Dear Opening Credits, I'm 18 and looking for my first credit card. I've never had credit before. Everyone says you should start by pulling your credit report at AnnualCreditReport.com, so I did. I discovered my credit sucks already, before I even had it. Someone -- and that someone lists my uncle's address -- has run up big-time credit card debts in my name and not paid them off. Now it looks like I owe $25,000. Little help here. -- Messy Credit
Dear Messy Credit,
Yikes! It's awful to have to start your credit life by cleaning up a mess. The good news is that you can clean it up.
You did the right thing by checking your credit report to start. Too many people don't check, only to find out later that their credit identities have been stolen. Or they only learn of problems when they apply for credit and they're denied.
First, you say the debts list your uncle's address. That pretty much demonstrates that it's likely someone who lives in your uncle's home, maybe your uncle or a cousin or other relative, took advantage of your youth and your once-clean credit. That person may have taken your name, Social Security number and other identifying information -- maybe years ago, before you even knew what a credit card was -- and used it as his or her own.
It's fraud, plain and simple. If this was a stranger, you'd be quick to call the authorities and report the action as identity theft. The fact that a relative appears to be the perpetrator shouldn't change your course of action, though you can bet it will cause a family rift. Still, you're the victim, and this is not your fault. Don't allow family ties to change your path. A crime was committed against you, and you have to protect yourself.
If you don't clear it all up, you'll never be able to get the kind of credit you'll need in life. Your first credit card is just the beginning. Over time, you'll probably want car loans, a mortgage and more. Your credit can even impact your ability to get a job, as one Opening Credits reader learned the hard way after his father reportedly stole his identity.
I can't tell you how to deal with the family backlash that's probably going to come, but don't forget that you're the victim. You did nothing wrong. Your uncle or the person who stole your credit is a crook, and he or she deserves whatever legal action may come from this episode.
Here's what you do:
1. Contact your local police and report the identity theft. Get copies of the police report.
2. Call the fraud departments of each of the three credit bureaus and report the actions there, and send each bureau a copy of the police report. CreditCards.com has a long list of identity theft reporting sample letters and other information that can help you. Once you've notified the bureaus, each will start a fraud investigation on your behalf, and the agencies have 30 days to investigate such claims. Then, they have to remove the wrong information from your reports.
4. Contact each of the lenders who extended credit to your stolen identity and let them know what's going on. They may open their own investigations.
You might find it tough to get a credit card while you wait for this investigation to be completed. You can try, though, and the credit bureaus will note in your report that you're claiming fraud. Even with that notation, however, the lenders you approach for new credit may not feel comfortable lending to you before the investigation is over. Once you do get your credit report cleaned up, though, you'll be on your way to getting your first credit card.
Going forward, remember the lesson you learned here. Check your credit report once a year to make sure there's no questionable activity. I'm sure you won't want to go through this ever again.
Karin's money makeover column "Get With The Plan" can be seen every Sunday in "The Star-Ledger" and "The Trenton Times." She also hosts and writes "Money 911," a multimedia series for MSN Money. Before writing became her main focus, Mueller was the executive producer of CNBC's The Money Club, where she led the team that won the network's first ever Cable ACE Award for Business and Consumer Programming. Mueller lives in New Jersey with her husband, three kids, one guinea pig and one leopard gecko. Whatever they don't eat goes into her retirement savings accounts. A comprehensive archive of her writings is available on her Web site, www.KarinPriceMueller.com.
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