Identity theft is a very serious issue facing consumers. It has exposed over 179 million credit files in recent years. It is also very difficult to avoid because thieves use highly sophisticated technologies. However, there are steps you can take to minimize becoming a victim.
Hackers steal personal information through financial institutions, schools, government offices and corporations. Your identity is likely out there, somewhere. But how does identity theft affect your credit report? What can you do to protect yourself? Can lawsuits be filed against anyone? We’ll answer all these questions and more!
What is “Identity Theft?”
Identity theft involves a thief stealing personal information. The thief may obtain a social security number, driver’s license, and date of birth. Sometimes they can also obtain a credit card and banking information.
Some identity theft cases occur through family and friends because they already have the victim’s information. Most cases involve thieves using modern tactics targeting victims.
With personal information in hand, a thief can then attempt to open credit accounts.
How Does Identity Theft Affect a Credit Report?
It is not the act of identity theft that affects a credit report. It is rather what the thief does with the stolen information. They typically start by applying for new credit accounts which will report credit inquiries. These inquiries begin to lower a credit score.
Approved accounts then start reporting under the victim’s name. The thief may also increase balances on existing accounts. Such actions cause the credit score to continue lowering.
With unpaid accounts growing several months old, collections accounts start reporting.
Accordingly, credit scores will significantly lower.
Minimizing the Effects of Identity Theft!
Thieves go to great lengths to obtain personal information. Unfortunately, it is difficult to completely prevent identity theft. Taking the following actions can protect your credit score:
- Credit Monitoring. Credit monitoring sends immediate emails and text messages when there is a change to a credit file. Protecting a credit file requires quick action because it must be stopped at the early stages.
- Refresh Credit Reports. Review credit reports every 30 days through credit monitoring. Reacting quickly to identity theft is very important! Every 12 months you may also obtain a credit report at no cost.
- Security Freeze. Creditors will not offer any new credit because they cannot access the credit file. This will ensure that an identity thief can’t open new accounts. It’s easy to place a “freeze” on a credit file by contacting the credit bureaus.
- Security Alerts. A security alert requires a creditor to call a specifically provided phone#. If a thief tries to open a fraudulent account, it will be denied. That is because the creditor will call you to confirm the application.
- Passwords. Make sure passwords are not easy to guess. Remember to not use the same password for every site and never give your passwords to anyone.
- Personal Information. Do not send personal information such as social security numbers through email. Also, do not provide any personal information to anyone over the telephone.
What If Someone Has Already Stolen Your Identity?
It is important to quickly take the following action:
- File a report with the Federal Trade Commission (FTC).
- File a report with your local police department.
- Mail a dispute letter to the credit bureaus.
- Mail a dispute letter to the creditors that approved new accounts.
How Long Will Identify Theft Affect a Credit Report?
7 years is the typical reporting period for negative accounts (except for bankruptcies which are 10 years). But it doesn’t mean it needs to stay on for this long. Tackling the identity theft can remove these accounts within several weeks.
A Consumer Attorney Can Help You!
Consumer attorneys specialize with identity theft files. They may be able to get your credit back on track. Identity theft victims may also be provided with free legal services.
Creditors and credit bureaus act unlawfully by continuing to report fraudulent accounts. This is especially true if you’ve provided them with notice. At this point, it may be time for you to speak with an attorney.