Can Identity Theft Affect Your Online Credit Score?


Author: Pat Strickle

What exactly is the risk to your credit score?

The growing fear about identity theft is widespread. Over the years you may have established a good financial background or credit standing with one or more financial institutions. But, heaven forbid, you got yourself into a bad situation because someone got your personal information. Simply put, if someone gets hold of your details and uses them without your knowledge, your credit rating takes a hit. Over time, creditors or lenders will bring matters to credit or collection agencies. This then will lead to damage on the credit profile that will have an effect on your score. Regular credit score tracking is definitely recommended so that you can keep an eyen on any unusual activity.

What are the Scenarios?

Consider this, you're in need of funds and you really are certain that your loan application will be approved at once because you have maintained a good credit record with your bank. But, only to find out that you have an existing loan (which you never took out) AND you're simply not meeting the repayments. Ouch! Now your mind wants you to puke as well as shout out of frustration, right? It seemed like you've been warped into another dimension upon hearing the news.

Here are other scenarios where identity theft can adversely affect your credit rating. In a certain period of time (generally from six to 12 months), unpaid debts are entrusted to collection agencies by lenders or creditors. When this occurs, a collection account shows up in your credit history, and that carries a very damaging impact on your credit rating.

With regards to your healthcare data, when thieves make use of your data to acquire medical assessment or therapy, at no cost (which is precisely why they gain access to your personal info). Consequently, bills go unpaid within and the medical provider brings the matter to a collection agency. So, when you need to use your medical services yourself, it is most likely that you'll be rejected.

How to Manage It?

As they said, prevention is better than cure. Keep in mind these two crucial measures: careful safekeeping of all important credit records or documents and meticulous checking of these records.

Still, when the worst of the worst comes, meaning you've fallen into an identity theft victim, you need to report the incident at once to all concerned financial institutions with which you have accounts with.


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