Monitoring your credit reports should be a staple of your financial routine, much like checking your bank and credit card accounts. Even if you rarely use the credit you already have or aren’t planning to apply for credit any time soon, reading through your reports consistently is critical as it can help you catch signs of fraud early.
Fraud on your credit report
Fraud on your credit report can appear in multiple ways. A series of hard inquiries you aren’t expecting may signal that someone has your personal information and is trying to use it to open credit card accounts in your name. Open and active credit accounts you don’t recognize on your credit report could be a sign they succeeded.
Fraud can also happen on accounts you’ve opened. For instance, say your credit report shows a series of missed payments on a credit card you forgot you had and never use. That may indicate a fraudster got a hold of your credit card information and is using it to make purchases.
Reporting credit card fraud
Credit card fraud is a particular type of fraud, and there are multiple ways you can be a victim. One example is when a fraudster finds a lost card (or steals a wallet) and uses the card to make purchases. Another possibility is when a card’s important details are revealed digitally, like through a phishing scam, and they use that information to make a purchase online or over the phone.
Recovering from credit card fraud starts with contacting your lender. If you notice an unusually high balance on your credit card account, or you see purchases you didn’t make on your statement, reach out to the credit card company immediately. Your lender will take you through recent transactions on the card so you can either confirm or deny them as legitimate. They will start their own investigation and issue you a new credit card.
The information your lender requires for their investigation can vary. It all depends on the lender and circumstances. Many credit card issuers offer zero liability protection for fraudulent purchases if it is reported within a certain timeframe, but your out of pocket liability is limited to $50.
If you have specific questions regarding your credit card account, you should contact your lender directly. The information that appears on your credit reports is provided by lenders, so they will know more about your accounts than credit reporting agencies will. When the fraud investigation is resolved, read your credit report to ensure updates to your account information and payment history in your credit report is accurate and up to date. Credit report updates may not happen immediately. Your lender can tell you when they expect to provide updates to the credit reporting agencies.
You don’t have to wait until your monthly statement to go through your transactions. Many banks have online access to your accounts and mobile apps, so your credit card account information is always handy. Even if you don’t use the card or don’t use it often, checking your account every couple of days can help you spot any potential problems and respond to them quickly.
Mortgage fraud and auto loan fraud
With stolen personal information, identity thieves can do more than just make some fraudulent purchases. They may be able to open new accounts in your name. Taking out a mortgage or auto loan can be more difficult than a credit card because lenders tend to require more supporting financial information during the application process. But it can happen.
Inquiries on your credit report you don’t recognize, phone calls from dealers or lenders looking to confirm personal information and, of course, new loans you didn’t apply for appearing on your credit reports are signs someone is applying for credit using your information.
Those same warning signals apply to your child too. Children born in the United States have a Social Security number and are susceptible to fraud just like adults. Children make enticing targets since the identity theft can often go undetected until adulthood. If you think your child is a victim of identity theft, you can submit a secure Child Identity Theft Inquiry Form.
How to respond to fraud on your credit report
Becoming a victim of fraud can be nerve-wrecking and overwhelming. By taking the correct steps and contacting the appropriate agencies, you can resolve any issues with your creditors.
- Freeze & fraud alert: Once you’ve identified fraud, place immediate protection on your credit reports with a credit freeze and fraud alert. There is a difference between a freeze and fraud alert, but both are free and can be easily added or removed online. You can do this online through the TransUnion Service Center. You will need to freeze your credit reports with Equifax and Experian independently.
- Contact the company: Lender contact information will be in the account information section on your credit report. You want to make the lender aware of the fraud so they can take the necessary steps to freeze or close the accounts and start their fraud remediation steps.
- Report it: Contact government entities such as the Federal Trade Commission (FTC) and your local law enforcement agency to file a report. You will receive an identity theft report from the FTC which can be used as evidence when you submit a dispute.
- Dispute: Dispute fraudulent information on your TransUnion credit report with TransUnion. If the information is also listed on your Equifax and Experian credit reports, you will need to dispute the items with Equifax and Experian separately as well.
The key to a smooth fraud recovery is responding with urgency. Gather as much evidence as you can as you comb through your credit reports, credit account statements and any other financial information pertaining to the fraudulent activity. This kind of documentation can help if you need to dispute items on your credit report and when filing reports with the FTC and law enforcement.
Also, keep track of all correspondences with creditors, credit reporting agencies and government authorities. Have a special folder on your computer where you can store the documents. It’s a good idea to have physical copies as well.
Our blog, What to Do If Your Identity Is Stolen: Steps to Take, breaks down each step in more detail. Our Fraud Checklist also has a helpful list of action items.