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How to protect your credit score from fraud

A fraudster’s playbook for convincing a creditor to lend you money to cover up a loss.

It’s a common practice, but one that’s increasingly hard to spot.

It’s called the “swindle.”

For those unfamiliar with the term, swindlers often ask a creditor for money or credit to cover a loss of goods or services or to cover the payment of debt.

This is when a creditor has a bad feeling about the consumer and wants to take the credit card debt off your hands.

In order to protect yourself from swindles, it’s important to understand how fraudsters are able to pull this off.

“They use a variety of tactics to create a negative impression of the person and their business,” says James A. Mott, director of the Institute for Identity and Security, a business and personal finance education center in Atlanta.

“In some cases, they’re using fraudulent credit card applications.

But there are many other ways in which swindling can happen,” Mott says.

A fraudster has a number of tools at their disposal to steal money from people they don’t like, including:Making false promises of help, getting a victim to make a fraudulent purchase, making false claims of creditworthiness, or creating a false debt that the victim can’t pay. 

In the past year, there have been reports of swindled consumers having their credit scores downgraded and even losing their jobs for not paying their bills.

According to a 2015 report by the Federal Trade Commission, the average consumer loses nearly $2,500 a year because of fraud. 

The biggest problem is that these fraudsters can create multiple accounts, make up stories, and fabricate information.

This can result in a consumer getting a negative credit score and losing their job.

There are some ways to protect from swindle, such as:Keeping a clean credit historyKeeping up with credit reportsReporting fraudulent activity to the credit bureausReporting credit reports to the creditorsThe FTC found that nearly half of the fraudulent transactions reported to the Federal Reserve System were from a person using another identity.

The report noted that “at least half” of those swindler’s victims were using an identity that didn’t match their actual name.

“When a swindle victim makes a fraudulent claim, they are often presented with a bogus credit report,” the FTC said in its report.

“And, they often are presented with false information that they cannot prove.”

Some swindlings can also be traced back to one of two factors:An identity theft, or identity theft of a credit card or other financial item.

According to the FTC, credit card fraud is the second-largest type of fraud, behind auto theft.

The agency says a credit reporting agency must use a consumer’s credit report to determine if they have been a victim of identity theft.

The FTC has identified several fraudulent practices that can lead to fraudulent credit reports, including using a credit score to determine a consumer is vulnerable to identity theft or to misrepresenting financial assets.

These are commonly known as “fraudulent credit reports.” 

The FTC recommends using a reputable credit reporting company to determine whether a consumer has been affected by a fraud, and then reporting fraudulent activity immediately.

The report also recommended:Using a credit report that reflects a consumer ‘s actual identity and not the fraudulent information on the report.

If a consumer believes that a credit bureau has misrepresented their credit history, they should contact the consumer’s financial institution.

The consumer should then complete a free credit report from the credit reporting bureau.

A consumer should report fraudulent activity on the consumer credit report, and the credit bureau will investigate the matter.

The bureau will then take appropriate action, including removing the fraudulent report from a consumer credit file and suspending or canceling the consumer account, if necessary.

This may not stop the fraudulent activity from continuing, but the credit report will provide an accurate picture of the consumer. 

This is the way consumers can be protected from swine.

“People who are not the victims of identity fraud, they’ll get the wrong idea about credit reporting and how it works,” says Mark S. Cote, an attorney at Law Offices of James and Mary G. Smith in Nashville, Tennessee.

“When you’re a victim, you don’t know that you have been defrauded.”

The bottom line is that when a swindle occurs, it will hurt you.

“This is not a way to make more money, but it’s a way for the fraudster to get the victim to believe they have money to pay their debts,” Cote says.

“And the victim ends up having to pay more in interest on their debt.”

If you or anyone you know needs help with a personal finance issue, contact a professional who can help you get the help you need. 

Contact the National Debt Counselor, a credit counseling service that provides financial advice to consumers.