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You’ve probably heard that you should check your credit right before applying for a loan since a good credit score entitles you to the best terms and conditions on financing. But there are other times when an immediate credit check is equally or, perhaps even more, in order.

Certain red flags indicate that consumers may want to conduct a careful review of their credit reports, since mysterious line items, such as unfamiliar addresses or credit inquiries, are a way to verify your identity has been compromised. For instance, it’s a good idea to check your credit if you start getting calls or letters from a debt collector about an account you’ve never heard of.

“That one collection notice you may have received might be the tip of the iceberg” regarding possible identity theft, Bruce McClary, vice president of public relations and external affairs at the National Foundation for Credit Counseling, said. Since spotting identity theft early can be help keep it from spiraling out of control, here are some other signs you should check your credit for fraud.

  1. An unexpected loan or service contract denial. Creditors and certain service providers are required to send you the credit score they used (along with an explanation) when they deny you or offer lesser terms on financing. However, you may not want to wait for this correspondence to arrive in the mail if you had reason to believe your credit was in good shape at the time of your application, McClary said. Recent fraudulent activity could have caused a drop in your score and ultimately led to the denial.
  2. Your credit card gets rejected. A thief may have gotten hold of your account and run up charges that went over your credit limit. You should be similarly wary if your issuer notifies you that your credit card interest rate has been unexpectedly increased, McClary said, since this too could be a result of someone else’s bad behavior. Checking your credit is a good way to determine whether other accounts have been affected or if deeper identity theft is afoot.
  3. A sudden influx of subprime credit card offers. You should be similarly wary of debt consolidation solicitations, particularly if your payment history and debt levels have been under control. These mailers could be a sign that new accounts have been taken out (and handled poorly) in your name.

Dealing With Possible Identity Theft

In any of these aforementioned scenarios, it’s a good idea to check your full credit report in lieu of just conducting a cursory glance at your credit score.

Moreover, “it’s also important … to get your credit information from all three bureaus (Equifax, Experian and TransUnion), not just one, as some information will be more up-to-date at one bureau than at the other two,” Barry Paperno, a credit card expert who blogs at Speaking of Credit, said in an email. “Also, one bureau may have data that doesn’t appear at the other two, particularly collections and inquiries, since many collection agencies only report to one or two bureaus, and credit card companies tend to check only one bureau when evaluating a credit card account request.”

When reviewing your credit, pay particular attention to credit inquiries, Paperno wrote,  “as they are the only items on your credit report that appear the moment they occur. New account openings, balance changes, late payments, etc., can take 30 to 60 days to appear.”

Of course, it’s in your best interest to monitor your credit year-round, even if you haven’t been given cause for alarm. You can pull your free annual credit reports at AnnualCreditReport.com and see your credit scores for free each month on Credit.com. (A sudden, unexplained drop in score from month-to-month is another sign you want may to conduct a full credit review.)

If identity theft does occur, you should dispute all fraudulent accounts with your creditors and the credit bureaus, notify the local authorities and file a complaint with the Federal Trade Commission. You also may want to consider a credit freeze, which could prevent any new lines of credit from being taken out in your name.

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