Bad credit and identity theft are connectedIdentity theft is a rampant problem in today’s world that has the potential to affect everyone. Even though anyone can fall victim to identity theft, those with bad credit (or no credit at all) might mistakenly believe that their identities are worthless to thieves and, thus, be less inclined to guard against such threats. In this post, we’re debunking this misconception and talking about what individuals in these situations can do to defend against identity theft.

Why anyone can be an identity theft victim

We’ve talked many times about identity theft and how your information is either used by thieves immediately or sold in the underbelly of the Internet. Because every identity thief has a different objective, there are a number of different types of identity theft. Not only that, but certain types of identity theft can be conducted in multiple ways. This means that some instances might just be crimes of opportunity – an identity thief finds a random social security number laying around. In other cases, someone who knows you well and, as a result, knows your credit health, might purposefully plan out their identity theft attempt. Essentially, there are many ways and reasons for identity theft to occur, and they don’t necessarily depend on the shape of your credit scores and credit reports.

Common myths about bad credit and identity theft

Despite all that we know about what motivates identity theft, the myth that individuals with bad credit are immune still persists. Below we detail some of the misconceptions and explain why they aren’t true:

1. Identity thieves find value in your credit score alone. As we mentioned above, given the different types of identity theft that exist, it’s extremely likely that your identity won’t be targeted solely because of your credit scores. Your social security number or your phone number, for example, is useful in creating a brand new identity for someone, or to commit fraud in your name. Credit-related fraud is only one way identity theft can play out.

2. Identity thieves can’t get credit with my credit score. Even if identity thieves choose to commit credit identity theft against you, they can still get credit in your name and trash your score. That’s because some lenders might not catch identity discrepancies and there do exist lenders who lend to those with average or sometimes even low credit. If a thief is trying to access credit with your identity, they’ll likely rack up a bill in your name and leave you to clean up the mess.

3. Assuming your credit can’t get any worse. Putting off looking at your credit reports out of shame and disappointment won’t help you much. As the scenarios mentioned above should highlight, even if you have bad credit, if you’re the victim of identity theft, things can get much worse. As such, it makes sense to take steps to protect your identity and credit.

How can you improve your credit while protecting it?

We’ve talked before about improving credit, but here are some points worth noting again:

  • Check your credit reports. This is advice that we always suggest because it’s your first line of defense against credit report errors as well as catching any discrepancies caused by identity theft. You get one free credit report every year from each of the three credit bureaus through AnnualCreditReport.com. Additionally, there are other circumstances where you might be entitled to see your credit reports, so make sure you take advantage of them. If you’ve already checked your credit reports in the last 12 months, you may want to consider signing up for a credit monitoring service, as most of which provide you will all three of your credit reports and scores immediately after signup. A number of our top-rated services also have free trials, which means you can test them out without making a financial commitment. Visit our credit monitoring reviews to learn more.
  • Consider enlisting the help of a credit repair service. Credit repair is a good way of dealing with credit report errors, identity theft and other types of mistakes that shouldn’t be on your credit report. The great thing is that many services don’t require you to subscribe, so you can pay for these services as needed. The downside is there are a lot of credit repair scams out there, so you’ll want to read our guide to avoiding credit repair scams before you commit to a service.
  • Set credit alerts or freezes. If you feel worried about your credit, you can place fraud alerts that notify you if there’s a new credit application in your name. This is a useful tool for proactively dealing with identity theft scares, but it does require you to trust that creditors will reach out to you when they see the alert. Fraud alerts usually last 90 days, but you can get an extension if you have an identity theft report. An extreme way to protect your credit is a credit freeze, which prevents anyone from accessing your credit. This, of course, means that lenders can’t open any new accounts in your name, but freezing is a powerful tool that will ensure the safety of your credit until you can guarantee that it’s not in danger — or you lift the freeze. You might opt to freeze your credit while you work on it, so that you don’t have to worry about both building credit and defending against identity theft. Something to note is that while fraud alerts are free to set, credit freezes often require a fee to implement them, depending on the state where you reside.

For more information about how to protect your credit and identity from preying eyes, keep reading our identity theft protection blog.