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Tuesday, October 6, 2009

First clues that your identity has been stolen

Article after article after article about identity theft urge consumers to monitor their credit reports to see if they are a victim of identity theft.  But what exactly should you look for first? 

Most people learn their identity is stolen when they get a letter or call from a creditor or collection agency attempting to collect a debt that they have never heard of and certainly never incurred.  But those that check their credit reports typically do not first see an account they do not owe.  Instead, these people first learn of their stolen identities when they see one of two things - either an address appears on their credit report where they never lived or an inquiry appears indicating an application for an account for which the person never applied.

The incorrect address could be an address used by the identity thief when he or she applied for a fraudulent account in the victim's name.  Credit bureaus get the addresses they list on consumers credit reports when information is reported to them from third parties (i.e. the consumers themselves, current creditors of the consumers or potential creditors who the consumer (or the identity thief) have submitted an application to).  Thus, an address on a consumer's credit report that he or she does not recognize is often a first sign of identity theft.

The other first sign is an inquiry that the consumer does not recognize.  However, there are many inquiries on every report that the consumer likely does not recognize.  These are primarily promotional type inquiries, which are done by companies that send you junk mail to see if you meet whatever criteria they are looking for.  Promotional inquiries that a consumer does not recognize is NOT a cause for concern.  What IS a cause for concern is a regular (a.k.a. "hard") inquiry which the consumer does not recognize.  A hard inquiry is only caused by a application for new credit, insurance or employment.  Thus, the consumer should almost always recognize the regular, hard iquiries on his or her credit report.  If they don't, that likely means someone else applied for credit in their name.

So, if and when you follow the advice of countless identity theft "pundits" and check your credit report to see if your identity has been stolen, look first for incorrect addresses in the current and former address section (usually towards the top of the credit report) and next for unrecognized hard inquiries in the inquiry section of the credit report (typically toward the bottom of the report).  And, if you find out you are a victim of identity theft and need help or advice, I am only an e-mail or phone call away at ckittell@merkel-cocke.com or 662-627-9641.

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