when the bond is redeemed.
Earn interest for up to 30 years. Life span: Same as EE.
Cashing Can be cashed any time after 12 months. Same as EE.
A 3-month interest penalty applies to bonds redeemed during the first 5 years. Same as EE.
Financial institution reports interest earnings (difference between redemption value and purchase price) on IRS form 1099-INT. Savings bonds are exempt from state and local income taxes. Same as EE.
Eligible for tax benefits upon redemption when used for qualified education expenses. Same as EE.

Frequently Asked Questions
Q. Do I get to choose what fund my money is invested in with the TSP?
A. Yes. TSP has five different funds, and you decide which percent of your contribution you want to put in each fund. You can change the distribution at any time.
Q. What happens if I want to pull money out of my TSP before I reach 59½ years old?
A. You will pay a 10% penalty on the money that you withdraw, plus taxes that are owed on this money.
Q. What happens to my TSP fund if I get out of the military?
A. You can no longer contribute to the fund, but you have several options of how to handle the TSP. You can let the money sit in the TSP and earn interest until 59½. You can roll the money over to a 401k or an IRA.
Q. Can the CAO advise me on what time of fund to invest my money in?
A. The CAO must remain objective, and cannot advise you on which fund to invest your money. We can, however, point you towards many resources on which to base your decision.
Q. How do I set up an allotment for US Savings Bonds to come out of my paycheck?
A. The MYPAY website allows you to set up allotments for the purchase of Bonds.
Q. Should I mix insurance and investments?
A. No, be wary of life insurance products that are sold as or with savings or investment products.

Links

Thrift Savings Plan (TSP)
www.tsp.gov
Morningstar
(Rates mutual funds and stocks based on many different characteristics)
www.morningstar.com
Treasury Direct
(Purchase government savings bonds)
http://www.savingsbonds.gov/
US Security and Exchange Commission (SEC)
www.sec.gov
National Association of Insurance Commissioners
(more information on mixing investments with insurance)
www.naic.org/cis

Credit

Free Reports

Every individual nationwide is entitled to one free credit report each year from each of the three credit bureaus. Get yours now on www.annualcreditreport.com.

A credit file disclosure provides you with all of the information in your credit file maintained by a consumer reporting company that could be provided by the consumer reporting company in a consumer report about you to a third party, such as a lender. A credit file disclosure also includes a record of everyone who has received a consumer report about you from the consumer reporting company within a certain period of time ("inquiries"). The credit file disclosure includes certain information that is not included in a consumer report about you to a third party, such as the inquiries of companies for pre-approved offers of credit or insurance and account reviews, and any medical account information which is suppressed for third party users of consumer reports. You are entitled to receive a disclosure copy of your credit file from a consumer reporting company under Federal law and the laws of various states.

You are entitled to receive one free credit file disclosure every 12 months from each of the nationwide consumer credit reporting companies – Equifax, Experian and TransUnion. This free credit file can be requested through this website, by phone or by mail.

If free credit reports are available in your state through the Annual Credit Report Request Service, you can request a free annual credit report by phone or mail and it will be mailed within 15 days. However, you can receive a report immediately by using this secure website. Click on this link to find information on how to request a free annual credit report by phone or mail.

You are entitled to receive one free credit file disclosure every 12 months from each of the nationwide consumer credit reporting companies through the Central Source. It is entirely your choice whether you order all three credit file disclosures at the same time or order one now and others later. The advantage of ordering all three at the same time is that you can compare them. (However, you will not be eligible for another free credit file disclosure from the Central Source for 12 months.) On the other hand, the advantage of ordering one now and others later (for example, one credit file disclosure every four months) is that you can keep track of any changes or new information that may appear on your credit file disclosure. Remember, you are entitled to receive one free credit file disclosure through the Central Source every 12 months from each of the nationwide consumer credit reporting companies – Equifax, Experian and TransUnion – so if you order from only one company today you can still order from the other two companies at a later date.

The three credit bureaus are Experian, Equifax, and TransUnion. Make sure that you get one free report from each bureau, as some companies do not report to all three. If you need to contact one of the bureaus, their contact information is listed below:

• Equifax: www.equifax.com or (800)685-1111

• Experian: www.experian.com or (866)200-6020

• TransUnion: www.transunion.com or (800)888-4213
  

If information on any of your credit reports is incorrect, you will need to file a dispute in order to correct the problem and repair your credit. When you access your free credit report online, you should be given the option to dispute the information on your report. Consumer Affairs can assist you in filing a dispute as long as you save the confirmation number when you order your reports.

Under the FCRA, both the consumer reporting company and the information provider (the person, company, or organization that provides information about you to a consumer reporting company) are responsible for correcting inaccurate or incomplete information in your report. To take advantage of all your rights under the FCRA, contact the consumer reporting company and the information provider if you see inaccurate or incomplete information.

1. Tell the consumer reporting company, in writing, what information you think is inaccurate. Include copies (NOT originals) of documents that support your position. In addition to providing your complete name and address, your letter should clearly identify each item in your report that you dispute, state the facts and explain why you dispute the information, and request that the information be deleted or corrected. You may want to enclose a copy of your report with the items in question circled. Send your letter by certified mail, return receipt requested, so you can document what the consumer reporting company received. Keep copies of your dispute letter and enclosures.

Consumer reporting companies must investigate the items in question — usually within 30 days — unless
they consider your dispute frivolous. They also must forward all the relevant data you provide about the
inaccuracy to the organization that provided the information. After the information provider receives notice
of a dispute from the consumer reporting company, it must investigate, review the relevant information,
and report the results back to the consumer reporting company. If the information provider finds the
disputed information is inaccurate, it must notify all three nationwide consumer reporting companies so
they can correct the information in your file.

When the investigation is complete, the consumer reporting company must give you the written results
and a free copy of your report if the dispute results in a change. (This free report does not count as your
annual free report under the FACT Act.) If an item is changed or deleted, the consumer reporting company
cannot put the disputed information back in your file unless the information provider verifies that the
information is, indeed, accurate and complete. The consumer reporting company also must send you
written notice that includes the name, address, and phone number of the information provider.

If you request, the consumer reporting company must send notices of any correction to anyone who
received your report in the past six months. A corrected copy of your report can be sent to anyone who
received a copy during the past two years for employment purposes.

If an investigation doesn't resolve your dispute with the consumer reporting company, you can ask that a
statement of the dispute be included in your file and in future reports. You also can ask the consumer r
eporting company to provide your statement to anyone who received a copy of your report in the recent
past. Expect to pay a fee for this service.

2. Tell the creditor or other information provider, in writing, that you dispute an item. Be sure to include copies (NOT originals) of documents that support your position. Many providers specify an address for disputes. If the provider reports the item to a consumer reporting company, it must include a notice of your dispute. And if you are correct - that is, if the information is found to be inaccurate - the information provider may not report it again.

Sample Dispute Letter

Accurate Negative Information

When negative information in your report is accurate, only the passage of time can assure its removal. A consumer reporting company can report most accurate negative information for seven years and bankruptcy information for 10 years. Information about an unpaid judgment against you can be reported for seven years or until the statute of limitations runs out, whichever is longer. There is no time limit on reporting information about criminal convictions; information reported in response to your application for a job that pays more than $75,000 a year; and information reported because you've applied for more than $150,000 worth of credit or life insurance. There is a standard method for calculating the seven-year reporting period. Generally, the period runs from the date that the event took place.

Adding Accounts to Your File

Your credit file may not reflect all your credit accounts. Most national department store and all-purpose bank credit card accounts are included in your file, but not all. Some travel, entertainment, gasoline card companies, local retailers, and credit unions are among those that usually aren't included.

If you've been told that you were denied credit because of an "insufficient credit file" or "no credit file" and you have accounts with creditors that don't appear in your credit file, ask the consumer reporting companies to add this information to future reports. Although they are not required to do so, many consumer reporting companies will add verifiable accounts for a fee. However, if these creditors do not generally report to the consumer reporting company, the added items will not be updated in your file.

When you order a credit report, you will be given the option to purchase your credit score. Your credit score is used by lenders. It gives them a way to evaluate your credit history and calculate what interest rate they will give you on extended credit. There are many things that affect your score, to include payment history, how much you owe, length of credit history, new credit, and other factors. More information on your credit score is available at www.myfico.com.

Your credit score affects more that just your interest rates. For military personnel, your credit score could affect your security clearance. Your credit score could come into play when renting an apartment, applying for a new job, shopping for insurance, and determining the amount of your utility deposits.

A credit score is a complex mathematical model that evaluates many types of information in a credit file. A credit score is used by a lender to help determine whether a person qualifies for a particular credit card, loan, or service. Most credit scores estimate the risk a company incurs by lending a person money or providing them with a service –– specifically, the likelihood that the person will make payments on time in the next two to three years. Generally, the higher the score, the less risk the person represents.

You can purchase a credit score by contacting one of the nationwide consumer credit reporting companies.

• Equifax: www.equifax.com or (800)685-1111

• Experian: www.experian.com or (866)200-6020

• TransUnion: www.transunion.com or (800)888-4213

The Federal Trade Commission (FTC) cautions consumers to be wary of companies that make claims regarding credit repair. These companies, commonly called credit clinics, don't do anything for consumers that consumers cannot do for themselves at little or no cost. Beware of any organization that offers to create a new identity and credit file for you. The FTC and state attorneys general have filed actions against those who pursue these fraudulent practices. Here are some warning signs that the FTC and others say consumers should look out for to determine if they might be dealing with a credit clinic:

• An organization that guarantees to remove late payments, bankruptcies, or similar information from a credit report
• An organization that charges a lot of money to repair credit
• A company that asks the consumer to write to the credit reporting company and repeatedly seek verification of the same credit account information in the file, month after month, even though the information has been determined to be correct
• An organization that is reluctant to give out their address or one that pushes you to make a decision immediately

For a helpful brochure about credit clinics, you can and request a brochure titled "Credit Repair: Self Help May Be Best.".
Write your request to:
Federal Trade Commission
Sixth and Pennsylvania Avenues N.W.
Washington, D.C. 20004

Identity Theft is the number one crime in the United States. Identity theft occurs when someone acquires key pieces of your identifying information-such as name, address, date of birth, social security number, and mother’s maiden name, in order to impersonate you. This information enables the thief to commit numerous forms of fraud which include taking over a victim’s financial account, applying for loans, credit cards, and social security benefits, using existing credit accounts to run up charges, writing bad checks, renting apartments, buying cars, and establishing services with utility and phone companies. Soldiers can place an Active Duty Fraud Alert with each of the credit bureaus by calling or going to their websites and requesting this alert be placed on your report. This is a preventive step to control fraudulent activity.

Hitting Close to Home

Within the past year, the CAO has helped Soldier, from Fort Campbell, with the following cases:

• A Soldier returned to Iraq to find that $22,000 had been charged on his/her STAR card

• A Soldier was separated from his/her spouse, but the spouse opened up a credit card in only the Soldier’s name and charged $2500. This was not considered identity theft by the credit card company because they were still married

• A Soldier’s spouse wrote bad checks at businesses all over the Clarksville area while the Soldier was deployed
  

Q. Why do my three different credit reports reflect different information?

A. Depending on which credit bureau your creditor reports to, information will appear differently on your three reports. For example, Ford Motor Credit may report to all three credit bureaus while your credit card company may only report to TransUnion. It is best to get all three free reports to make sure that you see all possible information.

Q. If you co-sign for a loan for someone, will it appear on your credit report as well?
A. Yes. You will also be held responsible if they default on the loan, and that will be reflected on your credit report.