Fraudulent applications were the most common type of case our identity specialists handled in 2023. When a bad actor uses someone’s personal information to apply for credit, it triggers a new inquiry on their credit report. If you’re enrolled in Allstate Identity Protection credit monitoring, you’ll get an alert. If you aren’t, be diligent in checking your reports for unfamiliar inquiries.
In 2023, Allstate Identity Protection identity specialists handled one type of case more than any other: fraudulent applications.
“The most common trend we observed was the fraudulent use of personal information to apply for various financial products such as loans, mortgages, credit cards, and auto leases, as well as the opening of checking and savings accounts without authorization,” says Vera Tolmachoff, Senior Restoration Manager at Allstate Identity Protection.
In these cases — more than 3,000 of them in 2023 — the crook didn’t successfully open an account. (If they did, that would be new account fraud, the second biggest issue we tackled that year).
Even in these cases, victims needed to take action to have the fraudulent applications (also known as an “inquiry”) wiped from their credit reports.
Finding fraudulent applications or “new inquiries”
Any time you apply for a new line of credit, the lender or creditor will check your credit report. The same applies if a fraudster uses your personal information to submit a fraudulent application. Either way, the check shows up as an “inquiry” on your report.
If you’re an Allstate Identity Protection member who’s enrolled in credit monitoring, we’ll alert you when a new inquiry is made. But, if you don’t have credit monitoring, be sure to regularly review your reports from the three major credit bureaus (Equifax, Experian, and TransUnion). The website annualcreditreport.com allows you to do this for free once a week.
Most inquiries are listed on your credit report for two years, but they’re usually only factored into your credit score for one year. Any new inquiries also have a slight negative impact: A single inquiry generally takes fewer than five points off a person’s score. If a fraudster is racking up multiple inquiries in your name, though, that can make you look like a very risky customer.
Digging into unfamiliar new inquiries on your credit report
While reviewing the inquiries on your report, you may see the name of a lender that you don’t recognize. Before assuming that you’ve found a fraudulent application, ask yourself the following:
Have you recently applied for a line of credit?
Have you requested an increase to a line of credit you already have?
Have you cosigned with anyone else for a line of credit?
Has someone you know applied for credit and added you as an authorized user? (This generally doesn’t trigger an inquiry on your credit report, but in some cases, it can.)
If the answer is “yes” to any of these questions, do a little more research. The lender or creditor you applied with might have used a third party to run the credit check.
You can also try searching in your email account for the name of the company listed on your report. If an email pops up, look in the terms and conditions to find out whether you gave them permission to access your report.
How to remove fraudulent inquiries from a credit report
Allstate Identity Protection members can reach out to us at any point: We can help determine whether an inquiry resulted from an application you made. If it doesn’t, we’ll get to work investigating the situation right away.
Not enrolled with a service like ours? We urge you to take action: Fraudulent applications should be reported and removed from your credit file as soon as possible.
Start by reaching out to the company that ran the credit check in question; their contact information will be listed in the report. Ask them to review your account information and confirm that the inquiry was made correctly.
If the lender can’t confirm the information, they should submit a letter to all the credit reporting agencies stating that the inquiry needs to be removed from your report. If the lender confirms that the information is correct and appears to be fraudulent, you should:
Report it to the Federal Trade Commission at identitytheft.gov.
Send a letter to Experian, Equifax, and TransUnion asking that the inquiry be removed from your report. Include your FTC Identity Theft Report.
Place a fraud alert on your credit report. This free notification requires creditors to verify your identity before obtaining your report.
For extra security, consider placing a credit freeze on your report. Creditors won’t be able to open new accounts in your name unless you lift the freeze.
Whether you’re a current member or want to learn about securing your identity and finances, we’re here to help in any way we can.
