Credit Fraud Basics
Credit Fraud 101
- What is Credit?
- What is Credit Fraud?
- How do Identity Thieves do it?
- How to Discover Credit Fraud?
- How to Maintain your Good Credit Score?
As important as credit scores have become, it’s vital to have the best possible information on your personal credit report. Maintaining good credit is one of the most important factor in securing your financial future. The most important step is to find out what your credit score is by signing up for a Equifax 3-in-1 Credit Monitoring with FICO Credit Score.
Credit has become part of our daily financial transactions. As people make fewer cash purchases and rely more heavily on credit cards, debit cards, and automatic banking transactions, your personal credit history is linked to every purchase you make. Consumer credit monitoring are available from the three major credit bureaus – Experian, Equifax, and TransUnion.
From electric and cable bills to credit cards, vehicle financing, mortgages, personal loans, and even job applications, people are viewing your credit rating more often than the average consumer realizes. This is one reason is has become more important than ever to maintain a good credit history. Making payments on time, avoiding unnecessary debt, and keeping your spending under control are ways to ensure your good credit doesn’t become bad credit.
If you have damaged credit, the negative information can appear on your credit report for seven to ten years, depending on the type of debt incurred. There are ways to remove bad credit from your consumer credit report, but it takes time and effort to fix those credit related problems.
According to the FBI, credit fraud is one of the fastest-growing U.S. crimes. Studies show that about one in five families has been a victim. The most serious form of credit fraud is identity theft, which takes many months and thousands of dollars to restore your credit.
Identity theft can occur in a variety of ways. Thieves can steal your Social Security or credit card numbers, then change the address on your bills. They then use your information to impersonate you, buying or renting products or using your personal information to commit criminal acts.
Most damaging of all, you often don't know you're a victim of this federal crime until months later, when you are unexpectedly turned down for a loan or get a call from a collection agency about an account you never opened. You might even get a call from the police about a crime you didn't commit.
Isn't it time to take steps to protect yourself against this devastating crime? The truth is identity thieves are extremely smart and know how to act quickly in damaging your identity and credit.
We strongly recommend that you take proactive steps to protect yourself from credit fraud. Click here to review our recommended credit fraud protection products to help keep you and your family safe.
How do Identity Thieves do it?
First, identity thieves steal your personal information by:
• Going through your mail or trash, looking for bank and credit card statements, pre-approved credit offers, and tax information.
• Stealing personal information from your wallet or purse such as identification, credit, or bank cards.
• Completing change-of-address forms to redirect your mail.
• Acquiring personal information you share on unsecured sites on the Internet.
• Buying personal information about you from an inside source -- for example, a store employee that gets your information from a credit application or by "skimming" your credit card information when you make a purchase.
• Getting your personnel records at work.
Then identity thieves use your personal information by:
• Opening new credit card accounts using your name, date of birth, and Social Security Number. When they use the credit cards and don't pay the bills, the delinquency maybe reported on your credit report.
• Establishing phone or cellular service in your name.
• Opening a bank account in your name and writing bad checks on the account.
• Counterfeiting checks or debit cards, and draining your bank account.
• Buying cars by taking out auto loans in your name.
• Calling your credit card issuer and, pretending to be you, changing the address on the account. Bills get sent to the new address, so you may not realize there's a problem until you check your credit report.
• Filing for bankruptcy using your name to avoid paying debts they've incurred under your name.
There are several warning signs that credit fraud may be occurring:
* Your Equifax 3-in-1 credit monitoring contains inquiries or information about accounts that you did not open
* Strange charges show up on billing statements
* Bills arrive from unknown or unfamiliar sources
* You receive calls from creditors or collection agencies
We strongly recommend that you take proactive steps to protect yourself from credit fraud. Sign up for our recommended credit fraud protection services to help keep you and your family safe.
How to Maintain your Good Credit Score?
When you overextend your finances and miss payments on your bills, your credit score suffers. A few late payments can mean the difference between a low interest rate on your new car and a denial based on your poor credit history. Always try to stay on top of knowing your credit score.
Once you have established credit and started charging purchases, there are some important steps to take to ensure you do not fall on the bad side of the credit tracks. The most important factor is keeping track of your spending. Having a $500 credit limit doesn’t mean you need $500 of new merchandise. Don’t spend more than you can reasonably afford to repay. You are paying interest in your purchases and spending too much can quickly put you over your credit limit. This can raise your interest rates, and a habit of excessive spending may lead to credit problems.
Be sure to pay your bills on time. Late payments are an easy mistake to make and a harder one to fix. A history of running behind on your bills can mark you as a bad credit risk and lead to future problems when establishing new credit accounts. Pay at least the minimum balance due before the due date to avoid a poor credit rating. If you are not able to keep up with your financial obligations, let your creditors know immediately. It’s better to call and tell them you are having financial difficulties so you can negotiate new payment terms than to avoid making payments. You’ll regret the lack of communication when your credit rating plummets and the interest rates on existing accounts rise.
