Beware of Credit Vandals

Published on Castanet January 7, 2019

 

 

Have you seen the movie Identity Thief?

The trailer is possibly one of my favourite movie scenes ever (Melissa McCarthy singing in the car). The movie is pretty cheesy, but the message sure hits close to home.

When I take a mortgage application I usually have a pretty good idea what the clients’ credit scores will be.

I started working with a couple (lets call them Bob and Lynda) in Langley mid November. When I pulled their credit reports I was shocked to see that her score was 623.

I had expected it would be in the high 700s.

For perspective, 680 (or higher) is the score that mortgage insurers and lenders are looking for. The lender I was wanting to work with for this couple would only consider scores 650 or higher.

This was a hard stop.

I called the clients. We went over her credit report item by item.

It turned out that there were multiple applications for credit starting in August. There was a new cellphone showing three months in arrears, and a new credit card that was showing two months in arrears and over limit.

There was also a flag on Lynda’s credit bureau that clearly stated her credit had been compromised in the past, and before any new credit was approved lenders needed to call her cell directly to confirm it was a legitimate application.

Lynda was far calmer about it than I expected. She told me the story of what happened when her identity was stolen the first time. It was a nightmare, but it did get sorted out.

At the time, she had searched the new address on the fraudulent credit and discovered numerous complaints by other victims about the same address. It seemed like home base for a very busy group of criminals.

Second time around, Lynda contacted the cell provider and the credit card company right away. Both issues were dealt with promptly and notes were made on her credit bureau.

I pulled her credit bureau again early this week and her score had jumped to 792. Although frustrating, at least she was able to sort this out quickly.

This experience was unsettling for me. I’ve known Bob and Lynda for many years, and they have always been careful with their finances and personal information.

The start of a new year is a great time to do a thorough review of your financial situation. Take some time to look over your budget and plans.

Book time with a financial adviser to either review your investments or talk about how you can start a savings plan.

Review your mortgage and think about ways to pay it off sooner.

I also suggest you take a few minutes to pull your credit report and go over it to make sure everything is OK.

Based on Lynda’s experience, if your credit has been compromised in the past, I suggest you check your credit every three or four months, or right away if you receive calls from lenders that someone has made an application in your name.

Taking the time to review your credit history may save you time and aggravation down the road when you apply for credit.

For the link to check out your credit score, as well as tips for improving your credit, check out our article Improving Your Credit Score