Higher Credit Scores More Apt to See ID Theft
Consumers having high credit scores are more likely to become victims of identity theft, the Credit Union National Association's News Now reports. That's because fraudsters using their identities find it easier to get credit, according to a study from Experian, Costa Mesa, Calif.
There is a "significant connection" between high credit scores and becoming a victim of identity thieves, with the occurrence rate of identity fraud rising dramatically as credit scores increase, according to Experian's fraud and identity solutions group, which conducted the study.
The findings "should herald a warning for consumers and businesses alike," says Hiq Lee, senior vice president and general manager of Experian's fraud and identity solutions group. "Identity fraud can damage an individual's finances as well as a company's bottom line and reputation with consumers."
Experian has no data suggesting that thieves specifically target high scorers. Instead, the credit bureau explains that consumers with high credit scores tend to get approved for accounts on a more regular basis. Then, when fraudsters use the identifications, they too are more apt to be approved for credit because of their victims' scores.
The top 20% of borrowers—with ratings of 815 and above on the VantageScore 501-to-990 scale—were victims of 48% of all self-reported identity theft cases.
Consumers in the average-to-very good credit ratings—762 to 814—were victims in an additional 13% of fraud cases.
The credit bureau examined about 800,000 fraud cases reported in 2007 and 2008. It parsed the data by victims' VantageScores. VantageScore is an Experian rating system. The more commonly used FICO scores were not surveyed. Data were provided by bank card issuers, retail card issuers, retail banks, mobile phone providers, and utility companies.
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