Fraud, Theft, and Your Credit Score

Fraud, Theft, and Your Credit Score

When applying for a mortgage, auto loan, or any other form of credit, you are required to provide various documents and details pertaining to your identity and financial situation. If a lender receives a fraud alert during the processing of this information, complications arise. This yellow flag on your report does not drop your score, but it can be a tedious issue to resolve. Ensure that you always protect your personal information to avoid situations like this because once fraud occurs, denial of a loan application may be the least of your worries.

 Fraud and theft can influence a person’s credit score in a variety of negative ways. When it comes to unauthorized spending, a compromised account may leave you with excessively large bills. Statements too costly to bare often result in missed or late payments, despite the fact that the debt was racked up by another. Most accounts have security procedures in place for such situations, so notify your creditors immediately to repair any damages to your credit score.

On the other side of the spectrum, thieves who empty accounts leave victims without any means of covering their other monthly expenses. Furthermore, some accounts require a minimum balance and falling below can result in foreclosure, which would impact a score negatively as well. Identity theft can have similar effects on one’s credit score, especially if the delinquent seek to acquire additional accounts to max-out. As can be seen, fraudulent activity can really hurt someone’s credit score in a domino-like manner.

Thankfully, a fraud alert does not hurt your credit score, so if your application’s been flagged, there’s time to set things right. Similarly, if you suspect something is wrong with an account, flag it immediately. Although this will inevitably lengthen the time it takes to take out a loan or line of credit, it’s necessary to prevent your report to stop it from ever reaching that critical stage. If you have fallen a victim of fraud, Trillium Auto Group can help rebuild your credit score. Call in to ask us how our auto loan plans benefit you!