A credit score is one vital thing that any financially conscious person needs to maintain to lead a life full of opportunities. Also called Fico Scores, credit scores are rated from 350 to 850. Anyone with a 700 credit score has all the advantages a credit score can give. While any score below 660 can make it challenging to get an approval for even the smallest credit card application.

Fifty percent of the American populace has a credit score rating above 700. Those in the 600 to 700 bracket are about 27 percent, while those below 600 are about 15 percent. Understanding the different factors that affect credit scores can help you know how to increase your credit score. Hence, you can join the 58% of Americans with respectable scores.

What’s The Composition of Your Credit Score?

35 Percent is Payment History

These are entries of all the bill payments you’ve ever made. That’s true; every bill that reports to the major credit bureaus will also reflect on your credit report. Ensure every bill is paid early enough and avoid being over 30 days late since creditors will report that on your credit.

If you are constrained financially and feel that you’re not going to pay on time, always let the creditor know in advance. Certain installment loans are flexible enough to give debtors a 30-day grace period for late repayments without the debtor experiencing adverse consequences.

Do note that late payments from the past seem to have a less severe effect on your credit score than the most recent ones. Therefore, don’t be caught by surprise when you see a 60 point score drop on a recent late payment even with excellent credit history. 30 Percent – Credit Card Capacity

The trick with credit scores is not the amount of money owed but the ratio of available revolving credit. Generally, you’ll have a lower score when your usage is higher. For example, say your total credit card limit is $500 and you utilize $400. This is an 80% utilization and will lower your credit score more than lower utilization. On the contrary, when your available limit is $100,000 and your usage is $50,000, your credit score will be higher.

As such, it’s highly recommended not to carry balances on many credit cards. Additionally, balances should always be at most 10% of the credit limit for all revolving accounts. Being mindful of these credit hacks will help optimize your credit score as high as possible.

15 Percent – Length of Credit History

With an older credit history, your credit score will tend to be stronger. A credit consumer who has maintained their credit profile for over 20 years will most likely have a higher credit score than one with a 10-year-old credit profile, provided all other factors are the same.

10 Percent – Credit Types

Types of credit refers to the different credit accounts existing on a credit profile. You should have at least one each of the following accounts: Installment account, mortgage account, and credit card/revolving account.

Out of the three account types, missing an open and active credit card account will create the most adverse effect on your credit score. Therefore, if you currently don’t have a credit card account, acquiring one can earn you a 30 points boost on your Fico Score.

10 Percent – New Credit

Credit scores are also determined by considering the average time an account has been open on a credit report. Be cautious not to open many new credit accounts as it will negatively affect this factor. Also, you shouldn’t close down your old credit accounts as that will lower your score as well. You’ll come to realize that as your account grows older, your credit score will also improve. Needless To Say, opening too many new accounts will negate this long-term benefit.

Another factor considered under this category is hard pull requests from lenders on your credit report. Always ensure that your credit report has as few inquiries as possible.

How can you fix records of identity theft from your credit report?

After dealing with a lot of identity theft issues, I have come up with several steps to fix any fraudulent activity. This includes fraudulent items on credit reports which are a result of identity theft.

Please note the methods used in removing questionable items on your credit reports such as late payments, collections, charge-off accounts, and inquiries are different if identity theft is not the cause.

The Fair Credit Reporting Act (FCRA) has all the necessary provisions for cases of identity theft. The following steps can help effectively solve this matter. However, there might be incidents when the creditors or credit bureaus may deny your claim. Especially if you fail to do any of the following steps properly.

Step One: File an identity theft affidavit to the Federal Trade Commission

You can file for an identity theft affidavit and send it to the Federal Trade Commission (FTC) online. This is imperative if you believe someone stole your personal information and used it for any credit-related activities.

Make sure you include all the necessary information such as the account number on your credit report, opening dates, and the amount involved. If you miss filling in the details properly, it can result in rejection by the creditors and the credit bureaus.

Step Two: File a police report

The next thing to do is to file for a police report. You can do this online on your police department’s website or visit the station personally. If you choose to walk in, don’t forget to bring with you a copy of your credit report and ID.

Also, make sure you include on your police report the account number on your credit report. The date when the fraudulent activity happened and the outstanding amount should also be listed.

Make sure to file this properly. There are incidents when credit bureaus and creditors reject an identity theft claim if there is no police report included.

Step Three: Prepare an identity theft dispute letter

After having all the requirements you need, it’s time to prepare an identity theft dispute letter. Here are some important reminders.

A) How to dispute identity theft, fraudulent acts, and other related items on your credit report?

You can dispute an account for identity theft and other related items by simply stating that the account was fraudulently opened by an identity thief. If the account incurred any fraudulent charges, you can also dispute it.

B) Why is it important to have a fraud alert on your credit report and how can you do it?

Setting up a Fraud Alert will help you get notified if something suspicious accesses your account. You also get alerted when someone else uses your information to apply for credit. To do this, you can simply list your mobile number on your letter and request the credit bureau add one. It is fairly easy to request your credit report have a fraud alert.

C) Where can you send your identity theft dispute letters to?

You need to email the letter together with other important documents of your claim to the credit bureaus. Here are their corresponding mailing address:

Equifax
Consumer Fraud Division
P.O. Box 740256
Atlanta, GA 30374


Experian
National Fraud Victims Assistance
P.O. Box 9554
Allen, TX 75013


TransUnion
Fraud Victims Assistance
P.O. Box 2000
Chester, PA 19016


D) What are the things you need to include in your identity theft dispute letter?

Don’t forget to include these documents so the credit bureau can process your claim properly and won’t reject it.
Identification card
Social Security card
Copy of utility bill
Copy of identity theft report sent to FTC
Copy of identity theft police report

Step Four: Directly dispute the identity theft accounts

Here are the things you should do to dispute fraudulent accounts: Contact your creditor

Once you notice fraudulent activity on your account, you may call your creditor’s fraud department right away. Ask them where to send your documents about your claim. Don’t forget to leave your contact number, email address, and mailing address so they can notify you.

Send the following documents to your creditor

Please also supply your letter with all the following documents to further prove your claim:

•Cover letter stating the fraudulent incident you experienced on your account
•ID card
•Social security card
•Utility bill
•Copy of identity theft report to the FTC
•Copy of filed identity theft police report

Wait for the update
After submitting all the requirements, you need to wait for around 30 days to give time for the investigation and decision regarding your claim.

Step Five: File a regulatory complaint

After a month of waiting for the result, you can file a regulatory complaint against the party or parties involved. But you can only do it if you have processed the identity theft reports and included all the necessary documents on your complaint.

You may inquire to the Consumer Financial Protection Bureau to file a complaint against the creditor and/or the three credit bureaus. After filing the complaint, it will be forwarded to you and you need to provide a response addressing the problem.

Step Six: Prevent and protect yourself from identity theft

As you can see, reporting an incident of identity theft on your account involves a lot of work. To prevent this from happening again, you need to take precautionary measures to protect yourself from fraudulent attacks. If you are planning to apply for new credit, always take protective measures. You can apply for a credit lock or credit freeze to the credit bureaus to protect your credit report from any future attacks. In this way, no one can access your account, even the creditor.

Credit bureaus’ credit lock procedure:

Experian: They have a free credit monitoring service where you can lock and unlock instantly your Experian credit report.

TransUnion: They offer a paid monthly monitoring service for your credit report. It allows you to lock and unlock instantly your Equifax and TransUnion credit reports.

Step Seven: Review other identity theft resource centers

You can review other identity theft resource centers whenever you encounter any of the related problems, such as:

Organizing your recovery process: Request for FTC Identity Theft Recovery Plan Booklet

Driver’s License Fraud: Inform your state’s DMV asap to prevent any bigger problems.

IRS and Tax Fraud: Please contact the Internal Revenue Service Fraud Department on their hotline 800-829-0433. You may also go to your state’s income tax board.

Passport fraud and identity theft: If your passport’s personal information was used in identity theft, contact the Passport Services Department asap.

Stolen mail: If someone else stole your mail, call the USPS Inspector General to track the mail for you.

SSN Fraudulent Activity for Employment Use: If you see someone else employed on your SSN, file a complaint with the Social Security Administration’s Office of Inspector General to assist you in investigating the matter.

Step Eight: Consider applying for a new social security number

When all the above steps don’t help you correct your issues with identity theft. The Social Security Administration may issue a new social security number to you. Thus, you need to inform the three credit bureaus that you created a new credit file. They will transfer all your previous information to it.

To do this, you may contact the Social Security Administration Fraud Hotline at 1-800-269-0271.

Start to repair your credit report affected by identity theft.

Identity theft is a serious problem. You need to take action as soon as you notice it on your accounts. The earlier you process it, the more favorable the outcome.

In case you need more help in fixing your credit because of identity theft, let 007 Credit Agent know. We will assist you in investigating this matter, so you can avoid this problem in the future.