An Interview with Curtis Arnold
Arkansas native Curtis Arnold is founder of U.S. Citizens for Fair Credit Card Terms, Inc., and is one of the most widely quoted credit card analysts in America today. Curtis is regularly interviewed by The Wall Street Journal, Smart Money Magazine, CNN, National Public Radio, the major television networks and numerous other print publications. He attended Ouachita Baptist University for his undergraduate work and both the University of Arkansas at Little Rock and the University of Texas at Dallas for his graduate work.
Online Little Rock: Curtis, why is it important for our readers obtain their credit reports and credit scores?
Curtis Arnold: Credit reports are an important part of many credit scoring systems. It is very important that people make sure that their credit reports are accurate before submitting any type of credit application (including credit cards). Some experts estimate that as much as 50% of credit reports contain at least one inaccuracy. That why many consumer advocacy groups recommend obtaining a copy of your credit reports at least once a year to prevent fraud and to insure that your report is accurate.
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O L R: You mentioned fraud. This would be identity theft, right?
C. A.: Yes, we tend to live our lives as though bad things always happen to someone else and, yet, identity theft is the number one reported problem at the Federal Trade Commission. Most identity theft occurs locally through lost or stolen credit cards, financial statements thrown in the trash and simply not being aware of how easy it is to be financially violated.
Financial institutions and credit card issuers have taken major steps in the past few years to lessen the possibility of identity theft. Most transaction receipts now include only four digits of a person's account number. Credit cards have three-digit confirmation codes on the back. But statements still go through the mail and into the trash with a person's name, address and complete account number.
O L R: Most accounts have some sort of fraud protection like you not being responsible for unauthorized charges. Wouldn't people be able to discover that by reading their statements and taking action?
CA: Sure. But identity theft goes deeper than someone taking $50 or $100 from your account as a one-time theft. They can use your information to apply for other credit accounts in your name using a drop box mailing address. That would not show up on any current statement a person receives.
It would show up on your credit report, though. That's just one reason it's important for people to get copies of all three of their reports. Most people who actually get copies only take advantage of the annual free reports, and those free reports have only been available for a little over a year now.
O L R: You mentioned that watching out for identity theft is just one reason for getting copies of credit reports. What would be some other reasons?
CA: Mistakes made by other people. You mentioned the employee who entered your name wrong showing up on your report that you had used two different names to apply for credit. Maybe a typo by someone showed your credit limit to be $1,500 instead of $2,500 for an account while your outstanding balance was $1,600. That would tell a financial institution that you do not manage your money very well since your report would show you being consistently over your limit when, in reality, you're not.
O L R: How would this affect your cherished credit score?
CA: Your payment history, total outstanding debt, types of outstanding debt, how long you have had credit accounts and newly opened accounts are used in determining your credit score. Any error affecting any of those areas will affect your credit score. Earlier we talked about identity theft and someone using your information to open new accounts. Those newly opened accounts could easily force your score lower.
And, think about this. What motivation does the thief have to pay those bills? The account is not in his name. He doesn't care if the account goes into collection. It's your credit score that will plummet, not his.
Read more about how you can obtain free credit report on an annual basis from each of the three major credit bureaus.
