Protecting your identity is an essential aspect of maintaining healthy credit and financial security. This is especially true in the age of COVID-19 scams, data breaches, cybersecurity threats and identity theft, when becoming a victim of fraud can do lasting damage to your credit and finances.
The longer that identity theft continues unnoticed, the greater the damage can be. For this reason, it’s important to monitor your credit to catch signs of fraud early. Here’s how early detection can minimize the damage done by identity theft.
1. Early Detection Can Save You Time
The fallout from identity theft may include damaged credit, tax debt and even a criminal record. Recovery can take months or even years, depending on the extent of the fraud and how long it went unnoticed. Recovering from identity theft may include:
- Filing police reports if you know the perpetrator, the thief provided your name to the police or a creditor or other company requires you to file police reports.
- Reporting identity theft to the Federal Trade Commission.
- Reporting identity theft to the credit bureaus and placing freezes on your credit reports.
- Notifying financial institutions and other companies with whom you do business.
- Disputing inaccurate information on your credit report, including late payments, accounts you don’t own and accounts in collection.
- Dealing with debt collection agencies.
When you catch signs of fraud early on your credit report, recovering from identity theft can be much easier. You’ll be able to respond quickly and prevent further damage to your credit from occurring.
2. Early Detection Can Save You Money
Clearing up identity theft issues can create out-of-pocket costs for victims, ranging from less than $100 to $1,000 or more. Victims who had fraudulent accounts opened in their name or had personal data misused tend to see greater loss than other fraud victims. Out-of-pocket costs may include hiring lawyers or other consultants, corresponding with multiple parties and other recovery expenses.
Early detection can mitigate these costs. The earlier you detect and respond to identity theft, the better the chances you have of stopping the fraud before it causes a significant financial burden.
3. Early Detection Can Avoid Negative Health Outcomes
Victims may suffer emotional distress caused by the stress and feelings of violation that coincide with having their identity stolen. They may also experience exhaustion, trouble sleeping and stress headaches. If medical identity theft has occurred, it can even cause delays or issues when receiving health care.
Early detection can reduce the extent of the identity theft, and the amount of time and stress that it will take to clear it up. In this way, early detection can help preserve your physical and mental health.
Credit Monitoring Matters
Monitoring your credit is important to help protect yourself from identity theft. Checking your credit report once a year may not be enough; daily identity theft and credit monitoring can alert you when suspicious activity occurs and help you identify fraud. They can even help recover your identity once you become a victim.