Tuesday, March 10, 2009

Credit Repair and Identity Theft

The Problem of Unrecognized Accounts

Discovering the presence of accounts on your credit report that clearly do not belong to you can be unnerving. If you are the target of identity theft you will need to employ a very specific credit repair solution. But you must explore the nature of the issue before utilizing this powerful credit repair tool. Literally millions of people discover accounts on their credit report each year that do not belong to them. Only a very small percentage of these incidents are the result of identity theft. The vast majority of these events are the result of what are called file merger errors.

File Merger Errors

File merger errors occur when the credit bureaus confuse your credit file with the file of another person and accidently merge their accounts with yours. This can prove to be inconvenient but it is not the result of illegal of malicious activity. Oddly enough, these file merger errors are an accepted side effect of a decision made by the credit bureaus in setting the accuracy requirements for sorting credit data. They have built in a certain margin of error to allow for mistakes in data entry by lenders. This allows lenders to access a consumer’s credit file in cases where some amount of identifying data is missing or in the case where there is a small typographical error.

File Merger Credit Repair Solution

Fortunately, it is easy to determine if you are a victim of a file merger error and almost as easy to resolve it with credit repair without invoking the identity theft laws. Just call the creditor and tell them that you see an account on your report and you need to know if they are really reporting it as yours. If they tell you that they have no record of an account belonging to you it is not the result of identity theft. If this is the case, you will need to submit a simple credit bureau dispute letter listing the erroneous accounts and informing them of a file merger error. On the other hand, if they tell you that it is yours and you know for a fact that you did not apply for the account it’s time for credit repair action.

Identity Theft Credit Repair Solution

The credit repair solution for identity theft is codified in the Fair Credit Reporting Act, Section 605B, and is very clear and simple; follow the instructions, and the identified information will be blocked from your credit report within four business days. All you need to do is circle the suspect item on your credit report, and bring it to your local police station. Tell the police that you are a victim of identity theft and you need an identity theft report to send to the credit bureaus. Theoretically you only need to send this report to one of the credit bureaus as, by law, upon receipt of an identity theft report each bureau is required to notify the other two, but I suggest sending to all three. You must also include identification. I suggest that you include clear copies of your driver’s license and your Social Security Card. You must also provide a written statement that the accounts in question are not yours and do not relate to any transaction entered into by you. I suggest that you have this statement notarized. Bundle all of this together and mail it to the three credit bureaus via certified mail, or if you wish, via FedEx or other overnight service. Once the credit bureaus receive your package they will block the suspect information within four business days.

A Cautionary Note

It is worth understanding what will happen after you initiate this credit repair process. Upon blocking the information from your credit report the credit bureaus will contact the creditors and an investigation will ensue. Identity theft is considered a serious crime and there is a strong possibility that when the culprit is caught they will be prosecuted. There are two major considerations; first, if you think that a family member might be involved, think carefully before using this Section 605B remedy, second don’t ever think of using this process as an expeditious means of credit repair. If you initiate this process and it is later discovered that you have committed fraud, you will face jail time.

You Are Not Alone

Credit repair assistance is available if you need it. Identity theft can be a very disturbing event and needs to be handled properly. If you do not feel up to the task you should contact a credit repair professional. A credit repair expert will help you through the process and insure that everything is done in an efficient and effective manner. Good luck!

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