There are many different types of credit fraud being perpetrated every day. Many people assume that as long as they don’t lose a credit card or give out their social security number that they cannot be a victim of credit fraud, but this is not the case. You need to know the different types of credit fraud so you can protect yourself, reducing the chances of your being a victim. Make sure that you don’t commit credit scam, because many people do things all the time that could be considered credit fraud!
Common Types of Credit Fraud
The most common type of credit fraud takes place when a person uses false information on a credit card application. In many instances someone will use the information of another person to apply for the credit card. In addition to this type of credit fraud, a lot of people also commit fraudulent activity by giving false information about their finances. Many people do not consider this fraud, but it is in fact a fraudulent activity.
Credit fraud also takes place when you apply for a loan and give inaccurate information on purpose, such as job or billing information. Many people give the information of a supposed co-signer who actually knows nothing about the loan. What this does is allows for the person to get a loan on false pretenses, the false pretenses are a form of credit fraud. If the person does not pay on the loan it not only affects their credit rating but also the credit rating of the supposed co-signer.
Another form of credit fraud takes place when one person takes the identity of another and uses it to get themselves credit in another person’s name. This is known as identity theft, and what the scammer does is preys on someone and then pretends to be them, getting credit in their name and spending until their credit is destroyed and they cannot get another credit card or loan in that persons name. This is one of the most destructive types of credit card fraud and in many cases the whole process of identity theft and total destruction of the person’s good name takes less than a week.
Credit fraud does not just occur with one or two people, there are often whole companies involved in the process. Many companies will actually allow for people who do not qualify to be approved for loans. They do this by changing information or manipulating information in such a way that a lender will agree to finance the loan. Not only does the individual get the loan that they need, the brokerage actually gets payment for their involvement in the loan.
Credit fraud also takes place at a lot of retail sources. Many consumers will apply for financing through a retailer and will need to provide all of their information to the retailer to apply for the credit. This information is often used later by one or more people involved in credit fraud within the store. Many times the credit information will be used to apply for loans, get photo identification, and even wipe out a bank account and stocks! When you share this information with someone they have the ability to not only create accounts in your name, but also empty out those that you currently have.
There are some things that you can do to be sure that you are not a victim of credit fraud. First, you can make sure that you sign up for a credit alert program, which will notify you if your credit has been accessed or if there have been any changes in your credit standing, new accounts opened, etc. If you have already been a victim you need to contact the credit agencies and have them put a security alert on your online credit report and also write a victim statement to be kept on file. If you know that there has been fraudulent activity, contact the creditor and follow the process of refusing the debt and getting it taken off of your credit profile. Even if you have never been a victim of credit fraud you need to be sure that you are reviewing your credit report annually, as this will allow you to catch any inaccuracies sooner.