Insurance Centre

What is an ITIN?

An ITIN is assigned by the Internal Revenue Service (IRS) to individuals who are not eligible for a Social Security Number (SSN) but have earned taxable income. You can apply for an ITIN when filing taxes or when opening a savings account in the United States. ITINs are nine digit numbers, similar to the SSN, that begin with the number 9 and are generated to be used as identification for tax purposes.

Aside from tax payments, an ITIN can also be used to access financial services. Some banks may take the ITIN as part of your identification when you apply for a bank loan or credit card. However, there are limitations to the use of an ITIN from a legal standpoint. The ITIN cannot replace a Social Security Number (SSN), especially when it comes to working rights. The placement of on ITIN on work documents constitutes fraud.

Using an ITIN to Build Credit

Many financial institutions will accept an ITIN as a form of identification to apply for loans and credit cards. By using your ITIN number to apply for loans or credit cards you can begin to establish a credit history in the United States.To make sure that your records get reported correctly with credit reporting agencies, it is important to understand how the agencies operate. The three largest credit bureaus, TransUnion, Experian, and Equifax, compile a person’s credit history by obtaining information from their creditors such as credit card companies and financial institutions.

They use personal information, such as an SSN, birth date, address, and full name to compile a credit report for each individual. An SSN is a unique number and helps the agencies recognize and verify identity when receiving personal credit report information from

creditors.

When the bureaus receive credit information about an individual with an ITIN number it is possible that they will utilize a combination of their name and address to verify their identity. Therefore, if you are building a credit history with an ITIN number, be sure to always use the same spelling and your full name each time you apply for credit. For example, if Carlos Diaz opens a credit card with Chase and then opens a credit card with Citibank as Carlos Ramon Dias, there may be confusion. The credit agencies might create two different

credit reports – one for Carlos Diaz and one for Carlos Ramon Dias. In addition, each time you change your address it is best to update it with each creditor to ensure that information from your creditors is reported correctly.

Tip: Tax season is a great time to apply for your ITIN. Many free tax preparation sites for lower income individuals will help you apply for free.

Sources:

www.irs.gov

www.nedap.org

There are an equal proportion of people who keep a close eye on their credit report and credit score and those who don’t. Some of them would have been shocked to find a hefty credit amount, only after they lost the source of income or had limited means to make the payment. If you are one of them, scrutinize the details in the credit report and go for a credit repair.

Credit report can be obtained from one of the consumer reporting companies like TransUnion, Equifax or Experian once a year. Once you get a free copy of this report, analyze it minutely and pick up the incorrect transaction or credit statement. Send a letter to the consumer reporting company, raise a dispute for the incorrect items and demand for a credit repair. The consumer reporting company verifies the dispute and checks it against the records available in the credit card company. However if the legal complications are not easy to understand it is recommended to refer a credit counseling agency.

Credit counseling is a debt help solution extended by non profit organizations to repair your credit score. They help you eliminate the incorrect items from the credit report and reorganize it to set the credit score correctly. This debt help solution is not only sought for credit repair but for upgrading the financial know how as well. Credit counselors dedicate ample time to understand your fiscal status, loan taken, the secured or unsecured debt you owe, total income of the household, your budget planning etc. They help you restructure the budget and handle debt better, also recommending debt management program if required. They choose either online session on internet, on phone or in person to communicate with their clients. The training is mostly in the form of guidelines and instruction documented in handouts or presentations.

While searching for debt help, make sure the credit counseling is provided free of cost and there is no pressure to join any of their extended programs. Several scammed companies claim to eliminate your debt completely or improve your credit score remarkably, do not get carried away by such advertisements. If a fee is associated with the service, pay only after the goal is achieved. Non profit organizations need not be free of cost or perfectly legitimate, so a careful search is strongly recommended.

Probably the best way to protect yourself from identity theft is to place a security freeze on your credit profile. A “credit freeze” or “security freeze” is a notice placed on a consumer’s record that prohibits reporting agencies from revealing the individual’s private information to third parties without the express consent of the consumer. Most lenders will not issue credit without first pulling a consumer’s credit report. If an identity thief manages to steal your social security number and other private information, he or she will be unlikely to get a loan if your information is barred from review. Most lenders require a credit pull before they will extend credit, so if a hold is in place, your information will not be available to lenders when an identity thief goes to take out a loan in your name. A security freeze provides an effective barrier to credit, loans, and services being approved in your name without your authorization.

How to get started

Send a certified letter to each of the three major bureaus. (mailing addresses below)
Provide your address, social security number, date of birth and full name (including Jr., Sr., II, III, etc.). If you have moved during the past 5 years, include your previous addresses. Provide a copy of a telephone or utility bill to verify your address. Include a copy of your driver’s license or government issued identification. Your first request is free. If this is not your first request, include a check for $10.
How to lift the freeze

In response to your certified letter, the bureaus will send you a confirmation response that will include a pin or password. To lift the freeze you will need to provide: proper identification, your pin or password and the information about the specific party who is to receive the information OR the time period that you want the hold to be lifted. It will also cost $10-$12 each time that you lift the freeze. Retain the letters that you receive from Equifax, Experian and TransUnion because they will provide specific instructions regarding what to do when you need to allow access to your profile. Remember that you will still be able to check your own record for inaccuracies.

You can write to the three major credit bureaus using the following addresses:

Experian Security Freeze

PO Box 9554

Allen, TX 75013

Equifax Security Freeze

PO Box 105788

Atlanta, GA 30348

TransUnion Security Freeze

PO Box 6790

Fullerton, CA 92834-6790

Copyright

If you are in the process of refinancing your mortgage you might find the process confusing and intimidating. No one likes to overpay for their purchases and your home loan is no exception. Here are several tips to help you refinance your mortgage without paying too much.

Before you start comparison shopping for a new lender it is worth your time to request copies of your credit reports to check for errors. Your credit score is what lenders look at when determining your mortgage rate; if you have mistakes or negative information in your credit history it will cost you a higher interest rate. Your credit records are maintained by three separate reporting agencies that don’t share information well; you’ll want to request a credit report from each agency and carefully check it for errors.

There are three companies you need to request records from. These credit agencies are Trans Union, Equifax, and Experian. It’s easy to request these records and free; congress recently passed a law stating these agencies are required to give you one free credit report each year. The website you need to visit to download your credit history is annualcreditreport.com.

Once you’ve reviewed your credit records and are confident they are error free you’re ready to being comparing loan offers. Choosing the correct lender is an important part of refinancing and there are several types of lenders you need to avoid. The three types of mortgage lenders are banks, broker-banks, and wholesale lenders. You should never consider refinancing with your bank due to loopholes in the Real Estate Settlement Procedures Act; however, I’ll cover banks and broker-banks in depth later in this article.

Refinancing your mortgage with a wholesale mortgage lender will give you the best deal for your money; the question becomes how do you go about finding a wholesale lender? Because the average homeowner does not have access to wholesale lenders you’ll need to use a broker to refinance with wholesale mortgage rates. Refinancing with a mortgage broker has many advantages; although you’ll need to watch your broker like a hawk to avoid paying too much.

For approximately the past two years the mortgage industry has provided personal information to other lenders and partners when a consumer applies for a loan. I know this is shocking. I was just as shocked as you are when I found out. As soon as the ink dries on your mortgage application your information is sold to other lenders. In one or two days your phone starts ringing off the hook with calls from other lenders trying to offer you a better deal. This process is called a “trigger lead.”

When your credit report is pulled by a mortgage lender or broker the lender’s request for your credit report triggers an alert which informs the 3 major credit bureaus, Experian, Equifax and TransUnion that you are a potential lead looking to purchase a home or refinance your existing loan.

The credit bureaus sell these trigger leads to lenders and brokers who have subscribed to the service and provide them with a list of potential candidates who are looking for a loan and meet the lenders criteria for a loan.

Experian has a trigger lead service called Prospect Triggers that can pull out all of the consumers from the Experian consumer database that fit a lender’s credit criteria such as consumers who have never filed for bankruptcy or consumers who have a certain credit score. Information such as the number of credit cards a consumer possesses and contact information such as applicant name, address and telephone number is provided.

I feel this is a violation of privacy. Companies feel that because you list your personal information on an application they have the right to contact. I rarely get unsolicited phone calls but I recently received a call from a telemarketer and asked the caller why companies feel that they have the right to contact a consumer simply because they have access to a consumer’s contact information. I also informed the caller that I only give my phone number to people I wish to speak to which does not include telemarketers and requested that my contact information be removed from their call list and third party call lists.

Many mortgage industry staff believe trigger leads are helpful for lenders and brokers. However, I believe a customer would get a better deal if they shopped around for various offers. When a lender or broker already has some basic information about you they can develop a plan to their advantage and although the deal may sound good it may not be the best deal for you. If you comparison shop you have the upper hand because you can ask specific questions related to the type of loan you are looking and then make a decision about what company you want to do business with without feeling pressured by constant calls from lenders and brokers.

When your credit report is pulled for a lender or broker you can request that they do not enter your telephone number which may reduce telemarketer calls. However, they are phone matching programs available that can be used before the trigger leads are sold. Also as long as they have your SSN they can match up your name, address and phone number.

The sad part about this is the credit bureaus provide trigger leads to lenders and brokers and also provide consumers with opt out services. The credit bureaus make their money upfront by quickly selling your information so by the time you opt out your information has been sold many times over making them rich.

Remember when applying for a loan or filling out any application that requests your personal information immediately ask the following questions:

1. What security measures are in place to protect my personal information?

2. How the company experienced any security threats or attacks and if so how were they handled?

3. What is your privacy policy? Ask for a copy of the privacy policy or how it can be obtained online.

4. I elect to leave the SSN field blank do you have another unique number that can be used to identify me.

5. If I end my business relationship with the company how long is my personal information stored in the company database?

6. What is the method for obtaining my personal records when I end my business relationship with the company?

7. What procedures are in place to protect customer information if the company goes bankruptcy or merges with another company?

To reduce telemarketer calls register your telephone number at http://www.donotcall.gov or call 1-888-567-8688. Comparison shop on sites like http://www.bankrate.com. Research a company by calling the Better Business Bureau or Department of Commerce. File a complaint against the company with the Federal Trade Commission or your state Attorney General’s Office if you feel the sales tactics used are unprofessional or deceptive.