Staying Ahead of the Credit Curve
Your personal credit report is the most important piece of information about you, financially speaking. Its information will impact your ability to borrow money, get insurance, and even secure employment these days. Your credit report is constantly changing as you make and meet financial obligations, or worse, fail to meet them. Monitoring your credit report is a tool you can use to watch these changes. Make sure nothing incorrect ever enters onto your report in the first place. Additionally, this is the best protection against heading off identity theft, according to the FBI.
Video: Interview with an Identity Thief (CNN) -- from prison
How Credit Monitoring Functions
Credit Monitoring Firms are independent companies. They do not work for the credit bureaus nor do the work for potential lenders. They simply exist to monitor your credit and they keep an eye on any potentially negative or fraudulent changes. These services operate by informing you via email of any additions, such as new loans or negative items from lenders. You will typically have the option to choose how often you would like to be monitored, whether it is daily, weekly, or on a monthly basis. Based on these terms, your credit monitoring service will request a copy of your credit report. Then, any new information will be sent to you to verify.
For example: Someone using your identity makes a loan inquiry at their local BMW dealership to make a vehicle loan in your name. While the application will not be alerted, once the thief makes the purchase, you will be notified by your credit monitoring service.
The Advantages to Knowing Immediately
The U.S. Department of Justice reports that on average a consumer finds out that they have been the victim of identity theft quite late. This typically happens after the thief has been using your identity for a minimum of 14 months. In this time your credit report, and your personal finances, can be impacted with drastic results. In contrast, by being alerted immediately, you are enabled to stop the crime immediately in its tracks. Typically, if you can resolve an identity theft within the first 5 months, you will incur no out-of-pocket expenses — meaning you won’t lose any actual money.
Your credit report, however, will suffer much sooner. With credit monitoring, you can know within days and remove the problem immediately, before the damage even occurs. Additionally, credit monitoring can protect you from incorrect information being provided to by your lenders. With monitoring, you will know immediately if one of your creditors has reported a late payment or other malfeasance on your report. You will also be able to see that your lenders are reporting positive information for you. Any loan or credit line you have in good standing should be reported. With credit monitoring, you be able to see immediately if they are keeping this information updated.
Video: The best way to protect yourself against ID Theft
What to do When Unknown or Incorrect Items Appear
In the event of an unknown item appearing, such as a loan, a new line of credit or a false report by your lenders, you must act. Follow these steps to get the items removed quickly before the damage impacts your credit history:
Identify the source of the item. Is it someone taking credit out in your name or a legitimate creditor of yours reporting on you?
If your own information is reported inaccurately, from a known and legitimate account, follow these steps:
- Contact your lender immediately, first by telephone, and inform them of the error.
- Make copies of any information to support your claim, such as on-time paid bills and canceled checks.
- Request the information be removed because it is an error.
- Should they not act, make this request in writing. You can usually find the mailing address of your lender on a recent bill. Make sure to reference the negative item you are disputing, and also your account information. Include copies of all information supporting your claim.
- If the lender does not respond, or refuses to remove the negative item; go around them. Contact the credit reporting bureaus that are reporting the negative item, and dispute the claim with them directly. Follow the same steps as above, but this time you will send this information to the credit bureaus directly.
Experian
NCAC
PO Box 9556
Allen TX 75013
888-397-3742
Equifax Information Services
P O BOX 740256
Atlanta, GA 30374
800-997-2493
TransUnion
Customer Disclosure Center
Trans Union Consumer Relations
PO Box 2000
Chester, PA 19022-2000
800-888-4213
If the item is an unknown account, it is possible someone is stealing your name to make a line of credit.
Follow these steps:
Contact you credit monitoring service and inform them. Request that they let you know immediately of anymore additions to your report. - Contact the Fraud Departments of the 3 major credit bureaus, using the telephone numbers above. Inform them that you feel you have been a victim of identity theft.
- Contact the creditor where the loan or line of credit was issued. Request their fraud department and inform them about the theft on the account in question. This information is available by your credit monitoring service.
- Contact your local police department and file a report.
- Contact the Federal Trade Commission (FTC) and file a report with them.