Have you heard of a FICO score? This is the score
that the major credit bureaus give you based upon numerous criteria
that allows lenders to see how well you do at repaying your debts.
However, what can identity theft do to your credit score? It can ruin
you in a very short period of time.
To prove the case in point,
as much as 35% of your FICO score is determined based upon your payment
history. This means that if your identity is stolen and someone is
racking up credit in your name without paying the bill each time a
payment is missed your credit score is taking a hit. This can reduce
your score dramatically over just a few short months with missed or
late payments. In the case of identity theft you are typically dealing
with missed payments which hurts even more than a late payment does.
Another
major hit you can take is 10% of your FICO score is dependant upon new
credit that is opened. If you are the victim of identity theft you have
likely had at least one if not several new accounts opened, these
accounts can really hurt your score because they are all new forms of
credit that have been opened. By themselves, this typically does not
hurt your FICO score that much, but when added up with the 35% chuck
for payment history you can see how this can really hurt you quite
quickly.
Your next problem is in the amounts owed. If you are the
victim of identity theft then you likely have had a new account opened,
which is most likely also maxed out. This means that you owe a huge
amount of money suddenly that you are unaware of. This can really
reduce your credit score very quickly because the amount owed on your
credit file is as much as 30% of your FICO score. Add to this the 35%
for payment history and 10% for new credit and you are looking at a
whopping 75% of your credit score that is at jeopardy based upon
identity theft alone.
The next major blow is to your length of
credit history. As new accounts are opened, the average life of your
credit file changes to accommodate these new accounts. This can change
your score by as much as 15%, which means added up with the other 75%
already at risk you are looking at a 90% impact to your credit score
for the worse. Imagine how quickly identity theft can leave your credit
report and score in shambles and suddenly protecting yourself from
identity theft is very important.
Chris
Wight has been working for years to maintain his excellent credit
score. You can learn more about your credit rating and how to protect
it at his site: http://www.myficosource.com
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