Identity theft can be financially ruinous if not handled quickly. Looking at your credit reports annually is one way to monitor potential identity theft. If your report contains account information that is unfamiliar to you or if you are surprised by your score, you may need to look into the possibility of identity theft.
Your credit score is the equivalent of your financial identity when it comes to buying a house, securing credit, or making other major financial decisions. Credit scores have the ability to impact interest rates, premium payments, and the ability to secure loans. Having your score altered by someone’s illegal use of your information can prevent you from living your life.
Look out for these warning signs as indicators of identity theft.
1. Unauthorized charges on your accounts. While annoying, it is incredibly important to reconcile all of your financial statements every month. Many banks and credit companies monitor suspicious activity, but you have to be the first line of defense for your own finances. Any suspicious activity or unauthorized purchases should be reported to your financial institution at once.
2. Your credit report features information that doesn’t add up. Whether it is a debt or an account number that you don’t recognize, your credit report holds valuable information about your identity. Sometimes identity thieves will open accounts with your information that you may not otherwise know about. Look over your credit reports at least once a year and pay attention to all information presented about you.
3. You’ve been contacted by debt collection agencies. If you get a call about an account that you have no knowledge of, you might be the victim of identity theft.
4. You receive bogus medical bills. Identity thieves will use your insurance information to get medical treatment. Unpaid medical bills will definitely affect your overall credit score, and you may be held responsible for paying for treatments you never had.
5. Unexpected approvals are in your mailbox. If you see a notice that your mail is being forwarded, or information about credit cards and loans that you’ve never applied for, chances are you’re being targeted by an identity thief. IRS calls about unreported wages that you aren’t familiar with are also warning signs.
What you should do if you suspect identity theft.
1. Alert Experian, TransUnion, or Equifax about the fraud. They will put an alert on your account and inform the other agencies. This step will make it more difficult for an identity thief to continue using your information in financial activities.
2. Obtain copies of your credit reports. Look over all the information and contact any companies with inaccurate account information. They will be able to stop the activity on accounts. Always follow up with a letter in writing to the business.
3. Create a fraud report. The report should include detailed information about the fraud.
4. File a report with the police. Take your created fraud report, which will be known as an “identity theft affidavit.” The police station will be able to help you with filing the report.
5. File a report with the FTC (Federal Trade Commission). You will need your identity theft affidavit and a copy of the police report to file an FTC report.
Taking these steps as soon as you are aware of fraudulent activity can help protect your account and allow you to take further steps to protect your information. After your report has been filed, you can use a copy of it to have the reporting bureaus remove fraudulent information from your file, prevent collection agencies from contacting you for payment, and obtain more information about the identity thief’s activities.
Recovering from Identity Theft
You’ll likely need to take several more steps to ensure that your data is protected and that all inaccuracies are resolved after you discover identity theft. From writing letters of dispute to canceling and changing credit card accounts, you’ll need to take every precaution to ensure that the identity thief no longer has access to your information.
Alert all banks and financial institutions with which you have accounts. You never know what information an identity thief has accessed. Track all information surrounding your communications with companies. Keep copies of every letter you send and file every response you receive. It’s always a good idea to follow up any verbal communication with written letters.
You may need to take legal action to repair your identity, and having records of all correspondence and steps that you’ve taken to repair your financial records will be admissible as evidence. Contact a credit repair agency for help with documenting and contacting credit bureaus and other companies to get your information repaired.
Prevent Identity Theft
The best way to handle identity theft is to prevent it from the start. Being vigilant with all your accounts will keep you abreast of any suspicious activity. Here are some other tips for preventing identity theft.
Always clear personal information on the internet. Logins and passwords should not be left open on any public computer.
Change passwords frequently. Use secure passwords that do not contain personal or easily identifiable information about yourself. Change them frequently on financial accounts.
Use a credit card in public and online. Credit cards can be repaired relatively easily if they are compromised by fraudulent activity. Other payment methods, such as debit cards, are not guaranteed in the same ways as credit card payments.
Use anti-spyware and spam blocking software. Security features on your computer are good investments to prevent a hacker from picking up your information through malware or spam.
Shred personal documents. Trash has historically been a popular place for identity thieves to pick up sensitive information. Any documents that contain personally identifying information such as social security numbers, account numbers, and routing numbers should always be shredded.
Maintain and verify your mailing address. Make sure your mailing address is updated with financial institutions on a regular basis. If you move, contact the postal service and other companies to ensure your address is changed. Sensitive information that is sent to the wrong address can make an identity thief’s actions a crime of convenience.
Identity theft is not just a hassle to fix. It’s damaging and can lead to unnecessary legal action and difficulty regaining your rightful credit score and financial information.