Your credit report contains personal information such as your name, address, debt and payment history, and bankruptcy records. It is used by lenders to determine your creditworthiness and is also a useful method of protecting yourself from identity theft. Therefore, it is recommended that you review your credit report at least annually to ensure accuracy. Additionally, you can set up credit monitoring alerts to notify you, by email or text message, of key changes to your credit report. By reviewing your alerts, you can proactively protect yourself from identity theft and credit reporting errors.
New Account Alerts
Since new accounts may take six months to appear on your credit report, new account alerts can help you quickly identify fraudulent activity. If you receive an alert that an unrecognized new account was opened, your identity may have been stolen. Some account issuers hold you liable for a portion of the fraudulent charges; therefore, you must contact the issuer and freeze the fraudulent account immediately. Additionally, you should file a police report identifying the fraudulent account. Once you provide a copy of the police report to the three nationwide credit bureaus, the fraudulent account will be blocked from your credit report.
Name and Address Change Alerts
Unexpected credit report changes may signify that your identity has been stolen or is about to be; therefore, if you receive an unauthorized name or address change alert, report it to the credit bureaus right away. A common fraudulent act involves contacting one of your established creditors, reporting a lost or stolen card, and providing a new, fraudulent address for your creditor to mail the replacement card to. Since unauthorized address changes may be an indicator that someone is using the mail to commit identity theft, the offense should also be reported to the U.S. Postal Inspector.
Past-Due Payment Alerts
Past-due payments will decrease your credit score and appear on your credit report for seven years. A single late payment can reduce your credit score by 80 to 110 points. If you receive a past-due payment alert on an account you inadvertently forgot to pay, early detection may help reduce the negative impact. On the other hand, the alert could also signify the theft of your identity, as the past-due account may be fraudulent. In that case, you must notify the credit bureaus immediately to avoid further deterioration of your credit.
The FBI reports bankruptcy fraud as a crime commonly associated with credit card fraud and identity theft. Bankruptcy filings appear on your credit report for up to 10 years; therefore, if you receive an unexpected bankruptcy filing alert, you must immediately notify the credit bureaus. You may also write to the U.S. Bankruptcy Trustee where the filing occurred.
Fair Credit Reporting Act
The FCRA was enacted in 1970 with the intention of protecting consumers from credit reporting errors and information sharing with unauthorized parties. The FCRA provides dispute guidelines in the event you discover an error on your credit report. The FCRA also establishes your right to place a fraud alert or credit freeze on your credit report if you suspect your identity has been compromised. Fraud alerts can last between 90 days and seven years, while a credit freeze may be placed indefinitely.
- Federal Trade Commission: Disputing Errors on Credit Reports
- ConsumerFinance.gov: Why is it Important for Me to Review My Credit Report?
- Equifax.com: Preventing Identity Theft
- Transunion.com: Credit Disputes, Alerts & Freezes
- CreditKarma.com: How Late Payments Affect Your Credit Score
- FBI.gov: Bankruptcy Fraud
- FoxBusiness.com: A Guide to Your Rights Under the Fair Credit Reporting Act
Blyss Cruz has called Alaska home for 30 years. She has written numerous business, financial and legal documents related to her long-time employment in both the public and private financial sectors. Cruz holds a B.S. in Paralegal Studies and an MBA in business and accounting.