May 31, 2016

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Credit Monitoring: How to Check Your Credit Report for Fraud

As a security best practice, we often advise people to check their credit reports to protect themselves from identity theft. This type of credit monitoring is helpful for spotting potentially fraudulent activity, but it’s not always a straightforward process.

How can you look at that list of numbers and creditor names and know what’s what?

Credit reports may have different formats from one another, because each credit reporting agency uses its own template. However, they all contain the same basic information. Make the most of your credit monitoring efforts by looking closely for these red flags:

  • Incorrect old addresses: Even if your current address is correct, be sure to pay close attention to previous addresses. Identity thieves may have committed mail fraud by using your name and another address in order to sign up for credit cards or open accounts.
  • Court decisions you didn’t know about: Part of your report will include a section usually called “adverse accounts,” which collects the negative items pulled from public records. These include court judgments, bankruptcy decisions and tax liens. This may be where you find out your identity was used in a courtroom without your knowledge. For example, a criminal may have claimed to be you during an arrest. Even if the claim amount is minor, it’s worth getting this fraud removed from your record, since it can count against your credit reputation.
  • Collections for bills you paid or never had: Often, debts that are significantly overdue are sold to debt collection agencies. Mistakes can occur during this process, however. For instance, if the company selling to a collection agency has inefficient bookkeeping practices or poor data management, paid debts may get bundled together with other records. In some cases, an identity thief may have been the one racking up the debt, and you may not find out until it appears as collection activity on your report.
  • Credit accounts you don’t recognize: Look carefully at all the data provided for your credit accounts, which can sometimes reflect over a decade’s worth of accounts you’ve opened and closed. This is one of the easiest ways to spot fraud during credit monitoring.
  • Inquiries that seem suspicious: Most companies that can claim a legitimate purpose — like offering you a credit account or signing you up for insurance — don’t have to get your permission to view your credit report. But others, including employers, need permission. Look closely at which companies and individuals have requested your report recently to make sure you’re not being targeted for fraud.

If you spot something that doesn’t look right, don’t hesitate to report the error right away. The sooner you can start an investigation, the less damage control you’ll have to do. You may also consider a credit freeze as the situation is getting sorted out.

By getting a better handle on the details of your credit report, it’s likelier your credit monitoring efforts will be more effective and you’ll maintain a fraud-free record.

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