The listings featured on this site are from companies from which this site receives compensation. This influences where, how and in what order such listings appear on this site.
Advertising Disclosure

The Impact of Identity Theft on Your Credit Report and How to Keep It Secure

Christopher Somerville - Top10 writer
a woman sitting on a couch looking at her cell phone
Is your personal data safe? If it falls into the wrong hands, it could be used for credit or loans without your knowledge, harming your credit score.

Monitoring your credit report regularly using ID theft protection services is vital to detect any strange activities and prevent fraud. It's crucial to safeguard your credit and to prevent being scammed.

Credit reports disclose various financial aspects, from credit cards to mortgages. While manipulating someone's credit takes effort, sometimes significant purchases from fraudsters leave clues, like travel bookings or real-estate transactions. Let's review how ID theft impacts your credit report.

» Find out what to do if your identity has already been stolen.

How Does Identity Theft Impact Your Credit Health?

In 2022, the Federal Trade Commission (FTC) received approximately 441,822 complaints about credit card fraud incidents within the United States.

Your personal information could be on the dark web and shared or stored for illegal use. The real issues come when someone gets your information and starts using it without your knowledge to get your credit card details, open bank accounts, or apply for loans using your name.

5 Practical Implications of Bad Credit Due to ID Theft

  1. Limited Loan Options: It becomes difficult to qualify for loans like mortgages, car loans, and personal loans.
  2. Higher Interest Rates: Rates on loans you qualify for may have significantly higher interest.
  3. Denial of Credit Cards: You may be denied the opportunity to open new credit cards, impacting your financial flexibility.
  4. Increased Costs: It may become more difficult to obtain insurance, rent apartments, and secure utilities due to poor credit.
  5. Employment Challenges: Some employers check credit scores, affecting job prospects.

Your credit report shows all sorts of payment activities you might have—from credit cards and home loans to in-person purchases like cars or tech equipment. Even though it takes a lot of work to steal someone's credit information, it's not a perfect system for thieves.

Sometimes, fraudsters who do this buy large items like camper vans or boats and move to a new place to try and hide, but these items leave clues behind. For example, if someone registers a purchase in a different state, you may notice something is off. Afterall, you'd know if you had a boat in another state.

So, when checking your report, note names you don't recognize or accounts you didn't open.

How to Dispute False Charges on Your Credit Report

Contact your local credit bureau if you need help with your credit report. You can reach them by phone:

Experian: 888-397-3742

Equifax: 888-378-43292

TransUnion: 855-681-3196

Use online credit reporting sample letters to help you explain the problems you are having as you fill out your forms. Check back with the bureau after you send your complaint to ensure they received it and are fixing it.

Keep copies of all your messages and forms. It's important to save everything related to your problem in a secure folder on your computer or a physical folder. Credit report mistakes happen, so keeping clear, detailed records is wise.

Simple Monitoring Tips for Your Credit

If you are concerned about your credit safety, you're not alone. According to a 2022 US consumer survey, 42% worried about the safety of their online data.

  • Use an ID theft protection service to watch over your information for you.
  • Arrange with your monitoring service to turn on alerts to inform you if something unapproved happens, like weird transactions or loans in your name.
  • Even if you're not getting alerts, always be on top of your credit report information to determine if and when anything out of the ordinary happens.
  • If you spot inconsistencies, act fast to prevent fraudulent behavior from getting out of hand or costing you more in losses.

Practical Ways to Protect Your Credit Information

Websites like LifeLock or Identity Guard can help you monitor your credit health and protect yourself from cybercriminals.

Here are some practical ways to help prevent fraud on your credit cards and bank accounts:

  • Disable international spending options if you're not traveling abroad to prevent unauthorized usage overseas.
  • Some companies, like Zander Identity Theft, offer alerts for unusual charges, allowing users to approve or deny them.
  • Keep an eye on your credit reports for free using bureau-approved sites.
  • Use credit locks. Some credit monitoring services offer credit locks, which allow you to lock and unlock your credit reports at will to prevent unauthorized access.
  • Use a different password for each of your online accounts. Consider using a password manager to help you create and store complex passwords.
  • Be cautious of emails, texts, or calls asking for personal information. Always verify the source before providing any information.
  • Shred any personal documents you no longer need that contain personal information, and keep the rest in a safe place.
  • Avoid using public Wi-Fi when accessing financial accounts or making online purchases. Use a secure, private Wi-Fi or virtual private network (VPN).

» Looking for more security? Check out these ten ways to protect your personal information.

Safeguarding Against Identity Theft and Fraud

Stay on the defensive, monitor your credit regularly, and take swift action against strange activities. Learn how to check your credit report to fortify your financial well-being and guard against threats. Find out where the highest fraud rates are happening to determine if your area is at risk.

By staying informed and proactive, you empower yourself to overcome these challenges and secure a more resilient financial future. Be vigilant and promptly address odd behavior, such as unauthorized purchases linked to your name.

» Where else do you need protection? Learn to protect yourself from phishing and email attacks.

Christopher Somerville - Top10 writer
Chris Somerville, Top10 writer with a BA in Technical Writing, shines as Oregon Employment Dept's Supervisor & ID Theft Manager. Skilled in staffing, admin, legal analysis, project management, and customer service, he boasts a vast skill set, including magazine production and automotive marketing.