Most individuals will deal with a collections agency at least once in their lifetime. For many, this might be the present, and this is as bad of time as ever. What is certain, is that having to deal with an account in collections is about the last thing anyone would want to endure. The process can be stressful, and the experience can leave one feeling like they have been taken advantage of. The following are examples of extreme collections techniques that are both unethical and unlawful. They serve as worse case scenarios, however, but they are useful in highlighting the methods by which collections agencies regularly and aggressively pursue debtors, should you find yourself in such a position.

A long time ago in a galaxy far away, I was a victim of identity theft. At first, I thought it was a poorly constructed joke by family members (haha, we got you, BillShrink Guy!), but the situation turned out to be real enough and the identity theft became a real hassle to resolve.

Though I have taken certain precautions during that time to protect my identity, I’ve since realized that there are additional steps I could have taken. Here are five ways you can immediately protect your identity:

1. Ditch any unnecessary personal information or passwords in wallet or purse

Ever carry around that little slip of paper with passwords to certain accounts? Get rid of them. If you also carry your Social Security card with you in your wallet, you should remove it and place it in a safe location. If may be convienient to have these information around when you need them, but placing all your sensitive personal information in one place makes it a gold mine for identity thieves — you simply run the risk of giving it all away when you accidentally lose your wallet or have it stolen.

2. Safeguard your Social Security number

Simply put, your Social Security number provides a quick access into your identity. It is not a number you should give away freely or carelessly.

There is no law preventing businesses from asking you for your Social Security number, but you should take note that many times, you can simply say no when a business ask you for your numbers (granted you may not be able to use their service). Legitimate need for your Social Security number from businesses are those that have transactions dealing with taxes, thus banks, brokerages, employers are likely candidates.

Any businesses that request for your Social Security number should be able to give a legitimate, reasonable answer in why they need your number. If they can’t or won’t provide you with the information, consider not doing business with them.

3. Be safe with your paper mails

This goes beyond preventing that pesky neighbor from stealing your monthly magazine subscription. You should always empty your mailbox quickly as to prevent a thief easy access to personal information. If your mailbox can’t be changed into a lockable one due to silly housing association rules, consider using a postal office box if you receive frequent mail with sensitive information.

If you’re going on vacation, consider placing a vacation hold on your mail. You can do this by going to USPS’s website. This will prevent an accumulation of your mail, often a sure-sign that a household is away. If need be, ask a trusted friend or relative to come pick up your mail,and clear away any accumulated newspaper subscriptions while you’re away.

4. Use online account services

If you’re comfortable with online access, having an online account at your bank or credit card’s official site can come in handy spotting suspicious or erroneous transactions and activities well before you get your monthly statement. This allows you to immediately request more information from your bank so that they can investigate any potential identity theft issues.

You should also consider switching to paperless statements. This reduces additional paper mail with personal information that you’ll need to shred or stored away carefully. This option works best for those that can take the additional steps to safeguard their computer and is comfortable with banking online.

5. Check your credit report regularly

All of us are entitled to a free credit report annually from the three major credit reporting agencies at AnnualCreditReport.com. Spread these free credit report request through out the year, requesting a copy from one agency in January, another in May, and finally the last copy in September.

If you see accounts or activities that you don’t recognize in your credit report, take immediate action and contact the creditor in question or the credit report agency for more information.

I have a paid subscription with one provider that monitors my score. However, I am unhappy with this provider and wondering if you have a list of recommended providers. I am very particularly interested in with one who can deal with all three credit bureaus on my behalf instead of just one that my current subscriber that associates with. One other thing. No one has a good answer on the ranking of three major bureaus. One say Equifax score is lower than other two, TransUnion and Experian, it uses a tougher criteria. Another one said Equifax in the middle with TransUnion below while Experian is above. Please set the record straight.

Thanks much in advance. – John

John’s question: What are some good credit score monitoring providers and why are some credit scores higher than others? Do credit scores “rank” differently?

Brief need to know credit terms:

FICO credit scores: FICO scores are a type of credit score provided by a company called Fair Isaac Corporation (hence the FICO score naming — yes, very original). It is the most widely used credit score model in the United States, and it is a proprietary model developed by Fair Isaac.

FAKO credit scores: Dubbed by the online credit communities, FAKO scores are all other credit scores that’s not a FICO score from Fair Isaac. Because FICO scores are one of the most widely used score by lenders, it can be at times pointless to rely on other “fake” credit scores derived by other credit reporting/monitoring company. For example: XYZ company may say your credit score is an excellent 800 (out of 850), but that will be a moot point if no lenders in the world trust XYZ company or use their score as a means of assessing creditworthiness.

Credit reporting agencies: The three major credit reporting agencies in the United States are Experian, Equifax, and TransUnion. Each of these agency collects your credit information through different methods and various sources to help lenders assess your credit worthiness. You should note that not all lenders or creditors will report your credit activity to all the credit reporting agencies.

What are some good credit score monitoring providers?

Since we’ve differentiated FICO credit scores from FAKO (all other) credit scores, your choice in credit score monitoring depends on your prefence in knowing an accurate picture of your credit worthiness or only a general guideline. I recommend a mixture of using various services, as it can get quite expensive if you actively purchase a FICO score from Fair Isaac.

If you want FICO scores, you can purchase the legitimate score straight from Fair Isaac at myFICO.com. They currently have a credit monitoring service call Score Watch, but this unfortunately only provides monitoring for one credit reporting agency, Equifax. Score Watch monitors your credit report at Equifax on a daily basis and your FICO score on a weekly basis. The service cost $8.95 per month, or annually at $89.95 per month. If you do a quick Google search for “myfico discount” or check this myFICO promotional code page — you will generally be able to find discount codes that will save you 10% to 20%.

If you just want a general guideline for your credit, you can try the free service CreditKarma.com or Quizzle.com. CreditKarma provides a score based on your TransUnion credit report, while Quizzle provides a score base on your report from Experian. Although both of these scores are not FICO scores, they can give you a general idea of where you stand in terms of your credit worthiness. If there are large changes occuring, you can always purchase a FICO score and report from myFICO to see what may have caused the change.

Don’t forget that each of us are entitled to a free credit report from each credit reporting agency per year from AnnualCreditReport.com. Although these are not score monitoring service (they only provide a report), they can act as a means to monitor your credit profile through the year — simply request a credit report from one different agency every 4 months. Example: Request Experian in January, request TransUnion in May, and request Equifax in September.

Do credit scores from different bureaus “rank” differently?  Why are some credit scores higher than others?

Credit scores from different bureaus actually don’t rank differently from one another. The differences you see from the score are due to numerous reasons. As mentioned earlier, there are three different credit reporting agencies. Because each of these credit reporting agencies uses different methods to get your credit information, you may have different credit information presented on your credit history from each agency. Besides the potential different source of credit information, at times, some creditors may not report your credit account to all three credit reporting agencies.

For example, my credit card account at my local credit union is only reported to Equifax and not to the other credit reporting agency. This account is one of my longest history credit card account and it is a positive account that isn’t being reflected in other credit reports — because of this, my Equifax FICO score is much better than my FICO score from Experian or TransUnion.

Whenever you have a large gap in differences from one FICO score to the next (30+), this may have happened due to missing information of a large positive and/or negative account. As with positive credit accounts, you may occasionally have a defaulted, or late payment riddled credit account that’s reported to one agency, but not the others.

Besides missing potential positive and/or negative accounts, there are also chances for other errors showing up in one agency’s report but not the others. According to Public Interest Research Group, 25% of the credit report surveyed contained serious errors such as false delinquencies or accounts that do not belong to the consumers.

Due to all these different factors and the imperfection in the system, credit scores can often vary from one agency to the next, sometimes having small differences in score, even though there are no discrepancy from one credit report to the next. Talk about making it confusing for consumers!

If you’re a savvy consumer, consider using some of the services mentioned above to actively check on your credit report and credit score. If you see a large change in your credit score since you’ve last checked — and you haven’t make any large credit decisions such as acquiring new loan or paying off a large debt — you should definitely get a copy of your credit report from all three credit reporting agencies and check if there are any problems or mistakes.

Send Us Your General Personal Finance Questions!

If anyone else reading has further input on this edition of “Ask BillShrink Guy,” please chime in by leaving a comment.  If you have a general personal finance related question, feel free to Ask BillShrink Guy!

Your questions will be answered in the order they are received.  You can also use the comment section in this blog post to ask your question.  Please be aware that we may modify or edit your question for brevity and your privacy!