One surefire way to make your life difficult is for your identity to get stolen. You may think it’s no big deal if someone uses your credit card number illegally – the bank will just “write it off” or you’re “not responsible for it.” But it’s not quite that simple. While some instances can be fairly easy to resolve, there are plenty of actions identity thieves can take that will have much more damaging effects.
- If someone uses your identity to secure credit or otherwise make purchases in your name, that bill won’t get paid. These items can hit your credit report and, as they continue to go unpaid, will lower your score. A low credit score can make it harder to borrow money for important purchases like a car or a house.
- By lowering your credit score, identity theft can also cause your auto insurance rates to rises. Most insurance companies will look at your credit score to help determine your rate (California and Massachusetts prohibit this practice, but it’s allowed in most states). And while you won’t get declined for coverage because of your score without the insurer telling you that’s the reason, they can charge you a higher rate without explanation. That means you can be paying more and not even know it.
- If you’re counting on a tax return this year, stolen identity can mess that up as well. Thieves can steal your Social Security Number (SSN) and then file a tax return on your behalf. The IRS will then think you’ve already claimed your refund and deny your request. Similarly, if someone used your SSN to get a job, those wages can get reported to the IRS by that employer. Then when you file your tax return and don’t claim those earnings (because YOU didn’t earn or even know about them!), the IRS will think you’re trying to get away with not paying taxes on your whole income. You’ll be in hot water and won’t even know why!
Securing your personal information is important to protect your identity. There are many things that can go wrong if your identity is compromised. Checking your credit report regularly can go a long way toward identifying problems as soon as possible. Early detection may make it easier to fix the problem, saving you time and hassle in the long run and, hopefully, protecting your credit score from too much damage.
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