Identity Theft and Your Credit Report: What to Know

If you have been contacted by a credit collection company demanding payment for your dues when in fact you faithfully pay your bills on time, chances are you have been a victim of identity theft. Identity theft is most likely to be uncovered when a person was turned down for new credit due to low a credit score, when in fact that person has been diligent and prompt in meeting payments. Another instance is when you have received a credit card in your mailbox which you have not applied for. These instances, according to Privacy Rights, are indications that you have been a victim of identity theft. While you may be indignant from such a trespass on your person, identity theft incidents can happen without your knowledge. Such a situation will negatively affect your credit score. If you have been a victim of this crime or you want to be spared from this dilemma and you want to save your credit report, here are some insights for you.

Effects of Identity Theft on Credit Report

When someone else uses your identity to apply for a credit card and then racks up the bills without paying for them, it will definitely affect your credit score. For someone who pays bills diligently, you will end up with a tainted reputation as far as your finances and borrowing capacity are concerned. You will have to convince credit report agencies that you have been a victim of identity theft. Aside from that, you will have to ask these people to remove the erroneous data from your credit report. Financial author Jerri Ledford said, you will be left to clean up the mess. When erroneous information (purchases someone else made using your account) are stacked and unpaid under your name, your credit report will appear ugly. This will affect your ability (or inability) to borrow in the future.

Your Rights Against Identity Theft

If you have become a victim of identity theft, you can protect yourself by invoking the rights available to you under the Fair Credit Report Act. As explained by a Credit Report service, some of your rights under this law are:

The right to obtain free copies of your own credit report. If you have been alerted of identity theft under your account, you are entitled to obtain a copy of your credit report so you can review all the information in that report. You can check the theft damages from any of the three credit report agencies. You can also check the erroneous charges on account of the identity theft. As a victim of identity theft, you are likewise entitled to two free copies of your credit report one year from the date you were alerted of identity theft. This right will help you check if someone changed your home address or applied for new bank accounts under your name.

The right to place fraud alerts on your credit file. This right will empower you to make a request on the three credit report agencies to indicate fraud alerts on your credit file. This indication will inform future creditors that you were a victim of identity theft. This alert serves as additional safeguard for you from future identity thefts. Scheming people will have a hard time using your identification in making purchases if your alert is up on file.

The right to block identity fraud from your records. You need to have some proof though. You need to provide the credit reporting agency with the specific information that gave rise to this fraud, your proof of identity, and a copy of the identity theft report. Once the credit reporting agency approves your block request, no establishment notified of your block may sell, assign, or collect the debt from you. 

Tips on Avoiding Identity Theft

The Federal Trade Commission has provided some tips in safeguarding your name and reputation from identity theft:

1. Tear or destroy financial information before you dispose of them.
2. Safeguard your Social Security number. Hide this information in your personal files. Do not carry put it in your wallet or jot it on a check.
3. Refuse to disclose your personal information on phone, internet, or mail transactions unless you are absolutely sure of the person you are dealing with.
4. Do not click on window pop-ups in your computer. Protective measures like anti-virus software can help you avoid this.
5. Refrain from using simple and transparent passwords for your accounts, such as your birth date, your mother's maiden name and similar information.

Tips on Managing Identity Theft

If unfortunately, you have been victimized by an identity thief, here are some tips to help you expedite managing your credit report:

1. Inform and alert credit report agencies.
2. Keep an eye on your credit report and see if someone has changed your personal information.
3. Freeze your credit file. This will prevent others from using your name.
4. Close fraudulent accounts. This includes accounts you have opened but have been tampered.
5. File a report of identity theft with your local police and the Federal Trade Commission.