How Identity Theft Affects Your Credit Score

How Identity Theft Affects Your Credit Score

Curious as to how identity theft affects your credit score? It’s happened to many of us, and it’s as frightening to know someone has thieved your identity as it is to know your credit score may take a hit because of it.

Here’s everything you need to know about how identity theft affects your credit score, and how you can restore your credit.

How Identity Theft Affects Your Credit Score

When a random person takes out a loan in your name, they have no real incentive to pay off the debt. Thus, they rack up debt and leave us to pick up the pieces. In fact, you might not even realize an identity thief is stealing your information until you hear from a collection agency about owing money. By that time, your credit score has surely already taken a hit.

Your credit score is your key to appearing as a responsible citizen to a lender. An identity thief’s actions can stamp negative information onto your credit report, which then drops your credit score and limits your ability to qualify for loans.

Here are a few ways in which an identity thief can impact your credit report and your credit score:

  • New credit inquiries: Every time an identity thief applies for credit under your name, the lender is likely to take a look at your credit report. These credit checks (a.k.a. “inquiries”) appear on your credit report, and they usually drop your credit score by a couple of points.
  • New loans or new credit cards: Brand new loans or credit card accounts opened by an identity thief do not necessarily hurt your credit. However, when those accounts become delinquent because the thief fails to pay the bill, your credit score drops every time a month of missed payments goes by.
  • Collections accounts: After a certain time frame (typically 6-12 months), lenders turn any unpaid debt over to a collection agency. When this occurs, a collection account shows up on your credit report. That has a highly detrimental effect on your credit score. Medical ID theft often leads to a collection account, too. Identity thieves utilize your personal info to get medical services/treatment, and when those debts end up unpaid, the medical provider hands the debt over to a collection agency.
  • Higher debt & credit utilization: Aside from payment history, another major piece of your credit score is how much debt you carry. If a thief adds charges to your accounts that go unnoticed, a rising debt amount can plummet your credit score. Extra damage can result from increased credit utilization. The greater the percentage of your available credit that you use, the higher your credit utilization—and thus the more it can affect your credit score. This is precisely why maxing out your card(s) is bad for the health of your credit. An identity thief who charges cards to their limits (and beyond) may lead to a significant dip in your credit score.
  • Unpaid cell phone bills/utilities bills: When an identity thief starts a phone plan or house utility with your personal information and fails to pay the bills, those providers will probably report the missed payments to the credit bureaus. This causes a negative account to show up on your credit report, which damages your score.
  • Identity thieves can also drain bank accounts, leaving the victim with no way to pay rent, mortgages, car payments, credit cards, or other bills.

Measures To Take After Identity Theft Occurs

  1. First, cancel all credit accounts that have been compromised. Contact the credit card company or companies via phone, and follow up with a letter as well as documentation.
  2. Because the thief may have access to your Social Security number, don’t forget to tell all other creditors that you’re a victim of identity theft. Ask the creditors to let you know immediately if any suspicious activity shows up on your credit account.
  3. File an Identity Theft Complaint with the Federal Trade Commission (FTC). The FTC can be contacted by phone at (877) 438-4338.
  4. Enlist the help of Go Clean Credit to repair your credit score after it has been lowered due to identity theft.

Need to know more about how identity theft affects your credit score? Let us know! To enlist the help of a trustworthy, effective credit repair company, contact Go Clean Credit today.

No matter what your situation, Go Clean Credit has a solution. We have many credit repair programs that are available to help you overcome your credit situation and place you back on the path to financial success. Real credit restoration is not a once size fits all model and we tailor your needs to the right program, but most people can start for just $99 per month.

We have fixed price programs that get you back on track in as little as 5 months, debt resolution solutions, programs geared toward people who have had recent short sales or foreclosures and many others. Help is just a free phone call away, or you can fill out an appointment request. Contact Go Clean Credit to schedule a free consultation today.

How a Fraud Alert Helps With Credit Protection

How a Fraud Alert Helps With Credit Protection

Identity theft can hurt your credit score in more ways than one. Whether the theft of your identity results in higher balances on existing accounts, the opening of new accounts, late payments or an increase in inquiries, the end result is the same – your credit score will be affected until the fraudulent credit information is removed from your credit report. The removal of this information can take weeks, and even months in some of the more complex cases.

The higher your FICO score, the higher the drop in your score will be in the case of identity theft activity. How can you protect your credit in the case that your identity has been stolen? The answer is setting up a fraud alert.

Here’s how a fraud alert helps with credit protection:

A fraud alert lets creditors and lenders know your credit report may have been compromised. The alert lasts 90 days, and is a good step to take as it will protect your identity and will protect you from future theft – even if you only suspect identity theft.

To place a fraud alert, you’ll need to place one call to the fraud department of either Equifax, Experian, or TransUnion. Once you place a fraud alert with one of the reporting agencies, they are required to tell the other two agencies. You’ll provide your phone number to the bureaus so you can be contacted in case anyone asks for credit in your name within your fraud alert timeframe. If someone does ask for credit, the creditor will contact you to verify your identity and find out if you placed the request.

Setting up an initial fraud alert is free and means that you’re protected from identity thieves opening more accounts in your name. This gives you time to clear up the bad accounts.

Additional fraud alerts:

In addition to the fraud alert you should place with a reporting agency, you should also take advantage of credit monitoring services from your credit cards. Most online providers offer credit monitoring services that will instantly notify you of any activity on your account.

Notify your banks and lenders as well to let them know your identity has been stolen. These organizations also have policies and procedures in place to protect your identity, accounts and credit.

For more steps to take on protecting yourself from identity theft, learn about these simple steps to prevent thieves from stealing your credit.

If you’re the victim of identity theft, learn more about what to do if you’re the victim of identity theft.

If you’re looking for ways to clean your credit or have more questions about how a fraud alert helps with credit protection, make an appointment for a free consultation with our team today!

What to do if You’re The Victim of Identity Theft


What to do if you're the victim of identity theft

Identity theft can happen to anyone at any time especially if you utilize online banking or shopping, or use a debit or credit card for in-store purchases. The reality is that most of us don’t carry much, if any, cash making us vulnerable to identity theft each time we make a purchase. If you think you are or might be a victim of identity theft, here are some steps you can take to get your credit back to good health.

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