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Credit Experts: Beware of Identity Theft

By Sally Maison
Published: Sunday, September 6th, 2009

Credit specialists warn consumers about identity theft since it can really hurt one’s credit score. Worse, a consumer will be charged for debts and loans he has not made. Just this Friday, a woman was charged with identity theft for stealing her relative’s identity and making purchases under the relative’s Social Security number. As a result, the unsuspecting relative’s credit score dropped to a sub-prime level. What is even more shocking for him is that he accumulated $29,500 in debt.

IS4086RF-00034199-001Dixie Lee Nelson, 53, faces charges of identity theft and card forgery. Police report reveals that Nelson’s relative went to apply for a home loan last July 31. However, the creditor rejected the application since the relative has a very poor score. After doing some research and investigation, the relative found out that Nelson had “gotten credit at a number of places and was buying a house, car and had a credit card.” Nelson used her name in acquiring debts, but used her relative’s Social Security number to pull off the identity theft. Two fraudulent accounts worth $5,973 and $23,535 led the relative to amass tens of thousands in debt.

Credit experts say that consumers should be more careful with their financial data. They should be more careful with whom they share their credit card, ATM, and Social Security numbers with. The economy of the country is not as good as it should be and now is not the time to have a poor financial score. Aside from guarding one’s identity, experts give a few more tips to keep a score in good shape.

Consumers are advised to limit the amount of money they owe. They should avoid applying for loans as much as possible. Consumers should also keep their cards even if they are not using them, especially those which have good payment history. Another classic way of improving a score is by paying debts on time. If they have delinquent payments, they should settle their bills as soon as possible. Being late for more than 30 days will severely affect scores or ratings.

A few years ago, consumers who had a credit score of 680 were considered good payers. Today, the good score is 750. With this kind of score, consumers can apply for more flexible and lower interest loans. Laurie Tufford, Consumer Credit Counseling Service, says that it can take two years to rebuild a credit score after a consumer pays every overdue bill he has. Consumers should not be discouraged though because the sooner they work on their credit score, the sooner they will be able to rebuild it.

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