Thousands fall victim to identity theft and identity fraud each year. However, few know the difference between the two. While they may seem similar, identity theft and identity fraud are two different crimes that have different effects on your finances and credit depending on their severity. Understanding these differences may help you better protect yourself and prepare you to fight back.
Identity theft is the criminal act of stealing personal, private, or financial information with the intent of using it to assume another person’s identity. Most often, the stolen identity is used to make fraudulent purchases or to open credit card and bank accounts. Additionally, a fake identity can impact healthcare claims, taxes, and even criminal records. While many pieces of information can be stolen and used by identity thieves, there are a few important things that you should always keep safe and be careful of sharing:
If identity theft is the act of stealing personal, private, or financial information, then identity fraud is the use of this stolen information. This crime affects both the individuals whose identity has been stolen and the businesses where the stolen identity has been used to make fraudulent transactions. Additionally, the fake identity used doesn’t necessarily have to be that of someone living, or even real. Thieves often assume the identity of the deceased or create fake identities of people who never existed to commit a crime. Some examples of identity fraud include:
Once it has occurred, identity fraud can have a lasting impact on your credit score. The accounts and charges that thieves fraudulently create may still appear on your credit report and be your responsibility until disputed. Checking your credit report regularly is a good way to protect yourself from identity fraud. Search for any accounts or debts that you do not recognize and contact the business or credit bureau immediately to inform them that your identity may have been compromised. The more vigilant you are, the more likely you will be able to protect yourself from identity fraud.
Understanding the difference between identity theft and fraud is crucial in protecting against and resolving the crime. Your credit score is important and needs to be protected. Although it may take work, keep your private information safe. Doing so may help prevent you from becoming a future victim of identity theft or fraud.