Nearly 12 million Americans have fallen victim to identity theft, and the total financial loss attributed to identity theft in 2013 is $21 billion so far, according to the U.S. Department of Justice.
Identity theft affects more Americans every day. Regular monitoring of a credit report helps keep track of current and closed accounts, negative items and credit inquiries. Suspicious changes to these indicators may be a sign of identity theft and fraud.
As National Protect Your Identity Week (Oct. 20—26) nears an end, think about how you can actively protect your identity. Here are several ways to use your credit report to identify unauthorized activity and stop possible identity fraud before suffering potential financial loss:
- Check information — All credit reports include basic personal information. This includes full name and variations, current and past addresses, Social Security number, birth date, spouse's name, and current and previous employers. Misspellings of your name or unknown addresses could be signs of identity theft or that information was reported incorrectly to the credit reporting agency.
- Monitor current accounts — Check items in open accounts, such as auto loans, mortgages and credit cards, to confirm if there is a balance. These accounts may appear "in good standing," reflecting consistent payments, or "delinquent" if payments have not been made on time. Check dates to ensure they accurately reflect when each account was opened or when activity occurred. If there are mistakes, it may be an indication of a fraudulent account or that an unauthorized individual is using an existing account.
- Look at closed accounts — Inactive accounts still can appear on a credit report. Different items remain for varying lengths of time. (Past accounts speak to the length of your credit history and your reliability in paying on time.) If someone hasn't been regularly monitoring for identity theft, checking closed accounts can help to make sure it hasn't already happened.
- Verify negative items — Negative information, such as past-due accounts, court judgments or bankruptcies, can lower a credit score and identify someone as high-risk to potential lenders. If any of these items are incorrect, it could indicate identity fraud.
- Look into all credit inquiries — Credit inquiries indicate who has looked at a credit report (a creditor). Creditors and lenders are interested in the payment history and how often an individual applied for credit. These credit inquiries also can serve as an early warning that identity thieves may be trying to fraudulently open accounts.
At a minimum you should check your credit report at least once a year. You can request a free copy once every 12 months at www.annualcreditreport.com.
Credit monitoring alerts individuals to changes in their credit reports, which is an effective way to identify potential fraud.
Thanks for reading.
The "Ask Experian" team