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How to Repair Identity Theft

When it comes to your personal credit, what you don't know can hurt you. In a study completed in 2004 by the U.S. Public Interest Research Group (U.S. PIRG), as many as 79 percent of credit reports contain errors. A quarter of the reports checked had errors so serious that the consumers could be dumped into higher-interest-rate categories or denied credit altogether. Whether listed as the result of identity theft or an innocent typo, errors on a credit report can have serious repercussions for the victim.

Even utility companies, cable companies and cell phone providers pull the credit reports of interested parties


Courthouses, workplaces and rental offices routinely pull credit reports and use the information in them to judge our character. Auto and property insurance companies use the information in our reports to decide how much to charge us. People with poor credit appear to file more claims and therefore cost insurance companies more money. Even utility companies, cable companies and cell phone providers pull the credit reports of interested parties before deciding what types of services they'll offer each customer and the price at which those services will be offered.

Simple Mistakes

Accurate credit information is important. So how do so many mistakes manage to creep into our credit reports?

Experian, one of the three major credit reporting agencies, receives between thirty to forty million new bits of information every day. Because of the privacy rights of consumers and the huge amounts of data they receive everyday, credit bureaus have no way of catching mistakes or screening for individual errors. With two other credit bureaus, TransUnion and Equifax, besides Experian collecting information, the chances of errors getting through are overwhelming.

The relationship between the bureaus and the creditors is also problematic. Communication between the two is basically one-sided as the creditors send information and the credit bureaus receive it. This means that although the credit bureaus may be aware of an error and even remove it from a person's credit report, the creditor will probably continue reporting, allowing the erroneous item to continue popping up in your credit history.

Errors can also occur when the records of different people are mistakenly placed in the histories of others. With so many people in the United States, many have names similar to if not identical to others within the country. Social Security numbers and birthdates are used to assure that credit histories follow the right people, but with credit applications being filled out by less-than-perfect humans and then being typed in by other just-as-imperfect humans, mistakes are inevitably made. One simple typo can end up sending one person's credit information to another's report.

The Real Nightmare: Identity Theft

Credit mistakes can be annoying and frustrating, but at least they aren't made on purpose. Identity theft is something else altogether. Average Americans don't take the time to check their credit reports until they're applying for a big-ticket item like a car or home. The Federal Trade Commission (FTC) found that 20 percent of the victims of identity theft didn't realize what had been done to them for more than two years.

According to the FBI, identity theft is the fastest-growing white-collar crime in the United States. Every week, millions of Americans toss credit card offers into the trash without realizing that their names and addresses are on those applications and use their Social Security numbers to access banking, medical and other services. Meanwhile, thieves dig through our garbage cans, steal our wallets, and hack into our databases. That carelessly thrown away credit card offer can become a living nightmare if found by the wrong people.

If you suspect that you've fallen prey to identity theft, there are several things you can do right away to minimize the damage. The FTC provides instructions on their web site at www.ftc.gov/bcp/edu/pubs/consumer/idtheft/idt04.pdf.

Moving On

Recent changes to the Federal Fair Credit Reporting Act (FCRA) allow consumers to order free copies of their credit reports, one annually from each of the three major credit reporting agencies. By encouraging people to monitor their own credit reports, spot errors, and dispute them, the FCRA hopes to discourage identity theft and raise the accuracy and reliability of credit reports in general.

If you find that your credit report has mistakes or has been deliberately tampered with, you can dispute the information with the credit bureaus-and the sooner you get started, the better off you'll be. questionable listings can be hard and time-consuming to fix. In such situations, credit repair professionals can provide a valuable alternative to fighting it out on your own. If you choose to get help with the problems you find, be sure to find and go with a reliable, experienced and verifiable company.

Mistakes happen and we're all vulnerable to the treachery of thieves, but as they say in the world of sports, the best offense is a good defense. Undoubtedly, the best you can do to defend your credit is to stay informed and knowledgeable about what's written on your report. You'll be glad you did.

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