A reader: My wife had her identity stolen this summer. We don’t know how it happened. We filed a police report and contacted a credit reporting agency. Here’s our dilemma: We received letters from credit reporting agencies telling us that credit has been applied for in my wife’s name. Because of the fraud alerts, the credit has been denied. Now, my wife’s credit score drops every time credit is denied and we have to write a letter to get the “ding” taken off to each credit reporting agency. Is there anything we can do to stop this circus?
Action Line: Unfortunately, identity theft can be long and painful. Your credit score is used to determine whether or not you can be given credit. It can also affect the terms of the loan such as the interest rate or time allowed for repayment. The Federal Trade Commission says to remember that “every inquiry isn’t counted: for example, inquiries by creditors who are monitoring your account or looking at credit reports to make ‘prescreened’ credit offers are not considered liabilities.”
A credit freeze is something that may help. This is not the same as a fraud alert. Scambusters.org tells us that a fraud alert is more commonly used when you suspect your identity might have been compromised. In this case, companies can seek a copy of your credit report but the reporting agencies have to contact you with a request for your permission.
An initial alert lasts for 90 days, but you can protect your credit longer — up to seven years — with an extended fraud alert. If you’re in the military, there’s also a mid-stage, allowing you one year of protection. To implement a fraud alert, you only need to contact one agency and they will let the others know. In the case of both a freeze and an alert, the important thing is to implement them as swiftly as possible.
If you choose to put a credit freeze on your wife’s account, she will still be able to get a copy of your annual credit report at www.annualcreditreport.com or with each agency listed below. She can still open a new account or any other transaction. If you want someone to be able to verify your credit, you must ask for the freeze to be removed temporarily or permanently. The credit reporting agency may charge a fee for this. If you have been the victim of id theft or are a senior citizen, it is usually free. If you have a police report the freeze can be done free. Here are steps to place a credit freeze on her account if this decision is right for you:
• Contact all three major credit reporting agencies directly. (Transunion, (800) 916-8800,www.transunion.com
; Experian, (800) 397-3742,www.experian.com
; Equifax, (866) 640-2273, www.equifax.com)
• Make sure you know how long the credit freeze will last.
• Make sure you find out if any fees are involved.
• Make sure you have a good understanding of how to remove the credit freeze and how long it takes.
Other tips to increase your credit score:
• Closed unused accounts.
• Pay your bills on time.
• Never max out your cards.