Your credit rating is valuable and important for you to monitor. You are entitled to a free copy from each of the three reporting agencies. You may contact them at www.annualcreditreport.com. Stagger the reports over the year, periodically getting an update.
You are in the best position to know if the information reported is correct. Look at the work history and places you have lived. Do the loan and credit card balances seem correct? Be sure there isn’t any account listed that you don’t know about.
If you believe your identity has been stolen, place a fraud alert on your account with each of the credit reporting agencies. Your account is then flagged and a potential lender is supposed to take steps to verify that you have authorized the request. Fraud alerts can be effective if merchants are paying attention.
Fraud alerts are good for 90 days. If you are an actual victim of identity theft, the fraud alert can last for seven years.
Third party organizations will monitor your credit files for you. If activity occurs, you are notified. They will assist you in restoring your credit and identity. Your homeowners’ policy and car insurance policy may have coverage for identity theft. They will cover the cost of your time and out of pocket expenses to restore your credit. Liability for fraud on your accounts is limited to $50. You may have coverage on your homeowners’ policy; it may be less expensive and provide similar benefits.
A third option to protect your credit is to place a credit freeze on your account. It will prevent thieves from opening a new account in your name. However, it can be cumbersome to stop and start a credit freeze. Any time you want to open a new credit account, you have to authorize it with the credit agencies. This inconvenience may be worthwhile for you if your new credit activity is sparse. It can be challenging for business owners when leasing equipment or real estate, or when renewing credit lines.
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