Credit Report

With identity fraud on the increase, the federal government is stepping up efforts to make sure businesses are on the alert — especially financial institutions and other companies that issue credit cards. The government says that businesses have the responsibility of making sure thieves don't use stolen information to buy goods or open phony accounts. And to that end, the Federal Trade Commission wants businesses that might be targets of identity thieves to develop written plans to spot "red flags" that fraud could be involved and prevent it. Starting June 1, all businesses that extend credit to customers will have to develop plans to try to prevent identity theft.

If you're thinking about applying for a home mortgage this year, here's some important news: Beginning June 1, your lender is likely to order a second full credit screening immediately before closing. The last-minute credit report will be designed to find out whether you've obtained — or even shopped for — new debt between the date of your loan application and the closing. If you've made applications for credit of any type — for furnishings and appliances for the new house, a car, landscaping, a home equity line, a new credit card — the closing could be put on hold pending additional research by the lender.

Popping the question? Money is a major cause of marital discord. So be sure to quiz your beloved about finances before you tie the knot. Specifically: Can I see your credit report? Credit reports, which can be ordered free through AnnualCreditReport.com, show how much debt you have outstanding (at least for reported loans) and whether you've paid on time. It wouldn't be surprising if two young people starting out had little on file. But it would be a warning sign for young adults to have a lot of debt or late payments.

Dear Liz: The day before my son got married, he proudly had a long-term 800-plus FICO credit score. The day after he got married, his FICO score became 600. It seems his new wife had many outstanding major debts incurred before the marriage. They live in a non-community-property state. How can he rebuild his credit either with or without a divorce? Answer: Unless your son filed for bankruptcy the day after his wedding, the scenario you describe is pretty much impossible.

Ed Myska works as executive vice president of El Segundo's Bank of Manhattan, so it's pretty fair to say that he knows a thing or two about keeping his financial house in order. Yet he was among numerous people who have been notified by Citibank in recent days that the interest rate on their credit cards is soaring to almost 30%. Letters being mailed out by Citi say only that the rate increase will allow the company "to continue to provide our customers with access to credit."

It is never too soon for folks who have given up their homes to start pointing to the day when they will once again decide to take the plunge. Whether you were able to persuade your lender to accept a payoff for less than what you owed and dump your albatross in a short sale or lost everything to foreclosure, if you start rebuilding your credit now, you may be able to buy another place in as little as two years. "We live in a credit-dominated society, making it especially critical for those with tarnished credit reports to begin the rebuilding process as soon as possible," says Gail Cunningham, spokeswoman for the National Foundation for Credit Counseling in Silver Spring, Md. It's likely that if you've been tagged by a short sale, foreclosure or bankruptcy, the rest of your credit has gone to seed as well.

For seven years, a bill collector enabled by the powerful Experian credit reporting bureau pursued Maria Pintos over a $3,000 towing bill. "They used to call me at work and threaten to ruin my good credit," Pintos, 71, said of Pacific Creditors agents who hounded her at her San Mateo County mental health department job for months after the May 2002 towing. "It was so embarrassing, because there were patients around who could hear." On Thursday, the 71-year-old Pacifica, Calif.

Hungry for revenue, a discount airline is turning to food. JetBlue Airways Corp. is testing sales of sandwiches, salads and other items on some of its long flights, including between Los Angeles and New York. Adopting food sales would expand JetBlue's retail offerings beyond movies and pillow-and-blanket sets and make it the first low-cost U.S. carrier to offer light meals for a fee. Airlines are charging for more goods and services to boost revenue from sources other than tickets.

A trio of new reports provides more evidence that small businesses, considered by many to be an engine of economic growth, could have a tough time pulling the country back to prosperity. For the first time in eight years, monthly employment at small businesses has declined, dropping by 25,000 jobs in October, according to the latest ADP Small Business Report.