Did you know that identity theft counts for more than half of all fraud in the UK? Let's learn how to protect yourself and your credit score, as well as how to remove fraudulent activity from your credit report.
Identity theft occurs when someone steals your personal information. Thieves often take your financial data or passwords. Then they use this information for identity fraud - using your details to get money. They might buy things in your name or use your bank details to get loans you didn’t apply for.
This hurts your credit score and makes it harder for you to access credit in the future.
Watch for these warning signs:
💡Helpful tip: Check your bank statements and credit report once a month. Report anything strange right away. Remember, if you're a victim, you're not alone! You can get help from places like Victim Support, Samaritans, or Action Fraud.
When thieves get credit using your name and don't pay it back, this shows up on your credit file where lenders can see it. This lowers your credit score and makes it harder to get accepted for credit. Some people only find out they've been targeted when they get rejected for credit they should have qualified for.
Missing just one payment can drop your credit score by multiple points. Missing three to six payments can lead to defaults, which hurt your score even more.
If thieves apply for many loans in your name quickly, this damages your score too. Lenders will assume these applications are yours and that you're having money problems.
Also, if thieves max out your credit cards, this increases your ‘credit utilisation ratio’ (the amount of credit you use, compared to what you have available), making you look irresponsible with money. Lenders may therefore think it's too risky to lend to you.
Identity theft happens when someone pretends to be you by stealing your personal information. They might take your name, address, or other important details. Then they can open new accounts, get loans, or even a job using your name! This can cause big problems that might take months or years to fix.
Credit card fraud is when someone uses your credit card without your permission. They don't need to steal your whole identity - just your card number, expiration date, and security code. They might buy things online or make charges you never approved.
The good news is there are a number of ways to protect yourself from credit card fraud. It is also usually easier to spot quickly, and your bank can often help you get your money back.
These bad marks on your credit report can hurt your score, even though they're not your fault. That's why it's important to check your credit report regularly and report problems right away.
To do this, you can follow these five steps:
Check your credit report for free with the three main credit reference agencies in the UK: Experian, Equifax, and TransUnion. Checking won't harm your credit score.
Report any problems to these agencies so they can talk to the lender. It might take some time to update your records, so report problems as soon as possible.
Don't worry if your report doesn't get fixed right away. The agencies need to wait for the lender to approve your request first. Then it can take another 4-6 weeks to change the information on your report.
Talk directly to your bank or lender if you're a victim of fraud.
Whether you'll get your money back depends on several things (like whether you approved the payment). If you don't agree with the lender's decision, you can complain to the Financial Ombudsman. They'll look at your case fairly, considering your situation.
If you're worried, you can put a fraud alert on your credit report. This tells lenders they need to complete further checks to confirm your identity before giving credit in your name. This makes it harder for thieves to pretend to be you.
Adding an alert won't affect your credit score, but you might need to pay for this service:
You can also ask the credit reference agency to put a password on your credit report. They'll write a note (called a Notice of Correction) with a password you choose. Lenders will see this note whenever someone applies for credit in your name, and will ask for the password before lending money.
This is free and adds extra security. But use a unique password that thieves can't guess. Remember, this might slow down loan applications.
To help catch thieves, report incidents to more than one organisation. Action Fraud can give advice and direct you to the right place.
You can call them on 0300 123 2040. If you're deaf or hard of hearing, use textphone on 0300 123 2050. You can also contact them through live chat or their online tool.
Once you've resolved the fraud issues and secured your identity, you might want to remove the fraud alert from your credit report. Here's how:
Remember, only remove fraud alerts from your credit report when you're completely sure the identity theft issues have been resolved. If you're still concerned about fraud, you might want to keep the alert active for your protection.
By taking these steps, you can fix your credit report after identity fraud and learn how to remove fraud alerts when you're ready. The most important thing is to act quickly and keep a close eye on your credit report in the future!
Read on for more tips on spotting and stopping scams.
Disclaimer: We make every effort to ensure content is correct when published. Information on this website doesn't constitute financial advice, and we aren't responsible for the content of any external sites.
Zubin is a personal finance writer with an extensive background in the finance sector, working across management and operational roles. He applies his experience in customer communication to his writing, with the aim of simplifying content to help people better understand their finances.
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