Identity theft can hurt your credit score.
Identity theft can be a serious problem for those trying to apply for new lines of credit. Many people don’t learn about identity theft problems until they decide to review their credit reports ahead of a loan application. Fixing these issues takes time, which is why it’s best to review your credit information well in advance of a home loan application, car loan, etc.
How can identity theft negatively affect your credit score?
How does identity theft specifically affect your credit? If someone has opened a credit card account in your name, for example, your credit report may contain references to missed or delinquent payments on these cards, which will definitely affect your credit rating.
Even having a card in your name that you didn’t apply for can affect your rating as a loan officer would be required to review your debt potential as well as your actual outstanding balances.
How can you detect identity theft on your credit report?
Detecting identity theft is tricky for those not used to looking at their credit reports, but the government’s consumer watchdog organization, the Consumer Financial Protection Bureau (CFPB) has some good advice on their official site, which includes the following; borrowers should review their credit reports for:
- Accounts you don’t recognize or are sure you did not open.
- Details of the accounts you do have-do your account balances appear correct?
- Outstanding balances on your credit reports that seem wrong or too high.
- Incorrect personal information, such as your Social Security number, address, name or initials, and employers.
What can you do if you find evidence of identity theft in your credit report?
One of the most important things to remember about identity fraud issues is that the most lasting trouble is often related to the timing of clearing up the mess. If you spot unauthorized account activity, bogus accounts opened in your name, or other problems, you’ll be required by the credit reporting agencies to report these issues to the police, possibly the FBI, etc.
That equals a time investment, and what’s more, the accounts may require several months to investigate, verify, and correct. That might not be a problem for someone who doesn’t have plans to apply for a home or auto loan in the near future, but if you were thinking about making that financial commitment soon, resolving the identity theft problems can bring the process to a halt (or slowed down considerably) until there are signs that a resolution is pending.
That’s why potential borrowers should begin reviewing credit reports from the three major credit reporting agencies (Equifax, TransUnion, and Experian) as early in the process as possible. If you are buying a home, it’s strongly recommended to review credit reports a year in advance. Staying on top of your credit reports makes you a much more informed borrower or applicant; the peace of mind you get from knowing exactly what is on your credit history is also a big advantage.
MSI Credit Solutions can help you clear up fraudulent or inaccurate information on your credit report. Call now.
If you have encountered any suspicious activity we recommend you freeze your credit reports and request a fraud alert to be placed. Be sure to inform your financial institution as well. If you need assistance disputing any fraudulent or inaccurate information feel free to contact us at MSI Credit Solutions for a free no obligation consultation.
MSI Credit Solutions provides superior credit restoration and comprehensive consulting services that are reliable and affordable. For any questions or to schedule a free credit consultation, contact us at (866) 217-9841.
*The information in this article has been provided strictly for educational purposes.