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!