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Protecting your secret financial identity

Analaura Luna

Protecting yourself from identity theft is one of the most important money management strategies that you can use to keep your finances secure ... but you may be surprised to discover just how simple it can be to keep your 'secret' identity safe!

Secret identities are cool – just look at Bruce Wayne. By day, he’s a charming billionaire playboy; by night, a daring masked vigilante cleaning up Gotham’s streets one villain at a time. His life can get a little complicated, but he usually manages (with a little help from Alfred the butler) to keep everything under control. The exciting truth is that he’s not the only one with a secret identity – you have one too, and it’s so secret that you mightn’t even know about it. Your secret financial identity is your personal credit reference, and managing it properly can make a big difference to your financial life. A positive credit reference can give you the power to make some of your big money management goals come true, but a negative one can get you stuck in financial quicksand. But the worst damage that can happen to your credit reference typically comes as the result of a stolen identity – if you have your ID or credit card stolen, and your personal and financial details are used to fund someone else’s spending spree. If you want to make sure that you keep your ‘secret’ identity under wraps and limit the damage if someone gets their hands on enough of your personal details to pretend they’re you, you need to know how to protect and manage your personal credit reference.

If you’ve never looked into your personal credit reference before, you’re certainly not alone! In 2009, only 226 628 of the 14.5 million people who Veda Advantage (Australia’s credit report agency) has credit records for accessed their personal credit reference file.

So what is a credit reference file? Simply put, it’s a record of your credit transactions, noting your loan or credit applications, defaults on payments, any legal proceedings that were relevant to the collection process and loads of personal information, including your name, current and previous addresses, current and previous occupations, and any directorships you’ve held. This wealth of personal information is the reason that it’s so secret – in fact, the only people who can access it are you, and people you authorise to do so. This is more commonly known as a ‘credit check’ and most credit providers will want access to your credit reference to determine whether you’re a good credit ‘risk’ or not before agreeing to loan you money.

It’s easy to see how having negative notations on your credit reference can seriously impact your ability to take out loans. The good news is that it usually takes about 60 days for a default to appear on your credit reference, and lenders can extend this period at their discretion, so if you find you’ve fallen behind in your repayments it’s a good idea to contact your creditors immediately – they may be willing to help you implement a payment plan that will avoid any negative notations showing up on your file. Veda Advantage also recommends that you check your credit reference at least 30 days before applying for a loan so you can address any issues on your file. You can access your credit reference file for free by contacting Veda Advantage Public Access, and you can also take a look at a sample credit reference file to learn more about how to understand it before you go ‘live’ with yours.

The other ways your credit reference can be damaged are through inaccurate information placed on your file by human error, or because you’ve had your credit identity stolen. These can be particularly problematic because you won’t know a mistake has been made or even that ‘you’ owe money, until the bills start to arrive, the creditors come knocking or a credit application is rejected. Proving that you aren’t responsible for debts incurred in your name can be tough, because with your stolen account details or stolen wallet, the thieves had enough information to prove that they were you, but it can be done and the sooner you report identity theft and take action the better. The first thing to do is contact Veda Advantage to find out what you need to do to prove that there is an error in your credit reference, and if you’re having trouble having the mistake or fraudulent notation fixed, it is possible to get the help of the Financial Ombudsman Service or the Office of the Privacy Commissioner.

By far, the simplest way for you to protect credit identity is to be aware of what’s going on in your file, but even this can sometimes be too little, too late. That’s why we think it’s so important to sign up for the Veda Advantage alert service that will notify you via email if any changes are made to your file, which means that you’ll know immediately if you’re the victim of identity theft. For a small fee, you’ll have 12 months’ access to the alert service and also receive a copy of your credit reference file, so it’s definitely worth considering.

Your personal credit reference is an important part of your financial identity. It’s what credit providers see when you apply for a credit, so you want it to show you at your best – and if you keep an eye on your file, and ensure that you have the alert system set up, you won’t need a secret cave and personal butler to help you protect your identity like Batman does!

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Tags: money management, protect credit, stolen identity, credit report agency, card stolen, report identity theft

Author's Biography

Analaura Luna is an author, wealth adviser and founder of Your Family Your Money. Your Family Your Money’s goal is to simplify traditionally complex financial strategies, demystify financial jargon and debunk common financial myths, becoming every family’s first stop for financial advice, information and inspiration.