| Learn how to monitor your credit and
why it is so important - for good and bad credit.
You probably know something about the
problem of identity theft - situations in which a con artist uses someone else's
name, Social Security number or other personal details to make purchases, take
out loans or commit fraud in the name of an innocent victim. But do you know how
you, with the help of credit reports and credit bureaus, can help spot or stop
the theft of your identity?
First, here's why you should care about fighting ID theft. It is, by far, the
most common fraud complaint that consumers bring to law enforcement authorities
and consumer protection groups. According to the latest data compiled by the
Federal Trade Commission (FTC), identity theft in 2002 topped the list of
consumer fraud complaints for the third year in a row, accounting for 43 percent
of the total. And while federal laws and industry practices can limit your
liability if you become a victim of identity theft, it can take you a very long
time (even years) to repair the damage. That includes notifying creditors and
law enforcement that you've been victimized, closing tainted accounts and
opening new ones, and correcting your credit report.
You also may be denied loans, jobs, housing, insurance or other opportunities
if an ID theft shatters your reputation and credit rating.
A thief can
secretly run up thousands of dollars in bills using your name and a different or
fictitious address, and you may not be aware of this until you are turned down
on an application because the delinquent debt was recorded on your credit
report.
How can you use credit bureaus and your credit report to protect against
identity theft?
Monitor your credit report for warning signs, including loans or leases that
have been wrongfully taken out in your name. Also, pay close attention to the
"inquiries" section of the report that shows who has requested a copy of your
credit history. That's because thieves sometimes impersonate business people
with a legitimate right to obtain credit reports. In general, you should consider obtaining copies of your credit report from the three
major credit bureaus about once a year to verify that the information is
correct. There are services that will frequently (even daily)
monitor your credit report for possible signs of fraud or theft. These
services don't necessarily prevent identity theft from happening, but they will
alert you to changes in your credit file that may indicate identity theft.
If you find suspicious transactions on your credit report, take the following
steps:
- Contact creditors to discuss questionable items and close accounts that
you believe are fraudulent or have unauthorized transactions.
- Call the fraud department at each of the major
credit bureaus
to ask that a "fraud alert" be placed in your
file, so that lenders will be alerted to the fact that you may be a fraud
victim. Ask that the fraud alert state that you do not want new credit
extended without contacting you first.
- Contact the local police to file a report. Keep a copy in case you need it
later as proof of the crime.
- Consider filing a complaint with the FTC,
which will store the information in its database so that it can be accessed
by law enforcement agencies worldwide. The FTC also can provide information
on what steps victims should take and sometimes will refer cases to other
government agencies or private organizations for further action.
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