Identity theft: It can affect your credit score in a number of ways

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credit score suffers considerably. Identity theft, more often than not, can have a significant impact on your credit score in a number of ways. Unauthorised accounts: Identity thieves could open credit card accounts, loan in your name without your knowledge.

If these accounts are used irresponsibly or go unpaid, it can result in negative marks on your credit report, lowering your credit score. Missing payments: If identity thieves use your information to make purchases or obtain credit but fail to make payments on time, it can result in late payment notations on your credit report, which can lower your credit score. ALSO READ: CIBIL Score: What is it and why is it important? Key questions answered Increased credit utilisation: If an identity thief maxes out credit cards or other lines of credit in your name, it can increase your credit utilisation ratio.

High credit utilisation can negatively impact your credit score. New credit inquiries: When a thief applies for credit in your name, it results in hard inquiries on your credit report. While a couple of inquiries may not adversely impact your score, multiple inquiries within a short span of period may have an adverse effect.

Collection accounts: If identity thieves accumulate debts in your name and those debts are sent to collections, it can severely damage your credit score. Collection accounts remain on your credit report for seven years and can significantly lower your score. Identity mix-ups: Sometimes, identity theft can lead to a mix-up of credit information between you and the thief.