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Thwarting Identity Theft with Credit Report Checks

Identity Theft

It only takes a minute for a credit card thief to steal your identity, but it may take months or even years to clear you name and deal with the ramifications of identity theft.

According to Javelin Strategy and Research, nearly 11 million adults were victims of identity theft in 2009 alone; an increase of 12 percent from the year before and a 37 percent increase from 2007. Unfortunately, many victims of identity theft don’t even realize they are victims until they apply for a loan and are turned down or they receive their credit card bill with thousands of dollars in charges on it.

Under the Fair Credit Billing Act, you are only responsible for up to $50 in unauthorized charges on your credit card, provided you report the charge within 60 days. However, today’s identity thieves often go much further than just charging up your credit card. They may steal your social security number, driver’s license number and begin taking out loans and credit cards in your name. What’s worse is that they may be able to go unnoticed for a long period of time before you even realize what is going on.

Your Best Line of Defense

Because of this, one of your best lines of defense when dealing with identity thieves is to closely monitor your credit report. You may also choose to place a fraud alert on your credit report with all three credit monitoring bureaus – Experian, TransUnion and Equifax – if you think that your personal information was compromised.

A fraud alert will stay on your credit report for 90 days, during which a creditor will not issue you any credit without first verifying your identity. A fraud alert will prevent any other person from opening any type of credit in your name without your knowledge. Victims of identity theft may also choose to place an extended fraud alert on their credit reports, which will be in effect for seven years.

Keeping your Guard Up

However, to protect yourself on a daily basis, it is always best to pay close attention to all statements that come to your home, including bank statements and credit card statements. It is also a good idea to order a copy of your credit report for all three credit reporting bureaus at least once a year.

You can request free reports from all three bureaus once a year, so take advantage of this opportunity.

Free Credit Report Ads are Under Scrutiny

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You know those catchy commercials where some guy is telling you that you should order a “free credit report” to protect your credit.  Well, so does the Federal Trade Commission, and they’re not too happy about them.

In particular, they think using the term “free” by these companies is misleading. Many people don’t realize that these free credit report companies are not merely offering a free credit report; in fact, they are trying to sell credit monitoring services.

Credit Monitoring Services for Sale

In fact, if an individual orders a “free” credit report through one of these companies they are often lured into signing up for credit monitoring services. Credit monitoring services are essentially memberships that charge monthly fees to update consumers on any credit activity taking place on their credit report.

These memberships are often automatically withdrawn from an individual’s account on a monthly basis and, because many consumers are unaware of how this membership works, they end up being charged for a service that they simply don’t want.

Consumers’ Rights regarding Annual Credit Reports

The FTC seems to have the biggest problems with these commercials because the people calling these companies are simply looking for a free copy of their credit report. What many people don’t realize is that everyone is entitled to a free copy of their credit report on an annul basis from all three of the nation’s credit reporting agencies (TransUnion, Experian and Equifax). Individuals are also entitled to a free copy of their credit report anytime they are denied credit.

Are Credit Monitoring Services Right for you?

Credit monitoring services are memberships that closely monitor an individual’s credit report for any and all signs of activity. The purpose of these sights is to catch unauthorized activity as soon as it occurs. For some individuals, these services may be quite helpful and may help provide peace of mind. However, for most individuals, a quick check of their credit on an annual basis is all they need to keep track of their credit report.

Protect your Credit: Order a Copy of your Credit Report Today!

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What you can’t see won’t hurt you, right? Wrong!

For many of us, ordering a copy of our credit report is downright frightening, as we simply don’t want to deal with the details of our credit report and what is may or may not contain.

However, monitoring your credit report is one of the smartest things you can do to maintain your credit score and work towards an excellent FICO score.

The key is to remain proactive when it comes to your credit. Just think of how satisfying it would be to have a clean credit report, free of errors and discrepancies!

It’s Never Been Easier…

The fact of the matter is that it has never been easier to get a hold of your credit report, as the three, national credit reporting agencies – TransUnion, Experian and Equifax – are all obligated to offer consumers a free copy of their credit report every year.

So, what are you waiting for? Bite the bullet and take a good, hard look at your credit report.

Once you have a copy of your credit report, it is important to check it carefully and immediately contact the appropriate credit bureau if you find any inaccuracies or errors. It is important to understand that the information found on each of the three credit reporting agencies may be different, so you may find an inaccuracy on one and not the other.

Making Changes

For many consumers, examining their credit report is a difficult task, mainly because they may have to take a good, hard look at their credit card debt and of their spending habits. Although this may be a difficult thing to do, know that it is an important step to recognizing the state of your credit and for making the necessary changes for the future.

For many of us, ordering a copy of our credit report may be a necessary step to changing our spending habits. After all, it is a lot easier to ignore your credit problems than it is to face them head on.

Take advantage of your free credit report and start down the road to financial responsibility – today!

Useful Information about the Fair Credit Reporting Act

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What you don’t know about the Fair Credit Reporting Act could cost you.

The Fair Credit Reporting Act (FCRA), which is enforced by the Federal Trade Commission, is a federal act designed to ensure that consumers’ privacy is protected and that the credit reporting agencies maintain accuracy and abide by certain responsibilities.

Perhaps one of the most important features about the FCRA is that consumers are entitled to a copy of their credit report from all three, national credit reporting agencies – Equifax, TransUnion and Experian – once a year.

There are also other instances in which you may be entitled to a free credit report:

• - If you have been denied for credit, insurance or employment (you must ask for a copy of your credit report within 60 days of being denied)
• - If you are unemployed and plan to begin looking for a job within the next 60 days
• - If you are on welfare
• - If you have been a victim of fraud or identity theft

Under the FCRA, you also have rights regarding inaccuracies which appear on your credit report. The credit reporting agency in which the inaccuracy appears, as well as the creditor who provided the information, have an obligation and a responsibility to investigate and correct the inaccuracy within 30 days.

Simply inform the credit reporting agency in writing. The credit reporting agency must then forward the information to the creditor, who must then investigate and review the information and report back to the credit reporting agency.

Upon resolution of the inaccuracy, the credit reporting agency must provide you with the written results of the investigation, as well as a new copy of your credit report (if the dispute results in a change on your credit report).

Finally, the FCRA recognizes that the only individuals who can obtain a copy of your credit report are those individuals with legitimate business needs. In addition, your employer may only access your credit report upon your approval.

If you have experienced violations of the FCRA, you should report it directly to the Federal Trade Commission at:

Consumer Response Center — FCRA
Federal Trade Commission
Washington, D.C. 20580.

Common Questions about your Credit Report

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We all know that we must stay on top of our credit to maintain a strong FICO score, but how many of us actually do just that?

Your ability to obtain a mortgage, purchase a car or secure a credit card all relies on your credit rating. It is therefore of the utmost importance that you order a copy of your credit report.

Luckily, under the nationwide Fair Credit Reporting Act (FCRA), which is protected by the Federal Trade Commission (FTC), you are entitled to a free copy of your credit report from all three of the consumer reporting agencies – Equifax, TransUnion and Experian – once a year.

Now that you are armed with this information, you can begin the process of reviewing your credit report.

Q: What type of information appears on my credit report?

A: Your credit report should contain your personal information, such as your name, your address and your source of income, as well as all sources of credit. It will also report any bankruptcies, arrests or cases in which you were sued.

Q: What is a typical credit report comprised of?

A: The four sections of a standard credit report include: your personal, or identifying, information; your credit history; public records; and inquiries.

Q: What are public records?

A: Public records include such things as bankruptcies and law suits.

Q: What are inquiries?

A: Every time you apply for credit of any kind, it is typically recorded as an inquiry. Excessive inquiries do not look very good in the eyes of a creditor; therefore, too many inquiries can lower your credit score.

Q: Do I need to look at my credit report through all three credit reporting agencies, or is the information the same?

A: Each credit reporting agency has their own set of information, as well as their own credit rating for you, so it is important to review your credit report through all three credit reporting agencies.

Q: Who uses the information on my credit report?

A: The three credit reporting agencies – Equifax, TransUnion and Experian – sell this information to creditors, insurers and even your employer. They then use this information to determine your eligibility for credit cards, insurance and employment, among many other things.

Q: What if I find a mistake on my credit report?

A: If you find a mistake or an inaccuracy, you must immediately contact the credit reporting agency and file a report. It is then the credit reporting agency’s duty to research the problem and correct it, if needed.