Who gets the credit for identity theft?
In one fell swoop, or one foul swipe, an identity thief can simply destroy your credit score.
Piling up unpaid bills, all in your name, the crook can quickly decimate your financial reputation. You may not even realize this is happening, until you apply for a loan, try to purchase a new car or home, or interview for a job.
What’s your credit score?
Your credit score, or credit rating, is a universally accepted measurement of your eligibility to receive financing.
A high credit rating indicates you have demonstrated fiscal responsibility in the past and are likely to continue to do so. This makes you a good risk for a financial institution, a prospective employer, a home buyer, an automobile purchaser, or an insurance client. Your credit rating may determine what loans you may be able to obtain, credit cards you may hold, and interest rates you may be asked to pay.
A poor credit rating is considered a red flag, signaling a high probability of financial irresponsibility or defaulting on a mortgage or loan.
Once a poor credit score is assigned, it can be extremely difficult to erase it.
What is identity theft?
Someone steals your name, your credit card number, or your Social Security number and begins racking up bills. You may not even know it, until a bill collector contacts you, or the bank freezes your accounts. You may even be arrested for fraud or other crimes the identity thief actually committed.
It may take months to restore your solid credit rating and your own good name. In the meantime, you may miss out on important opportunities: college grants, job placements, automobile loans. Even your health and life insurance may be affected, if the thief obtains medical care in your name.
Where did the crooks get your identifying information in the first place?
Clever criminals grab confidential data by stealing wallets and purses, intercepting mail, confiscating personnel records, nabbing numbers off charge slips, and even rummaging through trash bins. Copying account numbers from invoices and receipts is a favorite ploy. Posing as telemarketers or telephone bankers, they may even ask you directly for your data.
The internet has created new opportunities for these crafty folks, who may hack into unsecured sites or set up false companies to obtain your statistics.
What do thieves do with your confidential information?
Essentially, an identity thief attempts to set himself up as you. Using your personal information, a thief may change your mailing address to divert your monthly billing statements to himself. Most likely, posing as you, he will apply for credit cards.
He may do the same with an apartment lease, utility and cable TV services, internet providers, and more. He may obtain a home or cellular telephone and ring up unpaid charges on a delinquent account. The crook may take out a car loan or even a home mortgage all in your name. In the worst cases, the identity thief may even obtain a driver’s license, obtain welfare or other government benefits, and file a tax return (or fail to do so) all to your discredit.
Of course, when the bills remain unpaid, your credit rating will plummet.
How can you prevent identity theft?
Guard your personal information carefully. Shred identifying documents before trashing them. (We even remove address labels from magazines and catalogs before recycling them. We also toss the enclosed order forms containing our address and account information.) Tear up promotional credit card offers.
Check your billing statements every month. Audit these carefully, and report any unknown charges. If you fail to receive a regular bill on time, contact the issuing company immediately.
Be alert for any unexpected invoices, charge accounts, or other unanticipated legal or financial issues.
Destroy credit cards you do not use regularly, and close out any dormant accounts.
Check your credit status regularly. (You can do this online by contacting any of the major credit reporting agencies. In the US, these are: Experian, Equifax, and TransUnion.) If you notice anything amiss, work with these credit bureaus to correct it. Report anything you do not recognize. Cancel any credit accounts that are listed, if you did not open them yourself.
Keep careful files, and document everything!
If you detect identity theft, file a police report immediately. This will place an alert on your credit rating and a lookout for the thief. The next time he charges anything or files for credit, he may be caught. An Identity Theft Report will be filed, which will greatly improve your chances of clearing up your credit rating.
If you have a good name, then keep it to yourself!