Loker Law

Making Sense Of Credit Reporting Agencies, Combating Identity Theft, And Repairing Damages

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A padlock resting on a stack of credit cards, symbolizing financial security and protection against identity theft and fraud.

Have you or someone you care about been a victim of identity theft? Did you know that the prevalence of identity theft in the US is huge? Last year, the Federal Trade Commission (FTC) reported that there were 4.8 million identity theft reports. This brings up the question of the degree to which credit bureaus are a resource for monitoring your financial health and protecting against identity theft, or if they contribute to identity attacks and credit repair scams.

The Role Of Credit Bureaus

Credit bureaus—technically, credit reporting agencies—are the entities that, together, track and maintain virtually every piece of your financial life that a creditor might want to know. There are three major credit bureaus in the US: Equifax, Experian, and TransUnion. To create your report, they gather data from banks and lenders, credit card companies, and more. Your credit report might be all someone needs to access your private accounts.

One of the services provided by credit bureaus is to track your credit activity. They gather updates from your creditors and compile information about your payment history, any debt you owe, and your credit limits. Lenders use this information to help them evaluate your creditworthiness and gauge the risk of extending your credit.

Furthermore, credit bureaus determine your credit scores from your credit report. Credit scores are three-digit numbers, like the FICO score and VantageScore, which purport to give lenders a quick assessment of your creditworthiness. Lenders rely on credit scores to determine whether to extend credit, under what terms, and up to what limit.

Understanding Identity Theft And Its Effects

Identity theft carries compounding risks to your financial security. It happens when someone uses your personal information, like your Social Security number or credit card information, without your permission to commit fraud or other financial crimes. Knowing what types of credit fraud can be perpetrated with your identity is one way to protect yourself and your credit.

One of the forms that credit fraud can take (and, often, one of the first signs that you’ve had your information stolen) is bogus credit card charges. A fraudster might buy goods or services with your personal information or exploit weaknesses in your existing credit cards. It will be your job to sort out any unauthorized charges and pay any expenses incurred.

The other kind of credit fraud is taking out loans in your name without your knowledge. Thieves with your information can make auto loan applications or mortgage applications without your knowledge or consent. You can be liable for tens of thousands of dollars without ever knowing your information was used.

Identity theft can affect your credit report and your overall financial health. You’ll develop negative marks on your credit history, such as missed payments or exceeding your credit limit. All of these make it more difficult to get credit in the future. You may even be denied credit or required to pay higher interest rates because of the negative marks on your credit history.

If you do suspect that you have been a victim of identity theft and have committed a violation of your credit, you should promptly report it and take action to correct it.. Everyone is at risk of identity theft and credit fraud, so it’s advisable to monitor your credit, review financial statements and credit reports frequently for suspicious charges, and respond immediately to any warning signs of identity theft. 

Contacting Credit Bureaus And Reviewing Your Credit Report

Having your credit report reviewed on a regular basis is important for your financial health because you can be sure to keep track of the status of your creditworthiness. To make sure that the information in your credit score is correct and up to date, you’ll need to be informed about the credit bureaus you need to contact. The phone numbers and mailing addresses of each bureau can be located on their websites.

If you suspect that you have been a victim of identity theft and have committed a violation of your credit, take the following steps to protect yourself and your credit: 

  • Call the credit bureaus: Request fraud alerts or freezes from the big-three credit bureaus (Equifax, Experian, TransUnion).
  • Check your credit reports: Get a copy of your credit report from each bureau and review your account. Look for charges, unusual activity, or collections that you do not recognize, and report any fraudulent accounts or errors right away..
  • Report it to the police: Contact your local police department and report the identity theft. Get a copy of the report and save it for your files and to provide to creditors and the credit bureaus when necessary.
  • Put them on alert: Call your banks, credit card companies, and other financial institutions to tell them what happened. They can monitor your accounts for suspicious transactions and tell you what to do next.
  • Change your passwords and PINs: Change the passwords and PINs of all your accounts, including bank accounts, email and social media, making sure to use strong, unique passwords and use two-factor authentication when you can.
  • Protect your data: Be suspicious of unsolicited requests to share personal information, which could be a “phishing” attempt for identity theft. Check your accounts regularly and report suspicious activity as soon as possible.
  • Consult a lawyer: Find a lawyer who has experience with identity theft cases, understands your rights and can advise you on your legal options..

Taking Control: Credit Freezes And Fraud Alerts

Credit freezes and fraud alerts are two important weapons in the arsenal you might be using to protect your credit and prevent identity theft. Here’s what you need to know. 

A credit freeze, sometimes called a security freeze, is a tool that lets you prevent third parties from accessing your credit file. With a credit freeze in place, no one will be able to open new credit accounts in your name (including you) without your permission. Because your information won’t be available to lenders, fraudsters won’t be able to use it to take out credit either, even if they do have your personal information.

It’s surprisingly easy to put a freeze on your credit files. You can contact each of the three major credit bureaus—Equifax, Experian, and TransUnion—directly to initiate the freeze, and the freeze remains until you choose to remove it. A credit freeze generally protects against new applications for credit but won’t otherwise affect your existing credit accounts or your access to your credit report.

A fraud alert is a letter that goes on your credit file to alert lenders and creditors that your identity should be verified before granting new credit. The added step makes it more difficult for a thief to attempt opening an account under your name. To place a fraud alert on your credit file, contact one of the three major national credit bureaus directly. That bureau will then relay this fraud alert information to the other two. A fraud alert lasts for one year and can be renewed or extended at any time.

Contact Loker Law For A Free Consultation Today!

Resolving credit disputes is usually a lengthy, drawn-out process. It may be months before you see any results. In the meantime, your credit score is spiraling downward quickly. The longer negative reports remain on your record, the more difficult it may be to obtain a loan in the future. If you are tired of fighting a credit dispute, our team at Loker Law wants to help. We have dedicated our practice to assisting people like you in obtaining the results they require in order to finally move on with their lives. Give us a call today to schedule a free consultation and learn more about how we can help you get a fresh start.

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