Identity theft is no joke. Unfortunately, it can have some serious consequences for your financial health. One of the most significant impacts it can have is on your credit score.
This blog explains how identity theft affects your credit score and gives tips to help protect it.
How Does Identity Theft Impact Your Credit Score?
Identity theft can significantly impact your credit because it involves someone using your personal information, such as your name, Social Security number, or credit card number, without your permission to make fraudulent purchases or open new credit accounts.
As a result, these fraudulent activities can appear on your credit report, negatively impacting your credit score and creditworthiness. For example, suppose someone opens a credit account in your name and fails to make payments. In that case, the delinquent account can be reported on your credit report, potentially lowering your score.
Additionally, if you are unaware of the fraudulent activity immediately, the damage can become even more severe. Late payments, collections, and even bankruptcies can show up on your credit report, making it difficult for you to obtain credit in the future.
How to Spot Identity Theft on My Credit Report?
Identifying identity theft is not as complex as some might think. Here are some ways to help detect it on your credit report.
- Check for accounts you don’t recognize: Review your credit report carefully and look for any accounts you don’t remember opening. This can be a sign that someone else is using your personal information to open accounts in your name.
- Look for unfamiliar inquiries: If you see inquiries on your credit report that you don’t remember authorizing, it can be a sign that someone is trying to open credit in your name. Inquiries can be a red flag, especially from companies you’ve never heard of.
- Watch for sudden changes in your credit score: If your credit score drops suddenly without any explanation, it can be a sign of identity theft. Watch for any unexpected changes in your credit report or score.
- Check for inaccurate personal information: Make sure your personal information, such as your name, address, and Social Security number, is correct on your credit report. If you see any inaccuracies, it can be a sign that someone else is using your information.
- Be aware of collections or delinquencies you don’t recognize: If you see them on your credit report for accounts you don’t remember opening, it can be a sign of identity theft. Collections and delinquencies can have a negative impact on your credit score, so it’s important to address them as soon as possible.
If you spot signs of identity theft on your credit report, acting immediately is important. Here are the steps you can take:
- Review your credit report and report any inaccuracies to the primary credit bureaus.
- Ask the major credit bureaus to place a fraud alert or freeze on your credit report.
- Inform the Federal Trade Commission (FTC) about the identity theft case.
- Use IdentityIQ services to monitor your credit and receive real-time alerts about possible suspicious activity.
Protecting Your Good Credit Score
To help safeguard your credit score from identity theft, consider implementing these tips for protection.
- Monitor your credit report regularly: Checking your credit report frequently is an excellent way to detect possible suspicious activity or inaccuracies that can indicate identity theft.
- Use strong passwords and enable two-factor authentication: Use strong, unique passwords for all your financial accounts and enable two-factor authentication when available. This makes it harder for identity thieves to access your accounts.
- Be careful when sharing personal information: Be cautious about sharing personal information, such as your Social Security number, date of birth, and financial account numbers. Only share this information when necessary and with trusted sources.
- Use identity theft protection services: Consider signing up for IdentityIQ identity theft protection services, so your receive a range of features to help protect your identity, including credit monitoring, fraud alerts, identity theft insurance, dark web and internet monitoring, and identity theft resolution services.
Identity theft can have severe and long-lasting effects on your credit score and financial stability. Therefore, taking preventive measures such as using strong passwords, being cautious of phishing emails, and monitoring your credit report regularly is essential.
Additionally, seeking assistance from IdentityIQ services can provide an added layer of protection to help detect and resolve possible fraudulent activity quickly.