How I protect myself from identity theft

Correct an Identity Theft Issue As Soon As You Detect It

Identity theft can hugely affect your credit score. It generally causes low credit score and this in turn has negative impacts especially on one’s financial situation.

How does identity theft occur? Identity theft can occur in a number of ways. Here are some of the ways through which identity thieves gain access to people’s credit card information:

1. Theft of mails

Identity thieves can steal bank statements, credit card statements, and credit card offers which have been mailed to you. This kind of theft is likely to occur in cases where people leave their mailbox open. The identity thieves can also fill out a change of address form and send it to your bank thus leading to the bank emailing them your credit card information.

2. Skimming

Skimming is a process by which identity thieves steal credit card information using ATM machines. The identity thieves attach data storage devices to the ATM machines so as to enable them gather information about the credit cards. The storage devices retrieve information from a credit card each time one inserts his or her card into the teller machine.

3. Computer hacking

Identity thieves can hack into a computer and obtain information which pertains to your credit card.

4. Collusion with unethical bank employees

The thieves can also pay some bank employees so as to divulge to them information about a customer’s credit card.


5. Fraudulent emails

Identity thieves can send you emails asking you to confirm to them some details about your credit card. In most cases, people unsuspectingly send them their information since they have domain names which are similar to that of a bank or a credit card company website. The emails thus appear genuine.

6. Physical theft

This is the case whereby the identity thieves directly steal credit cards from people. They can for example snatch your purse or wallet away from you.

How can identity theft affect your credit score?

Identity theft can affect your credit score in a number of ways. First, the identity thieves can make inflated purchases in your name and this may leave you with very high bills which you may not be able to pay. Inability to pay bills usually leads to one having a low credit score.

Secondly, identity thieves can conceal all the transactions they have made using your credit card. You will therefore not be aware of the transactions and the deadline for repaying the bills may pass with the bills still unpaid. High and unpaid bills lead to a low credit score.

Thirdly, identity thieves can use your credit card information to open accounts in your name and then make transactions from these accounts. The bills from these accounts will be charged on you and since you may not be aware of them or you may be unable to pay them due to financial limitations, your credit score will go down.

Lastly, identity thieves can use the credit card information to withdraw all the money from your account. This may leave you financially dented and unable to pay your bills. Inability to pay your bills in turn leads to you having a low credit score.

What to do about identity theft

Identity theft is costly. When banks and creditors notice a low score on your credit report, they are likely to be hesitant to give you loans. Also, car insurance companies may be reluctant to insure your car if you have a low credit score. Identity theft does not only affect your relationship with creditors and insurers, it can also affect your relationship with future employers. Some employers may be reluctant to hire you if you have a low credit score since this can portray you as an irresponsible person. In addition to everything, your landlord may also have doubts about your ability to pay rent if you have a poor credit score.

Because of the detrimental effects of identity theft, it is important to act to correct an identity theft issue as soon as you detect it. You should immediately call your credit card company, alert them of identity theft and ask them to cancel all the affected credit accounts. Secondly, you should file an identity theft report with the police then send copies of this report to each of the three credit reporting bureaus. You should also notify your creditors that you have been a victim of identity theft. On top of these, you should file an identity theft complaint with Federal Trade Commission.

This article by John McConnell first appeared on Pyramid Credit Repair and was distributed by the Personal Finance Syndication Network.

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