Unfortunate events seem to come when we least expect them. While we can’t control the timing, we can be prepared for when they do come. Just like we inventory our possessions in our homes in case of fire or theft, and have our auto insurance card handy in case of an accident, we can create a credit emergency kit in case of injury to our credit. Should your credit or identity be compromised, you’ll want to have a plan of action in place, as time is of the essence.
What’s in your wallet? Do you know for sure? You may have credit cards in there that you haven’t used in years; maybe even forgot you had. If your wallet is stolen, you’ll need to know what was in it. If you don’t know that a particular card is even in your wallet, you may never miss it if someone slips it out of there unnoticed.
That’s why the first step in creating this first aid kit for your credit is to inventory what you have. Get a copy of your credit reports from all three of the major credit bureaus to start, and locate all the open accounts that are listed there — just to make sure there are no errors on your report, or no fraudulent accounts. While you’re at it, you may want to take some of those non-critical cards out of your wallet and lock them in your safe.
Once you’ve located them all, begin an inventory list for each card that includes the card number, the number to call for lost or stolen cards, the date you normally receive your bill (so you’ll notice if it doesn’t come in the event someone changed your address to redirect the card), and where the card is located (in your wallet or in your lockbox, for instance).
It’s a good idea to photocopy each credit card (front and back), and also other important identification items like your driver’s license, Social Security card, Medicare card, birth certificate and passport. List those on your inventory sheet, too, with the identifying numbers and where each of those items is located. Please, never carry your Social Security card or birth certificate with you. And of course, keep that list in a safe and secure place.
Contact the Authorities & Credit Bureaus
Should any of your credit cards get lost or stolen, your first call, after notifying the police, is to the credit card companies, to alert them and replace the cards so no new charges can be made.
In addition, when your credit cards or other identity documents are compromised, it is critical to contact the credit bureaus to notify them of the problem. You have a couple of choices for how to handle your credit with the bureaus, ranging from placing a credit security freeze on your account to varying degrees of fraud alerts.
The Federal Trade Commission should also be notified of your identity theft or credit card fraud. You may also file an affidavit with the IRS to notify them either that your federal tax returns may be affected in the future. This will alert them to look for questionable activity. If a fraudulent return has already been filed, you will need to work with the IRS for resolution. In severe cases of identity theft, the Social Security Administration – although it is rare that they do — may issue you a new Social Security number.
Consider a Fraud Alert or Credit Freeze
A fraud alert is one way to protect your credit. By calling one of the three credit bureaus and requesting an initial fraud alert, for 90 days lenders will be required to verify your identity before issuing new credit (you can also renew for additional 90-day periods). The bureau you contact will then forward the alert to the other two. If you are the victim of identity theft, you may also request a seven-year extended fraud alert by sending a police report to one of the bureaus. These fraud alerts are free, and while they offer protection, they may not be foolproof.
Alternatively, a credit freeze locks down your credit to prevent new lenders from even seeing your file. You are given a PIN or password that is needed to remove the freeze or temporarily thaw your file when you need to apply for credit. This is a stronger protection than the fraud alert, however it can be cumbersome and you may incur a fee to freeze and/or thaw. You will need to contact each bureau individually and pay a fee to each if required. A credit freeze does not stop unsolicited credit card offers, though; but an extended fraud alert does stop them for five years. Something to consider if you are concerned about offers being stolen from your mailbox.
Monitor for Fraud
Even after taking those steps, you should check your credit report periodically to check for fraud. You can pull your credit reports for free once a year from each of the three major credit bureaus through AnnualCreditReport.com. Keep an eye out for accounts that you did not open, and addresses or other information that is not yours. You may also want to monitor your credit scores for changes that could indicate that something is wrong with your credit file. There are free credit score monitoring tools online, including the Credit Report Card from Credit.com, which allows you to see your credit scores every month, along with a breakdown of you credit profile to show you which areas of your credit need work.
Resources to Keep Handy
It’s important to keep the contact information for all the government agencies, credit bureaus and other financial companies you may need to contact in a credit emergency. Here’s a good place to start, but you should personalize it for your own needs.
Federal Trade Commission
Internal Revenue Service
- Form 14039 Identity Theft Affidavit
Social Security Administration