How To Handle An Unauthorized Credit Inquiry
There are many reasons why you might not recognize an inquiry on your credit report. This doesn’t necessarily mean that your identity has been compromised, but it’s nevertheless important to make sure. An unauthorized inquiry could be the first sign of a fraudster seeking to take out credit in your name, and getting to the bottom of things as quickly as possible will save you a lot of time, hassle and potential credit score damage in the future.
Immediate Steps To Take
Contact The Creditor In Question: The first step in investigating an unrecognized credit inquiry should always be to call the creditor that has been poking around your reports. Speaking with them may help you realize that you actually did authorize the inquiry or get clues about how this fraud is being perpetrated.
Make sure to take detailed notes during this call, including the name, ID number (if any) and direct phone number of the customer service representative or fraud specialist that you talk to.
Review Your Three Major Credit Reports: You already have your TransUnion credit report from WalletHub, and while Experian and Equifax credit reports contain largely the same information, there are some differences in terms of their data sources and the financial institutions that use them. Seeing how, and if, this unauthorized inquiry is listed on your other reports may provide additional context about whether it’s fraudulent. This will also give you the opportunity to thoroughly review each of your files for other suspicious listings.
You can order your Experian and Equifax credit reports for free through the government-sponsored website AnnualCreditReport.com.
Dispute Inquiries You Don’t Recognize With The Respective Credit Bureau(s): If you find suspicious inquiries on any of your reports, follow the respective bureau’s steps for reporting and disputing the issue (see below). The credit bureau will then send that creditor a request for verification. "Generally within 30 days, the source must verify your account data," said Michael Bruemmer, vice president of consumer protection at Experian.
Place A Security Freeze (And Fraud Alert) On All Three Reports: A security freeze completely prevents most parties from viewing your credit report, though exceptions do exist, such as for the government, existing creditors, collection agencies, creditors who prescreen you for offers and yourself. You must contact TransUnion, Experian and Equifax individually to put a freeze on each report, and a fee may apply each time you freeze and unfreeze a report.
However, the cost — $2 to $15, depending on your state — pales in comparison to the value of gaining complete control of your credit reports and thereby preventing anyone from applying for or opening a credit account without your consent. That’s especially true when you consider that many states allow the elderly and victims of identity theft to freeze and unfreeze their credit reports for free.
"It is the best, cheapest, and most effective thing that someone can do," said Steven J. Weisman, a senior lecturer of law, taxation and financial planning at Bentley University and author of numerous books about identity theft.
Another thing you’ll want to do is ask TransUnion to put a fraud alert on your credit report. TransUnion will be legally required to notify the other two major bureaus, and you will receive a confirmation letter from each one after the alert has been added to your file. It will remain in place for at least 90 days, even if you lift the security freeze on a report, warning potential creditors that you might be a victim of identity theft.
How To Escalate Matters
File An Identity Theft Complaint With The FTC: You can file a formal identity theft complaint with the Federal Trade Commission through its online complaint form. Once you have submitted your complaint, the FTC will generate an Identity Theft Affidavit. It is very important that you save and print this document, as it can only be viewed once through the online system.
The FTC Identity Theft Affidavit is a critical supporting document for investigations into suspected identity theft.
File A Report With Your Local Police Department: Bring a copy of your FTC Identity Theft Affidavit to your local police department, along with a government-issued ID, proof of your address (e.g., a mortgage or utility bill) and any additional documentation you have concerning the unauthorized inquiry. This will enable you to file an official police report, which, together with your FTC affidavit, will comprise your "Identity Theft Report."
People often are hesitant to report a seemingly minor sign of identity theft to the police, but it’s important to remember that taking this step — which may be as simple as filling out and submitting a form at the station — is more of a procedural milestone than the beginning of an active investigation by law enforcement.
"That’s when people start taking you seriously," said credit expert John Ulzheimer, who has worked with both Equifax and FICO. "If you are willing to lie to a police officer and file a false police report, that’s a criminal act. So that seems to be one of the dividing lines between people who are truly a victim and people who are just pretending to be victims just to get stuff removed from their credit reports."
Send A Certified Letter To The Creditor: If the creditor responsible for the unauthorized inquiry is not helpful when you first contact them for information and your dispute with the credit bureau is not successful, draft a letter asking for written proof of the authorization the creditor received to make the inquiry, and send it via certified mail with a "return receipt requested." You can customize this sample letter from the FTC with your specific case details. Make sure to include a copy of your FTC affidavit and police report (i.e., your Identity Theft Report).
The creditor may not be legally compelled to investigate the issue, but a police report and FTC affidavit could be enough to get their attention. Besides, this letter and any resulting response from the creditor will be useful documentation to have if you decide to hire an attorney and pursue any sort of legal action. So make sure to copy and save all correspondence.
Taking these steps will hopefully resolve the issue, resulting in the removal of all fraudulent notations from your credit reports before any unauthorized accounts can be opened or any debts can be racked up in your name. If that does not prove to be the case, however, you may want to file a complaint with the Consumer Financial Protection Bureau against both the creditor and the credit bureau in question as well as consider hiring an attorney.
Either way, an unauthorized inquiry should raise suspicions about the security of your personal and financial information, so you may want to consider taking additional steps to ensure this case of suspected identity theft does not spread.
Image: DJTaylor / Shutterstock.com
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