Why Identity Theft Can Wreck Your Credit Score

Identity theft means that someone has access to and takes advantage of your personal and financial information to make purchases, file taxes, and open new accounts. This can happen in different ways, may be your online bank account was accessed or hacked, you lost your wallet, or your employer lost personal or financial details in data breach. In any case, urgent measures are required on your part to protect your identity and keep your information secure and safe.

How to Identity Identity Theft

– Multiple Account Inquiries

– Opening New Accounts

– High Balances on Existing Accounts

There are other red flags and warning signs that you may be a victim of identity theft. If you see multiple withdrawals from your bank and credit card accounts that you can’t explain, it is a good idea to check with your bank immediately. You may want to check your credit report on a regular basis as well. If you find suspicious or unfamiliar charges or accounts, this may be a warning sign, too. You may be a victim of identity theft if debt collection agencies contact you about outstanding balances that aren’t yours. Check your account if retailers refuse your checks. If you don’t receive mail and bills on time, this is yet another warning sign. There are other ways to identify identity theft and minimize damages. If you didn’t use services and still receive bills by medical providers, you must contact your financial institution immediately. The same goes for legitimate medical claims that get rejected by your healthcare provider because you’ve already reached the limit. If a condition or disorder you don’t have shows on your medical records, then it is either a mistake or you are a victim of identity theft. Cons take advantage of tax returns as well. For example, if there are multiple tax returns that were filed on your name, this is definitely something to worry about. The same is true for income, commissions, or additional income from an employer you never worked for. A notice that your personal or financial information was compromised is a red flag that someone has access to your details.

Why Identify Theft can Hurt your Credit Score

There are obvious ways in which identity theft can hurt your credit score and ability to access different types of credit. If someone has access to your accounts and exceeds your limit or makes late payments, then your credit score may plummet. The same goes for new accounts, multiple inquiries, and excessive debt in your name. Identity theft can have a negative impact on your score if cons empty your bank account and leave you with no cash to pay bills, your card balances, car payments, mortgages, rent, and utilities such as gas, phone, and electricity. Utilities cannot hurt your score directly, but if they go to collections, then your may suffer. High-tech con artists may steal your mobile phone account and use it to make long overseas calls. This is called phreaking and as a result, you will be left with a hefty phone bill to pay.

What You Should Be Doing

Obviously, what you should be doing is reclaiming your identity as fast as you can to avoid further fraudulent activity. Take immediate steps by contacting your financial institution and cancelling all credit accounts that you have with them. The next step is to file an identity theft report and complaint to inform the authorities so that they take appropriate action. You may want to go to the local police department to file a report. Filing a report is useful in that this will stop collection agencies and creditors from trying to collect debts that aren’t actually yours. A report will also stop fraudulent activity from appearing on your report. Make sure you talk to your creditors and other financial institutions you do business with and ask what can be done to sort out your finances. Make sure you tell them that con artists may have access to your social insurance number as well. Finally, you may want to call the major credit bureaus and discuss the problem with their fraud divisions. They are tasked with placing fraud alerts in case suspicious or fraudulent activity is taking place. In this case, you will ensure that con artists cannot open new credit accounts unless you give your direct consent. You are free to do this even if you are not a victim of fraud or identity theft.

Identity theft is a serious crime and should be dealt with immediately to prevent further financial losses and negative impact on your credit report. There are identity theft protection solutions that are worth investing in.

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