According to your credit report, you own a 4-story house, an H3 Hummer, two jet skis, three laptops and several high-limit credit cards that are maxed out. I guess that wouldn't be a bad life if you actually owned those things. But instead, you're completely shocked because you don't remember purchasing any of those things. Yet your credit report is so far on the low end you can't borrow money from your kids. Welcome to the world of identity theft.
As you probably already know, credit is what makes our society go around. If you ever want to buy a car, purchase a house or even rent an apartment, your credit could be checked. Having a good score gives you more leeway to make purchases like a luxury car at lower financing percentage. But having a bad score? If you're lucky, you'll be able to get any car at 25 percent financing.
It's one thing to ruin your credit by not making payments on time on many things you own or filing for bankruptcy. Even if you made those mistakes early in life and want to repair your credit, you will face a steep hill. But when your identity is stolen and your credit looks bad, that hill becomes a mountain.
First, good luck finding out who stole your identity. Police and several identity theft resources are at your fingertips, but the longer it takes to find the person, the more purchases he can make under your name. For every day that your name is illegally being used, that's another day late on payments for items you didn't even buy.
Then you have to convince your creditors that the purchases made were not by you. Until you do, you can expect your credit history to remain pretty checkered. Creditors might be very understanding, or they might not. In either case, they want their money. Sometimes the only way to fend them off while you try to resolve the situation is to start making payments or settle those accounts.
You thought it was tough paying on what you truly owe; imagine paying on what isn't even yours.
Identity theft will also ruin your credit repair by halting any future accounts. You will have a tough time opening new credit, which is probably how you found out about your identity theft in the first place. Sometimes people try to repair their credit by opening smaller accounts and paying them on time. But what if you can't get a small account because your credit history looks so bad through no fault of your own?
This is why it is important to secure your identity as best as possible. In tough economic times, it wouldn't be surprising if more and more people tried to steal your identity to make ends meet. Watch where you shop online. Don't give your social security number over the phone. And definitely don't let someone else use your cards.
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