How Identity Theft Affects Your Credit
Identity theft is a growing national epidemic. The Federal Trade Commission's 2003 report on identity theft called it the fastest growing crime in the nation, with nearly 500,000 victims, costs to businesses of $48 billion, and costs to consumers of nearly $5 billion.
Credit Factor Corporation is a leading directory of credit report providers and the largest resource about credit management for consumers. Recent studies conducted by the Public Interest Research Group found over 70% of credit reports contain errors.
Incorrect information in your credit file makes your credit score lower. As the result you get a higher APR when you: take a loan, open a new credit card account, lease a car or every time when you take credit.
29% of the credit reports contained even more serious errors that could result in the denial of credit. "Serious" errors included false delinquencies, public records or judgments that belonged to a stranger, or credit accounts that did not belong to the consumer. If your identity has been stolen and somebody has taken credit on your name you may get huge financial problems. It is much easier to investigate such kind of situation before it is reported to a collection agency. After it is reported to a collection agency and an accordant record appears in your credit file, you may be denied credit at all.
The solution is to take a look at your credit report and become sure that your credit situation is under control.