4 Ways To Correct Your Credit Score If You Are Scammed


Throughout the past year, Britons have seen an increase in scams attempting to steal their personal data, often putting their finances at risk.

Opportunistic fraudsters have taken advantage of the coronavirus pandemic and the rise in online payments to deceive unsuspecting victims with their hard-earned money.

Fraudsters will often make contact via email, phone calls, and text messages using sophisticated methods to exploit people.

Royal Mail, UK banks and even the NHS are among the companies used by fraudsters to trick people into giving out their personal information.

Unfortunately, when it works, it can have a major impact on a person’s credit score.

With the increase in identity scams, personal finance experts, Ocean Finance, have put together four tips to help you fix your credit score if you’ve been scammed.

Four Steps To Correct Your Credit Score After Being Scammed

1. Report it to the appropriate credit reference agencies

Check your credit report for free using one of the major UK credit reference agencies – such as Experian, Equifax or TransUnion. If you see something you don’t recognize, report it to the agency you used. They will then raise the issue with the relevant lender. It may take 4-6 weeks for the data to change in your report, so don’t worry if that doesn’t change right away.

2. Not satisfied with the result? Climb it further

Be sure to speak directly to your lender or bank if you are the victim of fraud. Whether you are entitled to a refund for stolen funds depends on several factors (for example, whether you have authorized the payment). If you do not agree with the lender’s decision, you can file a complaint with the financial ombudsman. They will be able to examine it from an impartial point of view, taking into account your situation.

3. Consider adding a fraud alert to your credit report

If you do this, future lenders will be notified that they need to confirm your identity before offering credit on your behalf. This will make it harder for scammers to impersonate you. Setting up an alert will not affect your credit score, but you may need to pay for this service.

Equifax’s service is free for 30 days, followed by £ 7.95 per month. Or Experian provides similar protection with “Identity Plus” which lets you know if they detect anything suspicious. On top of that, they will send you a daily fraud report helping you recognize any fraudulent activity. Experian comes with a 30-day free trial, then costs £ 6.99 per month with Identity Plus.

4. Add a free correction notice password

You can also ask the credit reference agency to add a password to your credit report. They can write a note (called a correction notice) containing a password of your choice. Lenders will see this note whenever someone applies for credit on your behalf and ask for this to be confirmed before they lend money. This is free and adds an extra layer of security. But remember to use a unique password so that scammers cannot guess it correctly.

Answers to frequently asked questions about identity fraud

What is identity fraud?

Identity theft is the criminal act of stealing personal information from another person. It comes in many forms, but often financial data or passwords are stolen. This tends to lead to identity fraud, where stolen data is used to earn money. Fraudsters can take out credit and buy goods in your name, or use your existing bank details to get additional credit and accumulate debt, for example. This can affect your credit score and your ability to take out additional or future credit.

How do I know if someone is using my identity?

In a recent survey of 1,000 Britons, Ocean Finance found that one in eight (12%) does not know whether or not they have been the victim of fraud. To help you out, Ocean Finance has listed some of the telltale signs of a scam:

  • New searches and / or accounts on your credit report that you don’t recognize
  • Unusual activity on your bank and / or credit card statements
  • Receive a credit card you did not apply for
  • Get approved or rejected for credit requests you haven’t made
  • Have a rejected genuine credit application when you have a good credit score
  • Receive letters or phone calls chasing you over money on accounts you haven’t opened

Ideally, you should get into the habit of checking your statements and credit reports once a month and immediately reporting any suspicious items.

Is Identity Fraud Affecting Your Credit Score?

Yes, if scammers get or use credit on your behalf and don’t pay it off, it will show up on your credit report for lenders to see. This can affect your credit score and therefore your ability to obtain additional financing. A single missed payment can reduce your credit score by approximately 130 points. Three to six missed payments can lead to payment defaults, which can have an additional impact on your score.

Multiple credit applications on your behalf in a short period of time can adversely affect your credit score. Whether accepted or rejected, it can give lenders the impression that you are in financial difficulty. Plus, if scammers are maximizing your credit cards and overdrafts, it will increase your credit usage rate, making you look irresponsible. Lenders may think it is too risky to lend you money.

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