Tag Archives: credit report

3 Money Mistakes Newlyweds Make

Being a newlywed is awesome. I reflect on that season of my life as one filled with joy and anticipation. Sure, that first year of marriage was full of challenges, enormous adjustments and unexpected changes, but on the whole it was great.

We found such relief in finally being married and out of engagement. Engagement is a funny time. You often take on new priorities and responsibilities you’ve never had before (like part-time event planner), and that can wear on you and the relationship after awhile. Engagement is meant to be a temporary phase in life, and most friends I know, myself included, have been thrilled to see an end to it — the lists, planning, preparation, etc. In the midst of all of the planning and celebrating, the topic of money is often overlooked (aside from the wedding budget). Yet studies tell us money is a top cause of conflict and divorce among couples. Money can be hard to talk about. Our culture has made money-talk a taboo subject, which can make it all the more difficult to start talking about money (regularly) with another person, especially if you were used to keeping your money matters private for so many years.

Here are a few money mistakes I see newlyweds make. Regardless of how long you’ve been married, though, it’s always important to check in and make sure you’re not letting the important things fall by the wayside.

1. Forgetting to Update Important Plans and Documents

When you start a job and enroll in your employer’s various benefits, you are prompted to assign beneficiaries to things like your 401(k), group life insurance, even an emergency contact in some instances. Getting married means it’s time to review these beneficiary designations.

You should also review current insurance policies and see if you need to add your spouse to the plan or review your coverage entirely. If you are both on individual health insurance plans through work, it’s worth comparing the cost of keeping your individual plans versus one of you joining the other’s plan. It’s possible you’ll save money by being on the same plan. When evaluating the cost, consider monthly premiums, deductibles, co-insurance and co-pays.

If you happen to have estate-planning documents like wills, health care proxies, living wills, etc., these documents also warrant review and updating when you get married.

2. Overlooking the Need to Get Organized

I know, it’s one more administrative thing that’s not fun to think about or act on, but it is important to be organized. If you don’t talk about it, habits will naturally form, and you’ll likely end up with unnecessary confusion and stress, which can lead to conflict. Don’t be scrappy with your finances. I survive by being scrappy as a parent (I’m a mom of two toddlers). But this ability doesn’t translate as well with finances.

Try this: Sit down and list out all the accounts each of you have and then talk about which accounts you want to join, leave separate, combine, close, etc. Simplicity is a wonderful thing. Decide which account(s) you’ll use for routine expenses, where you’ll keep your emergency savings, longer-term savings and investments. Even if you plan to keep accounts separate, have this conversation so it’s intentional and there’s no confusion about how bills and shared expenses will be handled.

You can also make your credit reports a part of this process — so you both have an understanding of each other’s credit history, and create a plan for building better credit, or maintaining your great credit if you have it. If you’re not familiar with your credit reports, you may find them to be overwhelming at first — here’s a guide to deciphering your credit report. You can get your free credit reports once a year from each of the three major credit reporting agencies, and you can get a free credit report summary on Credit.com, updated monthly.

3. Avoiding Money Talks

Money is a leading cause of conflict and stress for couples, which can be enough to discourage some people from discussing the topic at all. If you learn to talk about money early on (especially when times are good and emotions aren’t running high), you’ll be prepared when money issues arise.

Talking about money feels like creating a new habit. Sometimes you just have to start doing it, even before you’re comfortable doing so, and allow the habit to take shape.

Here are a few starting points for your conversations about money:

  • Your history with money (What lessons about money did you learn as a child?)
  • Current stress points with money
  • Goals you hope to achieve with your money
  • Expectations for your current lifestyle and how you want to use your money
  • Spending habits (Where do you spend money the easiest, with most resistance?)

A Word of Encouragement

Financial unity and stability with your spouse is a process. You don’t have to have all the answers or all of the kinks worked out from the beginning.

If you and your spouse have different approaches to money, (how you spend versus save, what you value, etc.), this doesn’t have to mean never-ending conflict. It’s possible you both need to learn to compromise, and pushing each other toward a middle ground may be the healthiest thing for both of you. And that’s one of the great benefits of marriage — the messy but beautiful process of refining each other and growing together in ways you never could alone.

This article originally appeared on Credit.com and was written by Julie Ford.

Eating the Big Data Elephant

How do you eat an elephant? One bite at a time.

What an old joke with a great premise. No matter how big the task, taking things one bite at a time makes any daunting task seem easier to swallow.

Take the big data challenge. By and large, insurance companies and traditional businesses are used to relying on paper files, mailrooms, fax machines and call centers as incoming data streams. Designed to handle internal data collected from limited sources, the systems showed their first hint of trouble with an inability to incorporate emails and SMS text messages into policyholder and claim files. Inefficiently integrated best-of-breed IT environments further complicated the issue by putting data in silos and restricting access to users.

Today, integration of systems has improved, and the move toward suites has enabled additional collaboration and data sharing benefits. However, big data, marked by its volume, velocity and variety, still has insurers stymied. And the move toward omni-channel distribution, the Internet of Things (IoT) and the connected world has amplified the need for insurers to incorporate even more data streams (both internal and external) into the risk assessment process. Cue the analytics software and reporting solutions, neither of which alone will make a legacy system more able to digest information from new data sources for rating and underwriting purposes.

Meanwhile, the big data behemoth is growing into the proverbial elephant in the room. The problem is no longer just Incorporating this data; analyzing it and acting on it are equally incomprehensible.

Buying data from traditional data sources –including motor vehicle reports (MVRs), historical flood data and credit reports on the property and casualty (P&C) side or health and medical records or test results on the life and health side is expensive. Furthermore, traditional data sources don’t allow insurers to pick and choose what may be most useful based on line of business, let alone product or policy type, geographic area or purchasing preferences.

Alternative data sources such as social data exist, but the unstructured nature of the information makes it especially difficult for insurers to internalize. Consider that today’s consumers, who are both existing and potential new policyholders, are creating mountains of data that could contribute to better risk decision making, but right now that data doesn’t make it to the underwriter’s desk. Social data is a silver bullet that can provide a predictive enhancement layer for traditional data sources, leading to more accurate underwriting and making insurers better able to select the best risks.

By breaking the traditional data collection and utilization mold as it relates to risk assessment, insurers can integrate social data with core administration systems, making unstructured social data both accessible and actionable across all industry segments and lines of business. By capitalizing on the explosion of social data as a resource for better insurance risk assessment, insurers can improve underwriting, streamline the claims investigation process, decrease loss costs and potentially make insurance relevant to a whole new generation of insurance consumer.

The scope of the big data problem is just dawning on insurers. In an effort to not bite off more than can be chewed at one time, insurers can start to consume and absorb big data by incorporating social data into rating and underwriting. But keep in mind that social data is just the first bite of a very important meal.

ID Theft: A Danger Even After Death

Take your driver’s license out of your wallet. Flip it over. Now look carefully at the back of it. There’s no box to check for “identity donor.” Yet when it comes to identity-related crimes, one of the greatest times of vulnerability is immediately after you die.

You can do everything right. You can use long and strong passwords and account-unique user names. You can check your financial accounts and monitor your credit on a regular basis, you can set up transaction alerts on your credit cards – even order a credit freeze – and then you die. Well, not entirely…

Include Identity in Your Estate Planning

A good identity thief can undo all your fraud precautions with a few phone calls. Most people don’t think about this, because it’s a wee bit late to refinance the family homestead – much less worry about interest rates – when you’re dead. Regardless, the recently deceased continue to exist on paper, and this may be the case for some time. Meanwhile, many bankable facts – key among them your Social Security number and personally identifiable information – are just sort of there in the form of “zombie” purchasing power. An identity thief can use that purchasing power to drain your bank accounts, open new credit in your name and perpetrate all sorts of fraud that can harm your family and heirs.

Think of your post-mortem identity as a would-be extra on “The Shopping Dead.” Now that you have that image in your head, take the time to arrange for the deactivation of your identity by making it part of your estate planning. This will mostly take the form of a to-do list for whomever will be handling your affairs, because nothing can be done till…well, you know, after the fact. There are many good resources, including this list from IDT911.

There are many different scams out there, ranging from the misappropriation of Social Security payments to the more old-fashioned practice of ghosting, whereby a person of approximately the same age assumes the identity of the deceased. In keeping with the proliferation of possible crimes, there are plenty of criminals out there who make a living in this post-mortem niche. They scan death notices in the local paper, read obituaries, even attend funerals and, make no mistake about it, can get a lot of shopping done with your available credit before the three credit reporting agencies and your current and future potential creditors are notified of your demise. Those same bad guys may also use your Social Security number to grab a big fat tax refund (if you’re lucky enough to pass away during tax filing season).

How will they get the information needed to commit fraud? Sometimes the perpetrator is a family member, so he already has access. But more often, family members are distracted and distraught. There are visitors who come and go, unchecked, and of course the numerous demands of making final arrangements and dealing with matters of the estate. If there was a long illness, unsupervised healthcare workers may have had the run of the deceased’s domicile – including the owner’s most sensitive information. Maybe the wake was at the deceased’s home, or people sat shiva there. The opportunities for fraud abound. Funerals, of course, provide a thief with a precise time to get what he or she wants. But instead of grabbing the television or the silver (too easy to miss), an envelope containing a financial statement or a copy of last year’s tax return might go walkabout. From there, it’s a race to apply for as much credit and buy as many pricy things for resale as possible before the money spigot coughs credit dust.

The Bigger Picture

Government agencies are famously slow to get the news of a person’s undoing.

An audit of the Social Security Administration conducted by the Office of the Inspector General found approximately 6.5 million Social Security numbers belonging to people aged 112 or older whose death information wasn’t in the system. Of those numberholders, only 13 people were still receiving payments; the rest consisted of “numberholders who exceeded maximum reasonable life expectancies and were likely deceased.” The fact that their deaths were not recorded in Numident (the SSA’s numerical identification system), and thus are also missing on the Master Death List, leaves plenty of runway for misconduct. According to the audit report, the “SSA received 4,024 E-Verify inquiries using the SSNs of 3,873 numberholders born before June 16, 1901.”

On the off chance you missed the memo while diving for sunken treasure at the bottom of Loon Lake: Identity theft is now the third certainty in life, right behind death and taxes. When a loved one passes, there is a trifecta, which is why it’s trebly important to protect against the threat of a different kind of life everlasting.

How to Remove the Roadblock for UBI

Once upon a time, the auto insurance industry relied on motor vehicle reports, drivers’ records, business addresses, financial credit reports, claims histories, policyholder-stated VIN and mileage information, etc. to make an underwriting and rating decision. This scant information provided a fuzzy picture of risk, at best, so insurers built in a pricing cushion to protect against losses and figured it all out at the end of the year.

Fast forward to today, and insurers have volumes of real-world driving data at their fingertips to inform more precise underwriting and pricing. With the proliferation of telematics devices, whether after-market or factory-installed, and mobile tracking and recording apps, we now can know where, when and how an individual vehicle is driven. We can know area and hours of operation, driving behavior, route histories, vehicle performance characteristics and much, much more. We can even re-create collisions using the data.

With data-driven usage-based insurance (UBI), we now can formulate a clear picture of driving risk and remove the guesswork. In short, we have the potential to write for a group of one, based on observable, verifiable data.

Some numbers to consider:

  • Currently nearly 30% of all commercial vehicles have some form of telematics device installed. This figure is expected to reach 70% in 2017. (C.J. Driscoll & Associates)
  • Today’s telematics devices record nearly 300 billion miles of driving data annually.
  • 94% of all small businesses report using smartphones in their businesses. (2014 AT&T-SBE Council Small Business Technology Poll)
  • Approximately 30 auto manufacturers (original equipment manufacturers, or OEMs) are busily equipping vehicles with data devices today.
  • More than 70 telematics service provider (TSP) fleet management services companies in the U.S. are equipping trucks, cars and utility vehicles with telematics.
  • More than half of small fleet managers are likely to stay with their current insurance carriers if their insurer offers UBI (Lexis Nexis’ 2015 Commercial Usage-Based Insurance Study)
  • Global sales of insurance telematics products are projected to grow at a compound annual growth rate (CAGR) of 80% from 2013-2018, and the subscriber base is expected to reach 85.5 million in 2018. (Research & Markets).

We are quickly reaching a tipping point for UBI programs that rely on data collection and analysis as the basis for a “pay how you drive” approach to auto insurance.

However, insurers looking to take advantage of this driving data face some tough questions: Where does all this data come from? How is it collected? How can different data sets be normalized? How can insurers store, analyze and manage such a huge volume of data?

The solution for insurers large and small very likely will be a telematics data clearinghouse.

Multiple Data Sources: OEMs, TSPs, Mobile Apps and More

The first problem insurers face is negotiating with 70 different TSPs and 30 OEMs for their data, which adds complexity, time and expense to the process of acquiring the driving data needed for an effective UBI program. A clearinghouse solves the problem of accessing data on millions of vehicles by aggregating data from available sources. Rather than negotiate with dozens of data suppliers, an insurance carrier merely subscribes to the clearinghouse for access to all of that data, at a single price. 

Multiple Formats: Not All Data Is the Same

With so many data sources, each using different telematics devices and software, pulling data from different types of vehicles, the aggregated data is a jumble of formats, with no two data sets the same. A clearinghouse plays a critical part in scrubbing, authenticating and normalizing this data for handoff to underwriting.

Making Big Data Digestible… One Byte at a Time

UBI represents a monstrously big IT effort for an individual insurer. With nearly 300 billion miles of driving data available, we’re talking about petabytes of data to acquire and analyze. Even the largest insurers must weigh the benefits of devoting precious IT resources to developing and running a complete UBI data collection, storage and analysis effort. In contrast, a clearinghouse is built to manage big data in a big way, delivering a clean, authenticated data set to the insurer, integrated seamlessly into the underwriting process for easy access and use.

Evolution of a Safe-Driving Scoring Standard

With access to data from millions of vehicles, a clearinghouse is also able to provide comparative analytics and calculate a fleet’s safe-driving score, the driving equivalent of a FICO financial credit score and a much more accurate predictor of risk. A complement to current driver score cards offered by many TSPs (which measure individual driving behaviors such as speeding, harsh braking and hard cornering), a fleet score factors in all drivers, as well as the vehicles they drive and the environment in which they drive. The fleet score analyzes variables including weather, time of day, road surface and traffic dynamics. An overall fleet safety score compares fleets of similar SIC codes and territories to derive an indexed score and ranking – a meaningful risk assessment and underwriting tool more powerful than anything else in use today.

Data Privacy and Protection: Permission-Based

Yet another crucial role played by a clearinghouse is data protection and privacy. Clearly, the vehicle owner owns the data generated by that vehicle in the course of a driving trip. But once it is in the UBI transaction chain, how is that data protected? Who sees it, and what is done with it? The clearinghouse serves as gatekeeper. With the consent of the vehicle owner/policyholder, the clearinghouse facilitates the secure sharing of encrypted data with the insurer, allowing the data owner to control who sees the data and why. Such protection encourages voluntary participation by vehicle owners, helping fuel the growth of UBI. 

Data Transparency and Portability: You CAN Take It with You

Data transparency and portability go hand-in-hand with data ownership. As a consent-based data sharing service, the clearinghouse offers complete transparency to the data owner. The vehicle owner knows what data is being requested and has the option of permitting or denying access. The clearinghouse allows the data owner to share his data and driving safety score with multiple insurers.

Data Clearinghouse or Data Exchange: What’s the Difference?

Aggregated driving data services are taking different forms. While all share the purpose of providing a “one-stop” storehouse of driving and vehicle data, they do not all operate in the same manner or provide the same services.

The primary distinction can be explained as an open marketplace vs. a closed system.

As an open market, a clearinghouse merely facilitates the transfer of data from vehicle owner or TSP to insurer. The insurer then underwrites a policy based on this data (and other factors the insurer deems important) and determines a policy premium. In this open system, there are no regulatory filings required; data is used in the insurer’s existing underwriting process, and the insurer retains complete control over pricing, applying credits as warranted. Furthermore, the marketplace determines the value of the data: How much is an insurer willing to pay for detailed trip histories, for example?

In contrast, an exchange uses driving and vehicle data to compute a rating and pricing recommendation for the insurer. Because the exchange is determining price, this rating system must be filed with state regulators. In this closed system, the exchange assumes the role of underwriter and pricing specialist, leaving the insurer with little room for proprietary pricing, segmentation or differentiation. The exchange controls the data and the insurance product.

Data-Driven, UBI: A Return to Profitable Auto Underwriting

UBI offers auto insurance carriers an unprecedented view of vehicle use and driving behavior. Insurers that embrace UBI and develop a data-driven underwriting and ratings process will benefit from more consistent underwriting, improved segmentation and better selection. Those that do not will likely suffer from adverse selection and an underperforming book of business.

The key to successful UBI adoption will be access to, normalization of and correct interpretation of all this data. Undoubtedly, auto insurance carriers will be hearing more about the clearinghouse concept and the pivotal role it plays in UBI.

Was Your Data Taken in Experian Breach?

A breach to one of Experian‘s servers – discovered on Sept. 15 – has resulted in 15 million compromised records with personal information like names and Social Security numbers. The breach included information about T-Mobile customers from as far back as 2013. Here are the details and action steps you can take if you think you’re a victim.

The server that was attacked housed records of those who applied for T-Mobile’s services between Sept. 1, 2013, and Sept. 16, 2015. Overall, the compromised information included…

  • Names
  • Addresses
  • Dates of birth
  • Driver’s license numbers
  • Social Security numbers
  • Passport IDs

The affected server was not part of Experian’s consumer credit bureau; nevertheless, a data breach is good reason to check your defenses when it comes protecting your personal information, and there are plenty of ways you can protect yourself.

Make sure hackers didn’t steal your information and use it for their advantage. Annually check your credit reports and bank statements for suspicious activity, like a new line of credit or purchases you didn’t make.

Be cautious! When a breach like this occurs, fraudsters may call the victims and say they’re from the affected companies. They may ask you for your personal information, so they can “help” you. Keep in mind that T-Mobile and Experian made it clear that they will not send a message or call and ask for personal information connected with the incident.

Consider some of the major data breaches we’ve had in the past couple years:

  • JP Morgan Chase – 76 million customer records
  • Anthem – 87.6 million
  • Home Depot – 56 million
  • Target – 110 million

Whether or not you think you’re a victim, employing an identity theft protection plan is relevant and important.

Ironically, T-Mobile is offering resolution services through Experian’s ProtectMyID, for those who were affected by the data breach; however, full, continuing coverage demands an identity protection service that has more robust features than those provided through the complimentary membership.

ProtectMyID’s complimentary membership includes SSN and credit-card monitoring, but you also need monitoring for high-risk transactions and data sweeps. ProtectMyID includes credit monitoring and an Experian credit report upon entry, but you also need your credit score and identity risk score (showing how vulnerable you are to identity theft). ProtectMyID has lost wallet/purse assistance and alerts for suspicious activity, which is good. It is backed by $1 million identity theft insurance coverage, too, but you also need coverage that will reimburse you for the expenses you incur while returning your life to normal. ProtectMyID has fraud resolution agents who can offer assistance to victims, but you also need a financial consultation, a legal consultation and more.

You need stronger layers of protection against identity theft, help creating an action plan and professional assistance with addressing compromised information and accounts.

The Experian data breach is a big reminder of how a robust identity theft protection plan is absolutely necessary.