Checking your credit on a regular basis is the best way to protect yourself from identity theft. Identity theft is when someone uses your personal information such as Social Security number or bank account numbers without your knowledge. This could be to open up loans in your name, make purchases or open up accounts.
When someone opens credit fraudulently in your name most often the person who opens these accounts has no intention of making payments. So you have negative accounts that weren't opened by you showing negative information on your credit report. The consequences to you are it can make it difficult for you when you go to apply for an auto loan, mortgage or credit card because the fraudulent accounts that are in a derogatory status appear to be yours which then makes it difficult to obtain credit.
By monitoring your credit report from each one of the credit bureaus you can catch any inaccurate or unauthorized items that appear. If you suspect there is suspicious activity on your report take action immediately. There are several steps you can take to reverse the inaccurate information. By following these steps you can
Start by contacting each one of the credit bureaus to have fraud alerts placed on your report. With a fraud alert on your report, anytime your credit is pulled for an application for credit the lender must contact you and confirm your identity before extending credit. If someone does try to open credit in your name this should prevent any new attempts from going through. Close any fraudulent accounts or accounts that you feel may have been compromised. File a report with your local police and file a complaint with the Federal Trade Commission.
Don't think it can happen to you? It happens more than you might think. According to Javelin Strategy and Research, in 2008 there were 10 million victims of identity theft. One in every 10 U.S. consumers has been a victim of identity theft. Another study found that it can take the equivalent of working a full-time job for two years to correct the damage done by identity theft.
It is possible to protect yourself from identity theft. You don't have to be a victim. By keeping tabs on the activity on your credit reports you can catch inaccurate or suspicious activity early on before it causes severe damage to your financial reputation.
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