Identity Theft and Your Credit Score

You've heard some of the horror stories.  Maybe actually heeded the warnings and put some more safeguards into place. God forbid you've been a victim, but identity theft plagues more than 10 million people suffering more than $5 billion dollars of loss. And it's not just the monetary loss. There's the countless hours of reinstating, recreating, reconstituting your life that can takes years, and still not be the way it was before. Identity theft is a very real threat, and one of the worst damages it can perpetrate is on your credit score.

Most identity theft involves financial theft using your data, and when this data gets updated by the lenders your credit reports will show a lot of new and interesting entries. This is the major reason why you should check your credit reports at least once a year. The credit bureaus report these items, many of which end up going into collections, and your credit score takes a major ding.

Cleaning up this mess is a nightmare. It can literally take months and years to get the lenders to fix these fraudulent charges, and all the while, your credit score has become a pariah. There are some things you can do to protect yourself. 

Protect you social security number. Don't give it to anyone who doesn't have a legitimate reason for needing it, and don't carry it in your wallet or purse; likewise, your passport. Keep the information on your checks brief; name and address. Shred any sensitive information, like old credit card bills and anything else with identifying information on it, and also any unwanted credit card offers that come in the mail. Never give out personal information over the phone; it could be anybody and you have no way of knowing. A legitimate company you are doing business with will not be doing business this way. Review your credit card bills carefully each month and make sure you don't use your personal mailbox on your curb to place outgoing bills into. This is a favorite among identity thieves. On the internet try to stick with one credit card if possible for all internet transactions, and look for digital safety certificates like Verisign and Trust-E for compliance with standard internet safety procedures.

If you do become a victim, contact the police to initiate a crime report immediately.  Many of the credit card companies will require this anyhow to know that a crime has occurred. Call your credit card companies to close the offending accounts and request new accounts and numbers. Make sure it is noted that the account is "closed at the customerís request". Then call the credit bureaus, (all three of them) and report this to the fraud units. This will get the ball rolling.

Don't be dismayed if it takes some time to fix this. The best defense is a good offense. Do everything in your power to protect your information, and you'll more than likely be passed over for an easier target!