A guest post by Eva Velasquez, CEO, Identity Theft Resource Center
Individuals might not realize how imperative it is to monitor their credit report and know their credit score, but they are both important steps to take in minimizing the risks of identity theft and in catching any suspicious activity early. Your credit report provides you with a lot of information, mostly things like inquiries from creditors (current and potential), any unauthorized accounts or lines of credit, and any outstanding debt that may have been turned over to collections.
Your credit score, on the other hand, is an important piece of compiled personal data that’s largely based on your credit report. Knowing your score before you try to make a large purchase can mean the difference in getting turned down, or even being offered a percentage rate far higher than you’re actually eligible for due to that low score.
But there’s a common misperception among people who don’t have the best credit history or maybe have a score they’re not quite proud of, and that’s the notion that identity thieves won’t bother with you if you don’t have amazing purchasing power. That couldn’t be farther from the truth, and in some ways, you could actually be more of a target to a thief or scammer if you’re not staying on top of your credit.
First of all, your Social Security number is not “tied” to good credit or bad credit. It’s one of the pieces of information you’ll submit when you request a credit report, but there’s no magic formula that tells a thief that your number has been flagged or blacklisted, for example. If a thief has the opportunity to steal your personal identifiable information, whether to use it themselves or sell it, there’s no instant glimpse at your credit report to make sure your data is worth stealing. Of course, if the thief does eventually discover that you don’t have good credit, that might actually help them; it could be a sign that you’re not monitoring your report or checking up on your financial standing, giving them ample opportunity to use it undetected.
At the same time, while having bad credit might prevent a thief from opening a new credit card in your name, it doesn’t stop them from telling the police your name if they are stopped for a traffic violation or arrested for a crime. It also doesn’t prevent a thief from falsely applying for disability benefits, getting a job, or even filing a fraudulent tax refund, all in your name. Once those incidents occur, the damage can go on for quite some time before you ever find out.
So, how do you go about not only fixing your credit, but also working to minimize your risk of identity theft? Once you’re certain that you’ve safeguarded your personal data as much as you can, get to work on that credit report. The first step is to know what’s on it and AnnualCreditReport.com is an excellent source for free reports. You’re entitled to one free report every 12 months from each of the three major reporting agencies, so there’s no reason to delay.
After your report arrives, it’s time to look it over with a fine-toothed comb. Check for any strange activities, any credit lines that you weren’t aware of, and of course, any outstanding debt in your name. It’s also important to look for any old credit cards that might have been your legitimate accounts but that have been long forgotten. There are credit counseling services that can help you get moving in the right direction towards a better credit score, but right now, you can’t know if your identity is in danger if you don’t know what’s on your report.
ID Experts proudly provides financial support to the Identity Theft Resource Center.