What You Didnt Know About Your Credit Card Numbers

Have you ever really looked at your credit card and tried to figure out what that huge string of numbers really means? Do these card issuers have so many customers that your account number has to be 16 digits long?

You may be surprised to know that all those numbers you see actually do stand for something, and it's not just who you are. Let's take a look.

Most of the major credit card companies operate on the same system when choosing a credit card number. Other cards like gas cards, department store cards and phone cards go their own way. Let's concentrate on the ones that all play by the same rules.

The very first digit in the series will be a 3,4,5, 0r 6. This number designates the type of card as follows:

3 = a Travel & Entertainment Card like American Express or Diners Club.

4 = Visa and Visa-branded debit cards, cash cards, etc.

5 = MasterCard and MasterCard-branded debit cards, cash cards, etc.

6 = Discover

American Express and Diners Club use the second digit to identify the company. That means that Diners Club cards will start with either "36" or "38", and American Express cards will use either "34" or "37".

The remaining numbers in the series are used for different purposes depending upon the card type and issuer.

In most cases, the next group after the opening series of numbers represents the routing number of the card-issuing bank, the group after that is the user's account number, and the final digit is a check digit. The check digit is a number that is calculated by applying a special formula to all of the other numbers. The check digit is the result of that formula and is used as an anti-fraud check.

To keep things from getting too confusing, look at your card as you follow along for the next steps.

American Express

The American Express Card uses digits three and four for type (business or personal) and the currency of the cardholder's country of origin. The next digits from the fifth through the eleventh are account numbers.

Digits twelve through fourteen indicate the card number within the account and the last digit is the check digit.

Visa

With Visa, digits two through six represent the bank number. Beginning with the seventh digit and running through the twelfth or the fifteenth represents the account number and the last number is the check digit.

Since all Visa cards do not have the same amount of numbers in the sequence, the number of digits in a group may vary.

MasterCard

For MasterCard, the second digit, through to anywhere between the third and the sixth digit is the bank number. All remaining digits, except the check digit at the end of the series, identifies that cardholder's account.

Now that we've gone over it all, you're probably wondering why you were ever wondering in the first place. Just remember though, knowledge is power. Some things are just fun to know.

By Ewen Chia

Your Credit Rating and How To Check It

There is a lot of confusion surrounding UK credit ratings, credit scores, credit blacklists, credit reports, and credit files. This guide to your credit rating aims to give you the facts you need.

What's in a Credit File

There are two major credit reference agencies in the UK, Equifax and Experian, who maintain credit files on virtually every adult in the country.

Almost all companies that give you credit terms will supply information to one or both of these two credit agencies.

Therefore, your credit file is likely to contain information on all your existing credit and loan arrangements, such as personal loans, mortgages, credit and store cards, bank accounts, etc. In addition, your credit record will contain information on any late or missed payments and the amount of the original debt still outstanding.

The credit reference agency files also contain electoral roll information for your address and court records relating to you. It is this information which allows prospective lenders to confirm your address and also see if you have any outstanding CCJs (County Court Judgements).

Whenever a mortgage lender or other company is assessing an application for credit, they will check the details held on you by Equifax and/or Experian. The reason they do this is because, by law, they are not allowed to request any information about you from any other companies with whom you have a credit agreement.

Also, by contacting one of these two agencies they can gain access to your entire credit history with just a single request rather than having to gather the information from multiple sources.

Each time a lender makes a search of your credit file, that search will be recorded and added to your file, leaving a credit check "footprint". Therefore, it is easy for a prospective lender to see if someone has been "shopping around" for credit, and this in itself could be a deciding factor in whether or not they agree to give you a mortgage.

Your credit file will also include details of other people living at your address if they are financially linked to you, or if the credit reference agencies think they are financially linked to you. In this way, other people's bad credit history can sometimes drag down your credit score. But if you find you are wrongly linked to another individual, you can write to Experian and Equifax and ask them to correct the mistake.

How can I see my credit file and correct any mistakes?

Under the terms of the Data Protection Act, the credit reference agencies Equifax and Experian are required to provide you with a copy of the information they hold on you in return for a small administration fee. At the time of writing (2004) the fee for each agency is £2.

Your details are supplied by post, but you can request a copy of your file by telephone, post or email. Details or how to apply can be found on the Equifax and Experian websites.

Remember that because some companies supply information to Equifax, some to Experian, and some to both, you will need to order copies of your file from both agencies in order to get a full picture of your credit record.

Alternatively, there are online services that will allow you to undergo a free credit score check, as well as download (for a fee) a copy of your full credit report.

If, after having obtained a copy of your credit file, you find that it contains errors, you can take the matter up with Equifax and/or Experian and ask them to correct the mistakes. Full details of the procedure for correcting your file are available on the companies' websites and are also sent in the post along with the copy of your credit file.

Credit scores, credit ratings, and credit blacklists

First of all, let's dispel a popular myth.

A lot of people think that there is a "blacklist" you can end up on if you have a particularly poor credit history, and that if you are on this list you will automatically be refused credit.

This is simply not true - there is no such thing as a credit blacklist. If you have been refused a mortgage or other form of credit, the reason will be because your credit score was not high enough.

When a lender requests information about you from a credit reference agency, they apply a mathematical formula to that information in order to give you a credit score. Different lenders will use slightly different factors to create the score.

Also, the definition of a good or acceptable score will vary from one mortgage lender to another. Therefore, it is quite possible to be turned down by one lender but be accepted for a mortgage by another.

Given that you are potentially worsening your credit score every time you approach a lender about a mortgage and they run a credit check on you, and given that different lenders will have different criteria for assessing your credit worthiness, it makes sense to talk to the experts right from the start if you are looking to take out a mortgage but suspect you may be hampered by a poor credit record.

If you're worried that a poor credit record may affect your ability to obtain a mortgage or remortgage, you should take the time to find a mortgage adviser who specialises in finding mortgages and remortgages for people with credit problems.

------

By David Miles

Choosing A New Credit Card

1. Choosing A new credit card



There are many reasons for choosing a new credit card.



It may be your first card or you may wish to reduce the amount of interest you're paying each month or if you're lucky enough to pay off your balance each month you may wish to take advantage of one of the many reward schemes around.



To help you choose we have compiled a set of questions and answers. One thing to consider is that you need more than one new card. For example if you have an outstanding balance and use still make purchases you should consider switching to a balance transfer card for the outstanding balance and a seperate card for the ongoing purchases. This is provided you pay off the ongoing purchases of course.



2. What To Ask - Standard Questions



Scenario : You pay off your existing balance each month Solution : Choose a reward scheme card. These will either pay be cash or may be points that can be used to purchase certain products.



Scenario : You have an outstanding balance but still make ongoing purchases Solution : Transfer the existing balance to 0% balance transfer card and at the same time get an introductory purchase offer card. This way you can allow the introductory purchase card balance to build up, while you pay off the balance transfer card. You need to be very disciplined with approach though. If you have taken up a balance transfer then try to avoid new purchases on this card as repayments are weighted towards the lower interest part of the balance.



Scenario : You have a large purchase coming up Solution : Apply for an introductory purchase card and then pay off the balance over the period of the offer.



Scenario : You have a poor credit history Solution : There are some high interest cards around for people with a poor credit history. If you do obtain one of these cards then make sure you always make your repayments. This way you will slowly build up your credit rating, which will eventually make the lower interest cards available to you.



3. Can your existing card be improved



This is one option that most people completely ignore. It is entirely possible that you may be able to negotiate a new rate on your card, especially if you have another card with a lower rate. They can only say no, so what have you got to lose.



4. Should I close my existing card



Not neccessarily is the answer. You may be able to use this card in the future for a balance transfer. Also, don't forget that you normally get around 58 days interest free credit. So you may be able to make the odd one-off purchase and spread the cost over a couple of months.



5. Finally ...



Please remember the golden rule. Only borrow what you can avoid to borrow. If you are careful you can make the credit cards work for you, but if the credit card companies make a lot of money out of people allowing the spending to get out of control. Don't allow yourself to be one of these people.



By Neil Brown

Clean Credit Report: Easily Raise Your Credit Score 100 points

Clean Credit Reports, your credit report contains information about where you work, live and how you pay your bills (On time or not). It also may show whether you've been sued, arrested or have filed for bankruptcy with in the last 10 years. Companies called consumer reporting agencies (cra) or credit bureaus compile and sell your credit report to businesses all over the world.

Clean Credit Reports, many financial advisors suggest that you periodically review your credit report for inaccuracies or omissions. This could be especially important if you're considering making a major purchase, such as buying a home. Checking in advance on the accuracy of information in your credit file could speed the credit-granting process, clean credit is a must.

Because businesses use this information to evaluate your applications for credit, insurance, employment, and other purposes allowed by the Fair Credit Reporting Act (FCRA), it's important that the information in your report is complete and accurate.

Whenever you apply for any type of credit or financing, a credit report is pulled from at least one of the three major credit bureaus. You want a clean credit report to be pulled. While there are hundreds of smaller credit bureaus around the country, virtually every credit bureau is affiliated with either Experian, Trans Union, or Equifax.

Getting Your Clean Credit Report

If you've been denied credit, insurance, or employment because of information supplied by a credit reporting agency, the FCRA says the company you applied to must give you the agency`s name, address, and telephone number. If you contact the agency for a copy of your report within 60 days of receiving a denial notice, the report is free. In addition, you're entitled to one free copy of your report a year.

If you simply want a copy of your report, call each credit bureau listed since more than one agency may have a file on you, some with different information.

The three major national credit bureaus are:

Equifax, P.O. Box 740241, Atlanta, GA 30374-0241; (800) 685-1111.

Experian (formerly TRW), P.O. Box 2002, Allen, TX 75013; (888) EXPERIAN (397-3742).

Trans Union, P.O. Box 1000, Chester, PA 19022; (800) 916-8800.

Correcting Errors For Clean Credit.

To protect all your rights under the law and to keep your credit clean contact both the CRA and the information provider.

First to get clean credit reports, tell the credit reporting agency in writing what information you believe is inaccurate. Include copies (please keep your 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 you dispute, state the facts and explain why you dispute the information, and request deletion or correction. Always keep copies of your dispute letter.

They must reinvestigate the items in question, usually within 30 days, unless they consider your dispute frivolous. They also must forward all relevant data you provide about the dispute to the information provider. After the information provider receives notice of a dispute from the CRA, it must investigate, review all relevant information provided by the CRA, and report the results to the CRA. If the information provider finds the disputed information to be inaccurate, it must notify all nationwide CRAs so they can correct this information in your file. Disputed information that cannot be verified must be deleted from your file, then you will recieve a clean credit report, with that item removed.

If your report contains erroneous information, the CRA must correct it(clean credit).

If an item is incomplete, the CRA must complete it. For example, if your file showed that you were late making payments ( 30 days or more), but failed to show that you were no longer delinquent, the CRA must show that you're current.

If your file shows an account that belongs only to another person, the CRA must delete it.

When the reinvestigation is complete, they must give you the written results and a free copy of your clean credit report, if the dispute results in a change. If an item is changed or removed, they cannot put the disputed information back in your file unless the information provider verifies its accuracy and completeness.

Also, if you request, they must send notices of clean credit report corrections to anyone who received your report in the past six months. Job applicants can have a corrected copy of their clean credit report sent to anyone who received a copy during the past two years for employment purposes. If a reinvestigation does not resolve your dispute, ask the CRA to include your statement of the dispute in your file and in future reports.

Second, in addition to writing to the credit angency, tell the creditor or other information provider in writing that you dispute an item. Again, include copies (please not originals) of documents that support your position. Many providers specify an address for disputes. If the provider then reports the item to any credit reporting angency, it must include a notice of your dispute. In addition, if you are correct that is, if the disputed information is not accurate the information provider may not use it again, thus you will have a clean credit report.

When negative information in your report is accurate, only the passage of time can assure its removal. Accurate negative information can generally stay on your report for 7 years.

Clean Credit: There are certain exceptions:

Bankruptcy information may be reported for 10 years.

Information about criminal convictions may be reported without any time limitation.

Credit information reported in response to an application for a job with a salary of more than $75,000 has no time limit.

Information about a lawsuit or an unpaid judgment against you can be reported for seven years or until the statute of limitations runs out, whichever is longer. Criminal convictions can be reported without any time limit.

Credit information reported because of an application for more than $150,000 worth of credit or life insurance has no time limit.

Adding clean credit accounts to your file:

Your credit file may not reflect all your clean credit accounts. Although most national department stores and all-purpose bank credit card accounts will be included in your file, not all creditors supply information: Some travel, entertainment, gasoline card companies, local retailers, and credit unions are among those creditors that don't report clean credit.

If you've been told you were denied clean 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 CRA to add this information to future reports. This will help get you on the road to a clean credit report. Although they are not required to do so, many CRAs will add verifiable accounts for a fee. You should, however, understand that if these creditors do not report to the CRA on a regular basis, these added items will not be updated in your file.

Useful Tips On Avoiding Credit and Charge Card Fraud

Credit and charge card fraud costs cardholders and issuers hundreds of millions of dollars each year. While theft is the most obvious form of fraud, it can occur in other ways. For example, someone may use your card number without your knowledge.

It's not always possible to prevent credit or charge card fraud from happening. But there are a few steps you can take to make it more difficult for a crook to capture your card or card numbers and minimize the possibility.

Do:

Sign your cards as soon as they arrive.

Carry your cards separately from your wallet, in a zippered compartment, a business card holder, or another small pouch.

Keep a record of your account numbers, their expiration dates, and the phone number and address of each company in a secure place. Keep an eye on your card during the transaction, and get it back as quickly as possible.

Void incorrect receipts.

Destroy carbons.

Save receipts to compare with billing statements.

Open bills promptly and reconcile accounts monthly, just as you would your checking account.

Report any questionable charges promptly to the card issuer.

Notify card companies in advance of a change in address.

Don't:

Lend your card(s) to anyone.

Leave cards or receipts lying around.

Sign a blank receipt. When you sign a receipt, draw a line through any blank spaces above the total.

Write your account number on a postcard or the outside of an envelope.

Give out your account number over the phone unless you're making the call to a company you know is reputable.

Reporting Losses and Fraud If you lose your credit or charge cards or if you realize they've been lost or stolen, immediately call the issuer(s).

Many companies have toll-free numbers and 24-hour service to deal with such emergencies.

You may freely reprint this article provided the author's biography remains intact:

By John Mussi

How to Avoid Credit Card Late Fees

Everyone hates late fees and being late will cost you dearly these days. For some credit cards today, if you are late, you will have to shell out as much as $40 each time. This can put a nice sized hole in your pocket really quick.

Below, I will provide you with some tips and strategies on how to steer clear of those monstrous late fees. This will not only save you a lot of money in the long run, but it will also keep those money-hungry credit card companies, I won't mention any names, from getting your hard earned money.

Just pay your bill. One of the easiest ways of avoiding a late fee is to just pay your bill each and every month by sending in a check, money order, or other type of payment to your respective credit card issuer. Just make sure you follow the numerous guidelines, which are usually outlined on the back of each credit card bill, on how to send in your payment. These guidelines must be followed precisely if you want to guarantee that your payment will go through on time.

Payment guidelines may include everything from a specific payment address to the time of day by which the payment must be received to be credited that day. Many issuers also stipulate that payments must arrive in the preprinted envelope sent to the customer.

While the Fair Credit Billing Act requires issuers to credit payments the day they are received, each issuer is allowed to set specific payment guidelines. If any of the guidelines are not met, the issuer can take as many as five days to credit the payment.

An on-time payment could easily become late during that five-day period, so follow those payment guidelines carefully.

Just skip the payment. One of the more rare types of methods you hear of are Skip-A-Payment services. You can use these services to skip mortgage, credit card, or loan payments. Usually you would need to get in contact with your bank just to see if you even qualify or not. There are also independent companies out there that will allow you to do the same thing, no matter what bank you are a member of. Depending on whose service you use, the fee's associated with it vary. When you use these types of services make sure you know how much you will be charged then decide if it's worth it or not.

Pay minimum due immediately. One of the best ways to prevent a late fee from being charged to your account is to pay the minimum due immediately. As soon as you receive your bill, send in the minimum due. This will always insure that your credit card issuer received payment. You can always send in more money later if you decide otherwise. This is a great way to avoid missing a payment because if you forget to send extra money you can guarantee that you won't be charged a late fee because the minimum due has been already been paid.

Move your due date. Are your credit card bills due at a time of the month when you're running low on cash? Many people have trouble saving money, so when it comes time to paying their credit card bills, they don't have any cash to do so. One particular solution is to move your due date. Many credit card issuers will allow you to set your own due date to meet your specific needs. If you have trouble saving money, move your due date to a time when you do have money, like as soon as you get your paycheck. If you time your credit card bill to come the same day you get paid, you will always have cash to pay the bill.

Pay by phone. If you are one of those people that wait to the last minute to do everything or if you just forgot to send in your credit card payment early enough, you could always pay by phone. This guarantees that your payment will be on time. Just supply the representative on the other line with your checking account number and your bank routing number, which is printed at the bottom of each check. Usually the routing number is first and the account number is second. A lot of issuers allow you to pay by phone and some will charge you a pretty penny for doing so. Fee's can range from $5 to $20.

Use other express methods. If your bank does not offer a "pay by phone" service and you need to get your payment to your credit card issuer as soon as possible, I recommend either sending your payment in by express mail or by Western Union. Either one of these services can get your payment to your credit card issuer immediately. These express methods are costly, but it will always most likely be cheaper than any fees associated with being late. Make sure you send your express payment to the proper address. Many issuers have separate payment addresses for express payments. The last thing you want to do is slow the processing of an express payment by sending it to the wrong address.

Daryl Flagg

Secured Credit Cards- Consumer Tips

Whether you have no credit or damaged credit, secured credit cards are a good tool for building a good credit history.

Several months ago Tom, a member of CreditBoards.com, filed for a Chapter 7 Bankruptcy. Now he is in the process of rebuilding his credit history. It's a task that is not easy, but with patient persistence he is seeing progress already. Daily he checks his credit score and is slowly seeing improvement.

1 - In addition to correcting every mistake, even the smallest ones, on his credit report, he is using a secured credit card.

2 - This secured card is an important tool in the overall process of building or rebuilding credit.

Who should consider a secured credit card?

Someone who has no credit history.

Someone with a damaged credit history.

What is a secured credit card?

Secured cards are credit cards opened with a deposit into a savings account, money market or certificate of deposit. The amount of deposit required varies from card to card, but generally minimum amounts range from $250 - $500. These funds are considered your security and will even earn a little interest since they are being held in a savings account. Your credit limit is determined by the amount you deposit into the savings account. Sometimes the limit will be for the full amount of the deposit; other times it will be a percentage of the total.

It is important to keep in mind that a secured card is a credit card, not a debit card. If full payments are not made each month, then interest is charged on the outstanding balance. And the lending institution uses the security money to pay off the debt only as a last resort. Even though the card is secured, it is still possible to damage credit.

What are the benefits of a secured credit card?

Establishing credit. If you have never had a credit card, a good first step in establishing good credit is applying for a secured credit card. Assistant Professor of Economics at Austin Peay State University in Clarksville, TN, Jerry Plummer says, "A secured card is most useful for the person starting out on their credit history, since it says that the person is willing to take the extra step to establish credit."

Reestablishing credit. If your credit history is damaged, you may only be able to qualify for a secured credit card. Using this secured card appropriately and within the set parameters will help rebuild your credit and qualify you for an unsecured card. If you have had to file for bankruptcy, however, you may not qualify until it has been discharged.

Preset limit cannot be exceeded. If poor spending habits were part of the cause for bad credit, then a secured credit card will help keep spending in check.

Useful for transactions that require a credit card. Hotels and car rentals require the use of a credit card. If you don't qualify for an unsecured card but you do for a secured card, then you are still able to make the transaction.

What should I look for or avoid when shopping for a secured credit card?

Fees. This is the area you will really want to research when shopping for a secured credit card. Some cards will come with fees that run into the hundreds of dollars, eating away much of the credit you secured with the savings account. Professor Plummer says a card with no fee is the best, but a small one-time fee can be okay. Annual fees for attractive secured cards typically range from $20-$35. Be sure to watch out for hidden fees such as "registration charges" and "setup fees."

Interest Rate. Just because you have no or poor credit doesn't mean you have to settle for the highest interest rate. Interest rates for attractive secured cards should not exceed 19%. Shop around and get the most competitive rate available.

Read the fine print. Linda Tucker, Director of Education for Consumer Credit Counseling Service for Arkansas and Memphis, TN, stresses the importance of reading the fine print. Doing so will let you know your exact obligations to the issuing company: for example, the grace period, what happens if you don't make a full payment, and what fees are attached if you don't make the full payment. Understanding these details will help make sure you are not further damaging your credit.

Fraudulent Offers. As with unsecured cards you need to watch out for fraudulent offers.The Federal Trade Commission gives the following advice to protect yourself from credit card fraud:





Offers of easy credit. No one can guarantee to get you credit. Before deciding whether to give you a credit card, legitimate credit providers examine your credit report.



A call to a '900' number for a credit card. You pay for calls with a '900' prefix -- and you may never receive a credit card.



Credit cards offered by "credit repair" companies or "credit clinics." These businesses also may offer to clean up your credit history for a fee. However, you can correct genuine mistakes or outdated information yourself by contacting credit bureaus directly. Remember that only time and good credit habits will restore your credit worthiness.





When will I qualify for an unsecured credit card?

It can take several months to see an improvement in your credit history. Bankrate says it's a good indicator when you start receiving flyers in the mail for unsecured cards that your credit is improving. However, it's a good idea to continue taking things slowly. Using a secured card will help you learn healthy habits so that when you do get an unsecured credit card you remain in control of your spending and credit.

Where can I find a secured credit card?

Most companies don't advertise secured cards. But you can visit the Card Reports section of http://www.CardRatings.com to find out where and how to apply. Click on the link entitled "Cards for Consumers with Poor or No Credit".

Other tips

Tom recommends sticking with only one or two cards and keeping spending to a minimum. The goal is to pay the card off each month.

Tucker emphasizes the importance of paying the amount due each month; otherwise late fees can be charged, interest rates raised, privileges lost, and credit history negatively affected.

Make sure you are getting a credit card as opposed to a gas card or a department store card.

Make sure a reputable bank or credit union, even a local one, is issuing the card. And, don't automatically assume a bank is issuing the card.

Not all issuers report to the three major credit agencies (Experian, Equifax, and TransUnion). It's important to get a card that does report to all three agencies; otherwise you will be wasting your time. Fortunately, secured cards normally report to the credit agencies just like unsecured cards (you should verify this before applying).

If you have filed for bankruptcy, you may need to wait until it has been discharged before qualifying for a secured card.

Get one only if you cannot get credit, since you have no credit record; or if you have poor credit. Plummer says, "Many companies will not even count them as credit, such as automobile F&I (Finance and Insurance) people, although they will not admit it." So, if you don't really need a secured card, you will be doing more harm than good.

Finally, whatever situation you are in, no credit or poor credit, the best way to build good credit is to set up a budget and then stick with it.

1 You can pay membership fees to any one of the three credit bureaus - Experian, TransUnion, and Equifax- to be able to check your credit score online daily. Visit our Credit Information section for more details. Tom recommends purchasing Microsoft Money 2004, which comes with a one-year membership to Experian (value of $99.00).

2 To find out more about correcting errors on your credit report, read our article How to Correct Mixed or Split Credit Reports.


Amy Cooper-Arnold