There are a variety of reasons why it’s important to regularly check your credit reports, but one of the primary motivators is to ensure that you haven’t been the victim of fraud or identity theft. While statistics about the incidence of identity theft vary, it’s safe to say that millions of Americans are victims of identity theft, and that about 15% of victims don’t realize their identities have been stolen for four years or more.
The Fair and Accurate Credit Transactions Act of 2003 (FACT) amended the Fair Credit Reporting Act (FCRA), in part to help consumers combat identity theft. It’s thanks to FACT that you are entitled to one free credit report each year from each of the three major consumer reporting agencies (Experian, Equifax, and TransUnion) via www.annualcreditreport.com.
FACT requires consumer reporting agencies (also known as credit bureaus) to provide you with a list of your rights if you think you’ve been the victim of identity theft. It also allows you to create and place an alert on your credit report if you think you’ve been the victim of fraud or identity theft. Consumer reporting agencies must keep the alert in your credit report for 90 days. If you request an extended fraud alert, it will remain in your file for seven years.
In addition, if you identify certain information on your credit report as being the result of identity theft, credit bureaus are required to block that information within four days.
What to Do if Your Identity Has Been Stolen
The Federal Trade Commission outlines four steps you should take if you’ve been the victim of identity theft:
- Place a fraud alert on your credit reports and review your credit reports. You only have to contact one consumer reporting agency (Experian, Equifax, or TransUnion); the law requires one credit bureau to notify the others in the event of identity theft. Each of the credit bureaus will send you a free copy of your credit report.
- Close the accounts that you know, or believe, have been tampered with or opened fraudulently. Follow up with written notifications and supporting documents (but send copies, not originals). Send your notifications via certified mail, with return receipts requested.
- File a report with your local police or the police in the community where the identity theft took place, and ask for a copy of the police report. This will help you establish proof of identity theft.
- File a complaint with the Federal Trade Commission, at http://www.ftc.gov/bcp/edu/microsites/idtheft/.
To learn more about identity theft, visit the Federal Trade Commission’s consumer resource center, at http://www.ftc.gov/bcp/edu/microsites/idtheft/.
