What To Do After Noticing Fraudulent Activity On a Credit Report
Consumer fraud is big business in the United States. In 2016, approximately 15.4 million people were impactedby fraud or identity theft. The money these thieves manage to take each year isn’t chump change. In 2016, they made off with over $16 billion collectively.
So, the stakes are high, and fraud has the potential to derail your finances. Needless to say, you should stay on top of your credit report.The best way to do that is to regularly check for signs of fraud.
The Importance of Checking Your Report
So why should checking your credit report be a priority?
To answer that, we need to discuss the implications of fraud. All fraud isn’t equal. It can be a bummer to learn there is an unauthorized charge onyour debit or credit cards. But some instances of fraud have greater implications that can ruin your financial plans overall.
The worst-case scenario is that someone stole your identity. That’s much more of a headache than one simple unauthorized charge. With identity theft, someone uses your personal information (such as birthdate, Social Security number, and address) to open new accounts in your name.
That kind of fraud can hurt your credit considerably. For instance, an identity thief could open an account in your name and rack up bills. These may go unpaid, and this would negatively impact your personal credit score
A hit to your credit score may cost you thousands of dollars over time if you are stuck paying higher APRs. It may hinder you in other ways as well. It may limit your credit options to certain credit cards for building credit, which usually come with lower credit limits & higher interest rates. You may also have trouble qualifying for car loans and mortgages.
If the damage is severe enough, a bad credit score may even prevent you from being able to land certain jobs.
Filing a Credit Report Dispute
So what can you do if you either find an error on your report or learn your identity was stolen? You can take action by disputing the error. The key is to get started as soon as possible.
Contact the Credit Reporting Company
When you notice an error, your first step should be contacting the credit reporting company. Bring up the specific information believed to be incorrect. You may want to contact them in writing and give detailed explanations for every item you believe is false.
In the letter, you should ask for the questionable marks to be removed or corrected. To cover your bases, it’s a good idea to use certified mail with return receipt requested to send your letter. Make sure to keep a copy of the letter for your records.
You should get a written reply within 30 days. If the decision goes in your favor, the credit report will be corrected. If the decision isn’t in your favor, you need to move to the next step – contacting the creditor.
Contacting the Creditor
After no success with the credit reporting company, move on to contacting the involved credit provider.
Write a letter explaining your situation. Address the error politely, and ask for help in resolving the situation. It may take some time to receive a response.
If they determine you’re correct about the error, they now mustcontact the credit reporting agencies. After that happens, the agencies should fix the error.
If you’ve been toldthe error will be fixed, don’t take someone’s word for it. Check it out yourself by asking for updated copies of your credit reports.
If the error isn’t fixed, you should attach a brief personal statement to your credit report, which will give more insight into your particular situation. That won’t change your score,but it may help your case during a credit pull in the future.
Do Your Best
Sometimes, despite your best efforts, incorrect information will remain on your credit report. But if you take the proper stepsto correct it, you stand a much better chance.
To best protect yourself from the hardships of fraud, continue checking your credit report for any errors. You could be saving thousands of dollars in the process.
By Andrew, a Content Associate from LendEDU – a website dedicated to consumer education regarding all things personal finance.
Andrew Rombach - Guest Contributor
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