Identity Theft and Your Debt
Modern technology has made it possible to apply for loans and credit cards without ever visiting a bank or credit union. Business can now be conducted over the phone, the computer, the fax, or through the mail. And while these changes have added a great degree of convenience they have created an opportunity for fraud and theft. It is now much more likely that an individual will become a victim of identity theft. Thieves now have the ability to easily assume one's identity and receive credit in their name. The result could be ruined credit and mountains of debt.
To lessen the risk of becoming a target for identity theft, there are several steps that can be taken. One preventative measure is placing a security alert on your credit reports. This alert is a statement which is placed on the report to tell creditors to be wary of fraudulent activity. When an alert has been included on your three credit reports, a creditor is required to contact you for verification before approving any additional credit.
Fraud and Security alerts were originally designed after something bad had happened such as having your credit cards stolen or lost. By the time you realized that someone had run up debts in your name, the only alternative was to call the credit card company. Unfortunately, in many cases damage had already been done. With this in mind, including security alerts are generally much more effective when used on a proactive basis. It is important to note that the alerts will stay in effect from 90 day to 1 year, depending on the credit bureau. This means that in order to keep the protection in affect you will need to renew it on a regular basis.
There is no way to completely protect yourself from the possibility of identity theft. Even security alerts are not full proof safety measures. The fact is that legally creditors do not have to contact you before issuing credit, however, many will honor your request. The bottom line is that the chance of an identity thief running up debts in your name are reduced when a fraud alert is used as a proactive measure.