Your credit report and score are what providers use to assess your creditworthiness. If you’ve been a victim of identity fraud, these are some examples of how it could impact you:
1. A new hard inquiry
If a fraudster makes a credit application in your name, the provider will check your report before making a decision on whether to accept the application. This is called a ‘hard inquiry’ and will be visible to you as well as other lenders and providers. Regardless of their decision, the inquiry will remain on your report for 12 months and could cause a dip in your credit score.
1. A new hard inquiry
If a fraudster makes a credit application in your name, the provider will check your report before making a decision on whether to accept the application. This is called a ‘hard inquiry’ and will be visible to you as well as other lenders and providers. Regardless of their decision, the inquiry will remain on your report for 12 months and could cause a dip in your credit score.
2. Increased credit utilisation
Credit utilisation is how much of your available credit you use each month. It’s a factor lenders/providers take into consideration when assessing your creditworthiness as they like to see how you manage your debt. We usually recommend you use no more than 30% of your available credit at any one time. If a fraudster increases the credit utilisation on your accounts or maxes out your cards, this could cause your score to drop.
3. Late payments
Your payment history is what some providers use to determine whether you’re able to pay your debt on time. When a fraudster opens a new account, it’s highly unlikely that they’ll make the repayments each month. If you (or, the fraudster) miss a payment on a credit account, the account will show 6 years of payment history, even once it’s paid off. Each missed payment can cause a dent in your credit score which will affect your credit worthiness.
4. Default
A default appears on your credit report when a provider closes your account because you’ve missed payments. The number of missed payments a provider will deem worthy of defaulting your account varies - for some, it's only missing 1 payment, for others, you could miss 6 or so before they close your account.
You can find out more about how long information stays in your credit report and how to raise a dispute if there's incorrect information in your report.