identity theft
The fraudulent use of another person's personal information to obtain credit, goods, or services.
Example
“Identity theft resulted in six fraudulent credit card accounts opened in his name.”
Memory Tip
THEFT of your IDENTITY — someone becomes you financially. Act fast to minimise damage.
Why It Matters
Identity theft can devastate your credit score and financial health, potentially taking years to repair. Understanding this threat helps you protect your personal information and monitor your accounts for unauthorized activity that could damage your creditworthiness.
Common Misconception
Many people believe identity theft only happens through data breaches or online sources, but thieves also steal information through mail theft, dumpster diving, or social engineering. Physical documents and verbal deception are just as dangerous as digital attacks.
In Practice
A thief obtains your Social Security number and opens a credit card account in your name, making purchases totaling 5,000 dollars before being discovered. You discover fraudulent accounts on your credit report months later, and it takes 18 months and countless disputes to remove the false information and restore your credit score from 580 to 720.
Etymology
From Latin 'identitas' meaning sameness plus Old English 'thiefth' meaning stealing.
Common Misspellings
Check your credit score free — no impact
Related Terms
More in credit
Other credit terms you should know
See Also
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