The Real Cost of Identity Theft
It is no secret that having your identity stolen is something you should actively protect yourself against. Resolving an identity theft is time consuming, may cause you to have credit requests denied, and leaves people feeling personally invaded. However, many people do not realize that their finances could take a significant hit after one’s identity is stolen, often in surprising ways. Every situation is different and much of the damage is not easily quantifiable. When thinking about the potential cost of having your identity stolen, consider the following factors:
Time – When your identity is stolen, there is a long list of tasks you must complete immediately, including filling out an identity theft report, freezing your credit and requesting copies of your credit report. This takes time, often a lot of time, which takes away from other activities, such as spending time with family or possibly working. You will also need to carefully review your credit report regularly for the next few years to make sure new instances of fraud do not show up.
Higher interest rates – Identity theft victims may see their credit scores drop over time after a thief hasused stolen personal information to open a loan or new credit account and thendefaulted on payments. In the meantime, this means that if your car is totaled in an accident and you apply for a car loan, you may end up paying a higher interest rate due to your damaged credit score.
Loss of Opportunity Costs – In some cases, your credit may be so damaged that you cannot even get a loan after an identity theft, according to a survey conducted by the Identity Theft Resource Center. This means you may not be able to buy the renovated condo down the street that is a fantastic deal, but instead pay a higher price next year for a unit in need of an update.
The bottom line is that each time your identity is stolen, you will face unexpected costs, both in dollars and hours. The best solution is to take steps to protect your identity. And spending a small amount each month to help keep your identity secure and prevent widespread damage if fraud is detected can end up saving you a lot of time and money in the long run.