Photo: By trawin on Flickr
Always be on the lookout for credit card fraud because if it happens to you, it could really hammer your credit score.Good thieves usually apply for a bunch of other credit cards and loan applications under your name. Each hard inquiry—i.e., pulling your report to request a line of credit—will ding it, especially if you already have late payments on record or the criminal applies for, say, 30 cards, according to Experian, one of the three credit card bureaus.
What’s worse, sophisticated credit card fraudsters could then change your billing address to delay the length of time it takes you to notice your newly opened lines of credit. Unless you call in the fraud within the first 60 days of it happening, you will be held partly liable for the debt incurred, says Identitytheftcreditcard.com.
If you don’t have the funds to pay it off, you could find yourself with a plunging credit score as late payment after late payment accumulates.
Unfortunately, once credit card fraud has happened to you it can be very difficult to undo. You must convince lenders, and credit bureaus that fraud was actually committed, and the black marks should be erased from your report.
Lenders, of course, will be reticent because many of them will have to take the financial hit. Identitytheftfraud.com reports some people pay up to $10,000 and spend 600 hours trying to undo the damage.
To avoid credit card fraud you can take precautionary action without investing in identity theft protection, which can cost about $150 a year.
Guard your information. Be wary of using your credit card when making online purchases. Clear your passwords and logins from the computers you use. Don’t fall for those pop-up sale gimmicks on the web that promise you a great deal as long as you enter your name, birth date, email, address, etc. Make sure to shred documents with sensitive information like your bank statements.
Check your bank and credit card statements. If something is awry, you’ll catch it a lot faster if you’re paying attention. When you’re a victim of credit card fraud, often there will be standout, crazy purchases you couldn’t have possibly made.
Every once and while double-check your mailing address with banks and the post office. It will help you stop frauds from keeping delinquent notices a secret from you.
Keep up with your credit report. Every year you can get a free credit report from the three credit bureaus, Experian, TransUnion, and Equifax. There are also free online services like annualcreditreport.com. Just don’t check it all the time because it can ding your score after a while.