Arizona takes a step backward in the fight against identity theft

The Arizona Senate voted yesterday to reject a bill that would implement mandatory jail time for identity thieves. Arizona leads the nation with the highest rate of identity theft cases according to an FTC report. Instead of focusing on identity theft as a serious crime that needs to be punishable with jail time, Arizona politicians are deciding to "wait and see."

At the same time, the Arizona Senate voted to approve mandatory jail time for people who steal cars and trucks. Current law allows a judge to place the thief on probation. The proposed change sets a one year minimum jail time or three year minimum for repeat offenders.

Listen up thieves of Arizona...It's time to switch from stealing cars to stealing identities. Your state Senators have spoken.

Love & Credit: More wacky Valentine's Day financial news

Valentine's Day credit and financial news continues to roll in from across the World Wide Web. Already today we learned that poor credit can be an impediment to love and that financial compatibility is crucial to relationships. What other weird credit news is out there for us this Valentine's Day? Here's a quick summary:

• Credit card company, Discover, reports that men say they will spend an average of $128 on Valentine's Day gifts this year.
• The National Retail Federation predicts that $14 billion will be spent on Valentine's Day by Americans this year.
• BBC News reports that fraudsters are using Valentine's Day e-cards to infect computers and steal identities.
• Cheaters beware: Private investigators report that Valentine's Day is a good time to catch a cheating spouse by checking their credit card statements for undelivered gifts.
• Just in time for Valentine's Day, a House committee voted to approve a bill aimed at protecting online date seekers from fraud and identity theft. 
• A pair of sweethearts celebrating their 70th Valentine's Day together recommend avoiding overspending. "[Couples today] go in debt too far right off the bat, and they have financial problems."

Whew! I guess love and money really do go hand in hand. I can't wait to see what kind of financial news we will see related to President's Day early next week! Imagine the headlines:

• "Abraham Lincoln: One of America's founding credit reporting agency correspondents" (it's a true story)
• "Which US president has the best credit score?"
• "Abraham Lincoln turned down a loan request for $80 and advised his stepbrother on debt management" (also a true story)
• "Should presidential credit reports be made public like other financial records?"
• "George Washington's papers reveal information about his financial standing"

Submit your ridiculous President's Day credit headlines and story suggestions in the comments section below or by sending CreditBloggers.com an email.

Decoding a detailed phishing scam

There's a must read article about phishing online at the Washington Post today. Security Fix blogger, Brian Krebs, dissects a detailed and highly sophisticated phishing attack involving the Mountain America credit union in Salt Lake City. This spear phishing attack includes masked credit card numbers that appear to be real (only the first five numbers appear, all of which are the same on any Mountain America credit cards).

What made this scam unique is that the fraudsters even applied for and received a Secure Socket Layer (SSL) encryption certificate (much like a VeriSign certificate) for their fake website. So even if you were suspicious enough to investigate the site's authenticity, you would probably determine that it was not a phishing scam. Click here to read more details about this sophisticated phishing case.

Love & Credit: Is a good credit score needed for successful relationships?

The Valentine's Day credit connection just keeps getting weirder and weirder. We all know that financial matters play an important role in the success of relationships...but does credit really impact your ability to love? If you read the San Francisco Chronicle or browse the news today, the answer is yes. According to a recent survey by myFICO, money can actually buy you love. Their financial survey reveals today that:

• Americans are twice as likely to choose financial responsibility over sexual compatibility as the most important personality traits in a relationship.
• A third of respondents said that a lack of financial responsibility hurt their relationship more than being unfaithful, un-affectionate or humorless.
• Friends recommend that you learn about a new love's humor, jobs and credit problems before entering into a relationship.

I've never asked a person I've dated about their credit score...but perhaps I am behind the times here. Maybe credit scores are going to be the new must-have statistic to include in your personal ad. "SWM, 35, Non smoker, no kids, credit score 750, loves tennis." Click here to read the full bizarre report on how financial behavior impacts relationships. Happy Valentine's Day!

The impact of credit on your love life

According to a San Francisco Chronicle article, the following was overheard at the Saucelito Art Fair recently:

"I love you, but your credit's not that good.'' (Man on cell phone)

Now, if that doesn't give you a good reason to check your reports and credit scores on a regular basis...I don't know what will!

Valentine's Day Myth Busting: What happens to your credit when you get married?

Happy Valentine's Day! In honor of Cupid's holiday, CreditBloggers.com is debunking a common romance-related credit myth this morning. I can't even count the number of times that panicked fiancés have emailed me to ask:

"What will happen to my credit reports and scores when I get married? Will my credit history merge together with my spouses credit records?"

The answer is simple: nothing automatically happens to your credit reports when you get married. Your credit reports and credit scores will remain independent even after you have joined your hearts together in matrimony.  There are two exceptions to this statement: 1) If you change your name after the wedding, your new last name will be posted on your credit reports. 2) If you open any joint or co-signed accounts with your spouse, these records will be reported on both your credit reports. 

Although your credit reports will not automatically merge together, your general finances will be tied together after you are married. To avoid any newlywed issues be sure to discuss your financial standing and money management style with your sweetheart before the wedding. Openly communicating about your finances is key to a happy and healthy relationship!

Breaking out of the payday loan cycle

Payday loans can be an expensive proposition. A payday loan is a small loan (maximum $500-$1,000) that does not require a credit check. Payday loans have short terms and must be paid back quickly,   usually within a few pay periods. Payday loans are marketed as a way to help you cover your expenses until your next paycheck. Also called "check cashing", "payroll advance" and "deferred deposit," these loans offer a fast way to access emergency money. 

Payday loans are much more expensive than other ways of borrowing money.  With interest rates averaging 400% APR (and sometimes as high as 5,000% APR) a payday loan can become a major debt problem if not paid off immediately. This morning we received an email from someone who is dealing with payday loan issues first hand:

I am in a mess. I have gotten into debt with two different payday loan places and owe them both around $1,000. I owe a friend $200 and my paychecks are only $800.00. These payday loan places are messy and the fees mount up. How am I supposed to pay this off?

The trick to using payday loans is to pay back the money you have borrowed immediately. As soon as you miss the first repayment period (usually after two week) you debt will start to grow rapidly. Breaking the payday loan cycle may require desperate measures. Try cutting back on your expenses by carpooling, riding your bike to work, shutting off cable TV/internet access and avoiding other less important charges. Also, try increasing your income by having a yard sale, selling some items online or picking up some extra work.

Do whatever it takes to pay off your payday loan debts right away. It is the only way to break out of the payday loan cycle. You can read the truth about payday loans online here.

New credit card feature: Instant approval

The process with most credit card applications goes as follows: you find an offer online or in the mail that appeals to you. You submit your application. You wait a few days to hear back or receive the new card in the mail. It's admittedly a bit slow for this modern digital age.

Citibank has recently started offering "Instant Approval" when you apply for a few of their select credit card offers. When qualified applicants with good credit apply online, they can receive an approval notice back from Citi in a few seconds. Citibank is offering this on their Gold AAAdvantage World MasterCards, Platinum AAAdvantage World MasterCards and Professional Cards.

Is there a downside? Not really. There is no disadvantage to getting your approval notice back in a few minutes instead of a few days. Just keep in mind that you will not receive the actual card in the mail for a while even though the approval is instant. Also, be careful not to rush into opening new accounts that you may not really want to keep open for a few years.

Invisible credit records: What happens when good credit exists but is not reported to the credit bureaus?

Credit reports and credit scores can work in mysterious ways. A move that you think will help increase your credit score can actually decrease it. A janitor may have a better credit score than a billionaire. A person who thinks that they have great credit may have no credit at all. Last week, we received an email from someone with a credit mystery:

I am having a problem getting a new credit card. They say that I don't have enough credit. I own my home and I have had my vehicle for over a year. I also have one credit card issued by my personal bank but I can't seem to get another line of credit. Why? What can I do about this?

To solve this mystery, we first need to look for some clues. Channel Inspector Clouseau! The author reports that she owns her own home and only has one credit card from a local bank. There is a good chance that she does not currently have any loans or credit card reporting to the three credit bureaus (Equifax, Experian and TransUnion). Small banks often do not report credit card accounts to the credit bureaus and it sounds like there may not be active loan records either.

With no credit information being reported, a borrower is viewed as a higher risk to potential lenders. Lenders and creditors use credit records to predict how potential borrowers will act. With no records, they assume that the applicant will be a risky borrower and will therefore charge a higher rate or turn them down for new accounts. The author should check her credit reports to see if she has a "thin file" (aka: no records). If this is the case, mystery solved!

Luckily, this is an easy problem to fix. Simply opening a new credit card and using it responsible every month can help boost the borrower's credit scores significantly. A secured credit card or a card that accepts borrowers with no credit are good choices when trouble being accepted for other accounts.

National Consumer Protection Week on Credit.com

As National Consumer Protection Week comes to a close, let's take a look at the identity theft and fraud topics that the team of credit experts have covered on CreditBloggers.com this week:

• Predatory lending
• VISA security policies
• The Anti-Phishing Working Group
• Credit card skimmers
• Links to consumer protector resources
• The prevalence of Social Security numbers on driver's licenses
• Single-premium credit insurance scams
• Types of identity theft crimes
• Mailboxing crimes in Colorado
• Identity theft within families
• Internet and telemarketing fraud statistics
• Secure, study and shred
• How to prevent check washing
• How posting resumes online can lead to identity theft
• Preventing identity theft in the military
• Guarding against mail fraud
• Free Consumer Action Handbooks from the FTC
• Credit repair scams

Whew! That's a lot of identity theft and fraud blogging! Are there any other topics you would like our experts to cover beforethe end of National Consumer Protection Week? Did we miss anything? Share your feedback and suggestions in the comments section below.