How Consumers with Credit Problems can Avoid Identity Theftby Steve Cypher on Saturday, January 19th, 2013
Credit challenged individuals in the process of repairing their car credit should check out this Experian study that demonstrates that as credit scores improve there is a greater chance of having their identity theft stolen
What we know
At Auto Credit Express our business for the past twenty years has been helping car buyers with bad credit find car dealers for their best chances at approved car loans. And while we’ve always suspected it, a report released by Experian shows the relationship between credit scores and the chance of credit fraud – something car buyers with credit issues need to realize.
Something else we’ve also wondered about: if a good credit score means more opportunities for credit thieves while a poor one doesn’t, how do fraudsters know the difference? As it turns out, they probably don’t.
Experian looks at identity fraud
This report from Experian analyzed the rate of identity fraud across various credit score ranges and establishes a clear correlation between high credit scores (for individuals and businesses) and “the propensity for identity fraud victimization.”
Working the percentages
Using a VantageScore (which isn’t the same as the score from Fair Isaac) of 769 as a reference point for the average credit score here in the U.S., the study finds that those consumers in the lowest 20% (501-556 VantageScore) of the credit scoring population have anywhere from a 1% to a 2% chance of identity fraud detection. Those consumers at the opposite end – the highest 20% – have between an 8% and 16% chance of identity fraud detection.
And while consumers with higher scores may be targeted more than consumers with lower scores the question is, how are identity thieves able to differentiate between the two? It turns out that they may not be able to.
According to Experian, “although there may be fraud attempted against those with lower credit scores, it is less likely that those attempts will come to fruition. In essence, those with lower credit scores may be relatively safe from identity fraud simply because their scores are likely to be a barrier to entry in opening a credit-based account such as a credit card or a loan.”
How to prevent identity theft
Experian also offered a number of suggestions to help prevent identity fraud:
• Consumers at all credit levels – but particularly those at the top – need to actively protect themselves from becoming victims of identity fraud.
• Consumers need to be aware that they are the first line of defense in preventing their information from being pirated in the first place.
• Consumers should not give out personal information over the phone unless they have initiated the call.
• Consumers should take precautions such as shredding financial documents and other documents containing sensitive information.
• Consumers should regularly check their credit reports at the three reporting companies. This could include enrolling in a credit monitoring program that will detect the crime quickly so that immediate action can be taken to mitigate the damage.
The Bottom Line
The fact is that even people with below average credit scores are at risk of having their identity stolen. It also follows that people in the process of repairing their credit (such as those with high risk car loans) should be checking their credit reports regularly.
Something else to consider: if your credit is less than perfect you should know that Auto Credit Express specializes in matching applicants with auto credit issues to dealers that can offer them their best chances at car loan approvals.
So if you’re ready to begin that process, you can start now by filling out our online car loans application.