The Credit Cleanup Book by Shindy Chen

Author:Shindy Chen [Shindy Chen]
Language: eng
Format: epub
ISBN: 9781440831836
Publisher: ABC-CLIO

FRAUD ALERTS, CREDIT FREEZES, AND CONSUMER STATEMENTS

If you are certain you’ve been a victim of identity theft, then you can place a fraud alert on your own credit report to dissuade creditors from issuing any new credit.

The fraud alert itself, in most cases, won’t prevent the issuance of new credit; rather, it will provide a red flag to hopefully alert the lender to reverify an applicant’s identification. Identification should be verified with documents such as a driver’s license, passport, social security card, or even a residential history, to prove that the person requesting the new credit is in fact, the right person. This was the protocol when I worked in the mortgage industry, as fraud alerts were quite common on credit reports. When this occurred, extra underwriting conditions were required prior to full loan approval, such as the above-mentioned verification of identification or residential history with documentation.

Remember that any fraud alerts will also show in in the front or general information and alerts section of a credit report.

Some states will allow for consumers to place credit freezes on their personal files, which prevents anyone from opening an account in your name. This could be helpful if you suspect anyone, or even an ex-spouse, is using your social security number, address, and other personal information required, to open a new account in your name. After all, lenders don’t often question spouses applying for joint loans, if a spouse has a partner’s full personal information and perhaps even a power of attorney?

A vengeful ex-spouse could file a bankruptcy in your name because many districts don’t require identification when a bankruptcy is first filed. These types of bogus filings will get recorded as public records and are criminal; however, some vengeful people are capable of doing such a filing, and you’ll have to seek a bankruptcy attorney to get the filing expunged.5

If you can’t place a credit freeze on your report, then the fraud alert would be your best alternative bet.

Consumer statements, on the other hand, are generally not read, not scored by computers’ credit-scoring systems, nor do they have any bearing on any other part of a report. As first mentioned in Chapter 3, “The Credit Report,” these will not help your credit score in any way and don’t particularly help to explain derogatory credit. The expression Actions Speak Louder than Words is applicable here in that your actions to successfully dispute negative information from your credit report will be much more effective than simply stating the situation and doing nothing.

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