Identity theft can be unsettling. One day everything appears normal. The next, you discover a credit card, loan, or credit check you don’t recognize.
While no one expects it to happen to them, identity-related fraud can affect Canadians of all ages and income levels. Understanding the warning signs may help you catch problems earlier and respond more quickly if something doesn’t look right.
How Does Credit Fraud Happen?
Credit fraud occurs when someone uses your personal information to apply for credit without your knowledge or permission.
Fraudsters may obtain information through:
- Data breaches
- Phishing emails or text messages
- Stolen mail
- Compromised online accounts
- Social engineering scams
In some cases, criminals may have enough information to apply for credit cards, loans, or lines of credit using someone else’s identity.
What are the warning signs?
Identity theft isn’t always immediately obvious.
Some of the most common warning signs include:
New Credit Inquiries You Don’t Recognize
Many lenders perform a credit check when someone applies for new credit.
If you see checks from lenders you haven’t contacted, it may be worth investigating further.
Accounts You Didn’t Open
A new credit card, line of credit, or loan appearing on your credit report can be a serious warning sign.
Even if an account has not yet accumulated a balance, it should be reviewed immediately.
Changes to Your Personal Information
Unexpected changes to your credit file can also be a red flag.
Watch for:
- New addresses
- New phone numbers
- Name variations you don’t recognize
- These changes could indicate someone is attempting to use your identity.
An Unexpected Change in Your Credit Score
Credit scores can move up and down for many reasons.
However, a sudden or unexplained drop could signal new credit activity or other changes worth reviewing.
- Review your credit reports carefully and on a regular basis.
- Contact Equifax Canada and TransUnion Canada to report the suspicious activity, review your credit file, and ask about placing a fraud alert on your account.
- Contact any lenders connected to suspicious accounts, applications, or credit inquiries.
- Report identity fraud to the Canadian Anti-Fraud Centre.
- Consider filing a police report if appropriate.
The specific steps may vary depending on your situation, but early action is often important.
Why Monitoring Your Credit Matters
Many people only check their credit when applying for a mortgage, car loan, or credit card.
The challenge is that fraudulent activity can happen at any time.
Regularly reviewing your credit information can help you identify suspicious activity earlier, whether it’s a new inquiry, an unfamiliar account, or changes to your personal information.
Credit Monitoring Can Help You Stay Informed
Credit Monitor is a free feature available within your Credit Karma account under the “Credit” tab.
It shows the latest updates reported to TransUnion by lenders and other providers.
When a new alert appears on your account, you’ll be asked if you recognize it. This helps you keep track of expected and unexpected changes quickly. Learn more here.
While credit monitoring cannot prevent identity theft, it may help you become aware of potential issues sooner so you can investigate and take action if needed.
How to Help Protect Yourself
While no strategy can eliminate risk entirely, there are steps that may help reduce your exposure to identity-related fraud.
Consider:
- Using strong, unique passwords
- Enabling multi-factor authentication
- Being cautious with unsolicited emails and texts
- Monitoring your credit regularly
- Reviewing your financial statements frequently
- Small habits can make it easier to spot unusual activity before it becomes a larger problem.
Monitor Your Credit Regularly
Your credit report can sometimes reveal signs of fraud before you notice them elsewhere.
Watching your credit file can help you spot:
- Accounts you don’t recognize
- New addresses or phone numbers
- Unauthorized credit inquiries
- Collections or negative information that doesn’t belong to you
The sooner suspicious activity is detected, the sooner you can begin investigating and responding
Bottom line
Identity theft and credit fraud can happen when personal information falls into the wrong hands. In many cases, the warning signs first appear on a person’s credit file.
Monitoring your credit regularly can help you stay informed about changes that may require attention, from new inquiries to unfamiliar accounts or personal information updates.
Want an easier way to keep an eye on your credit? Sign up to Credit Karma and get free credit monitoring alerts for changes to your TransUnion credit report.