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How Does Identity Theft Affect My Credit?

Identity theft is one of the biggest problems in the financial sector and can be detrimental to victims of it. With the technological age at a peak, the ease with which thieves can access your identity is a whole new high. There are many ways to prevent identity theft and measures to recover after being victimized by identity thieves. Still, one of the best ways to guard yourself against identity theft is to understand how it works and how it affects your credit.

Credit is a fickle thing, and though it is regulated by three major reporting agencies and a mass of government bureaus, mistakes are still made and crimes committed. As a consumer, it is your responsibility to help protect your own credit and report wrongdoing. Identity theft can occur from someone stealing a wallet or purse, which usually contains an ID, checkbook with banking information, credit and other cards, and sometimes a birth certificate and Social Security Card. You should never carry your SSN or birth certificate with you. There should be a copy in a home safe, and the originals should be in a safety deposit box. But, when gathered together, these items are a prime score for a thief who can then go and use your existing cards or apply for new accounts, often before you even know the stuff is missing. Many banks and credit card companies will now help monitor your accounts to watch for unusual spending habits and purchases, but this is not entirely safe.

Once a thief has done something with your identity or current accounts, it’s only a matter of time before the accounts or balance defaults, and you start to receive harassing phone calls and letters demanding payment on a debt you know nothing about. The longer the debt has been there, the more difficult it is to get off your credit report, especially if you failed to report the identity theft or have no way to prove you did not open the account. This then creates bad accounts, lengthy arguing, and disputes with creditors and the reporting agencies. All the while, your credit score is dropping, and you are finding yourself with a hard time getting the credit and approvals you have worked hard for.

This situation can be overwhelming and detrimental, and some people never recover from identity theft. It can ruin your credit, especially if you are not on guard or on top of your credit report regularly. Take the time to learn about credit reports and scores and how identity theft affects them, and what you can do to find a way to prevent identity theft from happening to you. Suppose you do become a victim of identity theft. In that case, it’s vital you report it immediately and start working to recover from the incident as soon as you notice something is wrong.

With a bit of work and some diligence, you can learn how identity theft affects your credit and take the steps necessary to prevent it from happening to you and your family while also putting together a recovery plan in the event of identity theft that will help you spring back fast and with minimal repercussions to your financial future and well being.

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