ADVERTISEMENT

ID theft means surprise loan denial

By

Credit Wise
Credit Wise columnist Kevin Weeks
With more than 20 years experience in the nonprofit credit counseling industry, Kevin Weeks joined the Financial Counseling Association of America (fcaa.org, @TrustFCAA) as its president Dec. 1, 2014. Weeks has extensive knowledge of both the credit counseling industry and the FCAA organization, having served in leadership positions for three of its member agencies and on the FCAA board of directors. In addition, Weeks is working with FCAA members to help develop a long-term solution to the student loan crisis through the website studentloancounselors.org. Weeks holds a bachelor of science degree in business administration, management information systems from Salem State University.

Ask a question.

'Credit Wise' archive

Question for the CreditCards.com expert

Dear Credit Wise,
So I wanted to take out a loan and I qualified but at the last minute they turned me down because of the amount of credit card payments I owe. But I  never opened any credit cards and now they are saying I have a mortgage. Sadly, I don't. I live in a room in someone's house and pay rent so how am I to deal  with all this? Is it right for me accept it and pay the cards I don't have? Who  should I tell about this? I am 23 and never  even had a bank account either. Now it looks like I'm in debt to five credit cards and a mortgage that I don't have, that I never opened and I don't know what to  do. How should I handle this? -- Sarralin

Answer for the CreditCards.com expert

Dear Sarralin,
It would appear that you are the victim of identity theft. Sadly, one of the side effects of identity theft is just what you experienced -- you were turned down for a loan. The company that turned you down should have sent you a notice regarding the reason you were disqualified. This notice includes the name of the credit reporting agency from which the information was obtained.

The first thing you should do is contact that credit reporting agency -- Equifax, Experian or TransUnion -- let them know you've been an identity theft victim and request a copy of your credit report. It is also important to contact the other two agencies as well because this erroneous information could be in one, two or all three of the be reporting agencies files. All three agencies are required to send you this report for free. Once you have received your report(s), check to be sure that none of the accounts listed do in fact belong to you. If you find that one or more account is accurate, you will need to come up with a repayment plan and contact the creditor(s) you owe.

However, if none of the accounts belong to you, a letter of dispute should be written and sent to the credit reporting agency or agencies that have the erroneous information. In your letter, you will need to state the facts clearly, explaining why each account does not belong to you (you never applied for or received a credit card, and you never applied for a mortgage). Make copies of your credit report and circle those items for clarification, enclose the copy with your letter and mail it certified, return-receipt requested. Be sure to keep copies for yourself.

Once your dispute has been filed, each credit bureau must investigate the items being disputed within 30 days of notification. Once their investigation is complete and if there are indeed mistakes on your credit report, that agency is required to remove those items and notify the other two reporting agencies of the errors.While it may seem overkill to address all three bureaus given each is required to report to the other, I would still recommend addressing them individually.

If none of these accounts do in fact belong to you, certainly do not begin paying on them. Paying anything could signal the companies that you agree that you owe them the money and will start the clock running again on credit reporting, as well as on creditor calls if you fail to continue to make payments.

See the Federal Trade Commission's report, "Repairing your credit after identity theft," for more details about fighting back from ID theft.

On another note, your true credit file may be thin; you might consider opening a low-limit secured credit card, which is secured with funds you deposit, in order to begin building positive credit in your name. As you use the card, be sure you make all your payments on time, every time because on-time payments account for a large part of your credit score. Once this is all cleared up, you should make a point to check your credit reports at least on an annual basis at www.annualcreditreport.com.  You are entitled to a free copy of your credit report every year from each of the credit reporting bureaus.

Be wise with your credit!

See related: Put your credit report on ice with a credit freeze

Meet CreditCards.com's reader Q&A experts

Does a personal finance problem have you worried? Monday through Saturday, CreditCards.com's Q&A experts answer questions from readers. Ask a question, or click on any expert to see their previous answers.

Published: January 31, 2015


Join the discussion
We encourage an active and insightful conversation among our users. Please help us keep our community civil and respectful. For your safety, do not disclose confidential or personal information such as bank account numbers or social security numbers. Anything you post may be disclosed, published, transmitted or reused.

If you are commenting using a Facebook account, your profile information may be displayed with your comment depending on your privacy settings. By leaving the 'Post to Facebook' box selected, your comment will be published to your Facebook profile in addition to the space below.

The editorial content on CreditCards.com is not sponsored by any bank or credit card issuer. The journalists in the editorial department are separate from the company's business operations. The comments posted below are not provided, reviewed or approved by any company mentioned in our editorial content. Additionally, any companies mentioned in the content do not assume responsibility to ensure that all posts and/or questions are answered.




Follow Us


Updated: 12-06-2016


Weekly newsletter
Get the latest news, advice, articles and tips delivered to your inbox. It's FREE.


ADVERTISEMENT