Credit 101: Bureaus, Reports & ID Theft

Credit Score on Mobile Phone

Credit Is More Than Your Card 

When your information is exposed in a data breach, it can cause panic and concern. Who can I trust? What should I do? And who has access to my information?  

The good news is that some of the most effective preventative measures are already within your reach. Your credit information – paired with the right credit protection tools – can help defend against fraud and identity theft after a data breach event.  

Each of us understands the concept of credit from our own perspectives. Credit typically means “buy now, pay off later.” Credit scores indicate our lending risk and credit reports are often reviewed to rent an apartment, apply for a loan or open new credit card accounts.

Industry experts (including those of us at Sontiq, too) often suggest that consumers check their credit reports, consider placing credit freezes or fraud alerts, and contact the three major credit bureaus. So, let’s look at how credit works, how your credit reports can help you spot identity crime and additional tools you can use to further protect your credit information.  

Credit Bureaus

The United States has three major credit reporting agencies (also referred to as credit bureaus): Experian, Equifax, and TransUnion. A credit bureau’s role is to collect consumer credit information from banks, creditors, and other businesses to resell as credit reports.

The most important aspect of credit bureaus is that they operate under the Fair Credit Reporting Act. In short, it simply means you have the right to review your credit information and dispute any inaccuracies you find.

Credit Reports & Scores

Your credit report is a compilation of your credit history that is kept on file with the credit bureaus. Your credit score uses the information in your credit file to tell others how reliable you are when it comes to lending.  

Credit bureaus partner with different companies to collect their information. Therefore, experts suggest that you request credit reports from all three credit bureaus to get the most accurate representation of your credit history (some reports may include or exclude certain companies depending on the bureau’s own partnerships). Finding discrepancies or unfamiliar accounts on these reports can point to reporting errors – that could negatively affect your credit score – or potentially indicate identity theft.

The best part? You are allotted one free credit report every 12 months from each of the major credit bureaus.

An analysis made by the U.S. Public Interest Research Group (U.S. PIRG) found consumers placed 38,712 complaints in the first five months of 2020 to the Consumer Financial Protection Bureau (CFPB). Complaints regarding incorrect information found on credit reports increased by 86% during the COVID-19 pandemic period (March to July 2020) and accounted for 65% of the total complaint volume.

 Understanding Your Credit Report

While we hope that you’ll find errors as opposed to instances of identity theft, reviewing your credit reports will help you spot both. Focus on these areas of your credit report so that reviewing them is a breeze:


Your credit report header contains Personally Identifiable Information (PII) like your name, birth date, Social Security number, and address. This section will also list current and previous employers, addresses, and aliases – all of which should be accurate and up-to-date.

What to look for: Errors may appear in this section if there are associated sub-files attached to your credit report. While there are legitimate uses for credit sub-files, (such as a legal name change), this can sometimes mean your information was used as part of a synthetic identity.


Credit inquiries also referred to as “requests,” are a list of instances where your credit information was requested. Inquiries are typically broken into two different types: hard inquiries and soft inquiries.

Soft inquiries – or “viewed by you” – are credit requests that came from you or other known entities. You’ll find requests from yourself, existing lenders, employers or insurance agencies in this section. These inquiries are more for your reference, and therefore do not impact your credit score.

Hard inquiries – or “viewed by others” – are credit requests that come from someone else, typically for screening purposes. You may find credit checks for loan applications, renting apartments or buying a car in this section. Unlike soft inquiries, hard inquiries are shared with lenders, and therefore will impact your credit score.

What to look for: If you notice unfamiliar inquiries in this section, contact the credit bureaus immediately. Suspicious inquiries can often reveal instances where fraudsters were trying to open accounts or apply for loans in your name.


Trades, or “open trades,” simply refer to active accounts in your name. Any of your accounts that are open and active will appear in this section – including loans, lines of credit or other types of credit accounts. Creditors use this section to review your payment habits and activity to help determine your lending risk (aka credit score).

What to look for: Like inquiries, contact the credit bureaus immediately if you find any accounts that you do not recognize. Unfamiliar accounts in this section can either be a result of inaccurate credit reporting, or evidence that your identity was used to open a fraudulent account.

Fraudsters Want Your Credit Information

Criminals can use personal information commonly exposed in data breaches such as Social Security numbers, names and birth dates to misuse and manipulate your credit information. Your credit reports can come in handy when your identity is at risk.

Fraudsters assume you’ll notice money missing from an existing account faster than you’ll discover a fraudulent new account. Instead of stealing money that you already have, criminals can open a new line of credit, spend as much as they want, abandon the account and leave you to dispute the charges.

What should I do?

There’s no such thing as “too much protection” for your credit files. Fraud alerts, credit freezes and credit monitoring are three effective tools available that you can use to secure your credit files.

Fraud Alert Vs. Credit Freeze

Fraud alerts and credit freezes are ways to add an extra layer of protection to your credit files. A fraud alert placed on your credit file simply flags it so that others know you could be a victim of fraud or identity theft. Fraud alerts are free, can be done online, and are typically placed in 90-day intervals. Fraud alerts are helpful as a preventative step to spot fraudulent activity on your accounts sooner.

Credit freezes are different than fraud alerts because they completely restrict access to your credit files. Credit freezes require additional verification – and your approval – before your files can be viewed. If you find cases of identity theft on your credit reports, credit freezes will help prevent further damages from occurring. Note that credit freezes will stay on your files indefinitely until you choose to remove them, and some fees (based on state) may be involved in placing or lifting them.  

Credit Monitoring

Credit monitoring is another preventative tool that can be especially helpful when Social Security numbers are exposed in data breaches. Criminals can use your Social Security number to apply for lines of credit, loans and other new accounts. Credit monitoring alerts you of any inquiries or changes to your credit report so you’re aware of any suspicious activity faster. This gives you time to contact the credit bureaus, place fraud alerts or credit freezes, and review your accounts for any other fraudulent changes.

*Originally posted Oct 5, 2017. Updated December 14, 2020.*


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The views and opinions expressed in this article are those of EZShield Inc. alone and do not necessarily reflect the opinions of any other person or entity, including specifically any person or entity affiliated with the distribution or display of this content.

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