Credit reports contain hundreds of bits of information that factor into your credit scores. The obvious are balances on credit cards, payment history, mixture of credit, hard inquiries, and how old your credit accounts are.
But there’s a key element that you may not be aware of, it’s the dates reported.
Here’s an example, a collection account is reported to your credit report and that date is listed as “date open”. There’s also another date recorded and that’s the “date last reported” or what I like to call “re-aged”. This will be the last time that this collection company has sent account information to the credit bureuas. This “activity” is noted and your credit scores are kept low as a result. The credit scoring models note this as a recently reported derogatory.
There are also instances where a collection is “dormant” where as it’s not been re-aged in some time. Should you pay a dormant collection, it will lower your credit scores. If the account has recently been re-aged it will now lower your scores.
Most online credit reports show a 24 month payment history below the account. If you see within that 24 month payment history a “KD”, then that will let you know the last time the account was re-aged. This is a “key derogatory”.
For more information on which collections to pay, and which to leave alone along with other deletion strategies call me direct at 949-505-9971 or email me at firstname.lastname@example.org .
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Finding an unrecognized tradeline on your credit report or receiving a bill in the mail for an account you don’t remember opening is enough to make anyone’s heart pound. But it’s not a problem that lacks a solution, and there may even be a plausible explanation.
There are a number of reasons why you might not recognize a new account, from it being issued by a partner of the company you applied to for credit, to the possibility of identity theft and fraud. In any case, following the steps laid out below will help you identify the origins of the mystery tradeline, get it removed from your credit report if indeed fraudulent, and ensure that your finances are as protected as possible moving forward.
Immediate Steps To Take
- Contact The Creditor In Question: The first step in investigating an unrecognized account should always be to call the creditor that issued it and ask to speak with a fraud specialist. This may either jog your memory about applying for the account or help you determine that it’s fraudulent and get clues about how it was opened.“[Consumers] need to immediately react and respond via phone and email to any unauthorized lines of credit, and make sure they are forgiven any potential debt quickly and efficiently,” said Robert Siciliano, an identity theft expert who has written numerous books on the topic. “Otherwise, like a tumor it metastasizes; it becomes larger and more problematic.”
Make sure to take detailed notes when you call, including the name, ID number (if any) and direct phone number of the representative that you talk to. Also be sure to ask about the possibility of putting a freeze on the account in question so that additional charges cannot be made while the creditor looks into the possibility of fraud.
- Review All Three Of Your 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 suspicious account is listed on your other reports may provide additional context as to whether it’s fraudulent or legitimate. Identifying the inquiry that led to this account being opened may also provide useful information, as it will enable you to think back to what you were doing in the days leading up to it being posted to your report and thereby either remember applying or solidify your alibi.
You can order your Experian and Equifax credit reports for free through the government-sponsored website AnnualCreditReport.com.
- 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 account. 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 account is not helpful when you first contact them for information, draft a letter formally requesting that the account be closed, or at least frozen pending investigation, and that all related notations be removed from your credit reports. Also ask for written proof of the authorization given to open the account, and make sure to include a copy of your FTC affidavit and police report (i.e. your Identity Theft Report).You can customize this sample letter from the FTC with your specific case details, print it and then send it to the creditor, along with your other supporting documents, via certified mail with “return receipt requested.”
The creditor must provide a written summary of its investigation as well as any resulting actions taken (e.g., the closure of the account) within 30 days of receiving your letter. One thing that you’ll want to make sure to get is a written statement acknowledging that you are not liable for any debts incurred in relation to the account.
- Confirm The Account’s Removal From Your Credit Reports: In cases of potential identity theft, you shouldn’t take anything for granted. So even if the creditor responsible for the fraudulent account and the credit bureaus say it will be removed, follow up just to make sure.
Taking these steps will hopefully result in the closure of the fraudulent account without you being held accountable for any resulting debts or negative credit report notations. But if either the creditor or any of the credit bureaus aren’t compliant and you still maintain that you have no association with the account in question, you may want to file a complaint with the Consumer Financial Protection Bureau as well as consider hiring an attorney.
Either way, the opening of an unauthorized account should raise suspicions about the security of your personal and financial information, so you may want to consider taking additional measures to ensure this case of suspected identity theft does not spread.