Am I missing something here? Paying cash doesn't prevent the opening of fraudulent lines of credit in your name.
Equifax et al don't particularly care if you pay cash, they have some form of record on you either way.
Equifax et al don't particularly care if you pay cash, they have some form of record on you either way.
If there is no other identity using this SSN, then the likelihood of the fraudulent activity being dectected is low.
This is why SSNs belonging to elderly people, children/teenagers, and the recently deceased are of relatively higher value for a lot of people out there doing identity fraud.
Synthetic identity fraud involves you making a bunch of inquiries with completely fake SSNs and squatting on them for a few years, maybe bringing them out of cold storage every so often to make a few more inquiries to keep them on the credit-building radar before you ultimately qualify for actual lines of credit and do a bust-out. There is no oblivious meatbag being used as a patsy-- the identities are completely fake, which is what makes them synthetic.
Using a completely fake SSN instead of a stolen SSN is what distinguishes "synthetic identity theft" from "synthetic identity fraud".
The identities in both cases are completely fake, but only in the identity theft case is the synthetic identity backstopped by a legitimate SSN that belongs to a real person somewhere. If that real person is a child or "off the grid", then the CRAs have no idea who the real person is and their SSN is ripe for creating a synthetic identity that will probably go undetected for years.
* Lack of history makes successful applications less likely
* Lack of history makes fraud stand out, any activity is fraud
* Since fraud has been identity theft, meaning I have to bitch-and-moan, lack of utilization of credit lends to a stronger story which can help convince folks whereas a serial debtor makes for a less sympathetic and less convincing victim.
Additionally, you have less risk of compromise:
* That website can't leak my CC details
* That skimmer can't capture my CC details
* That waiter[0] can't clone my card
I went full-cash, even paying for a utilities-included apartment. It also seems to cause me to keep a bit better track of my spending. Easier to overspend when your balance is a number in the cloud somewhere.
[0] - Depends on country, e.g. the US frequently has waitstaff take your card to a terminal
Additionally, it's possible for cards to get locked and that's a PITA to deal with, and god forbid it takes more than a moment to unlock. Hope you have backup cash.
Personally, I'd rather deal with the known hassle (cash) vs. the unknown future hassle (card).
In Europe you have a 24hr window to catch the fraud. Afterwards you assume all liability.
It relates to the article in the following obvious way. A freeze on running a credit report means that someone cannot run your credit report. Without the ability to run your credit report, someone cannot discover your existing accounts, limits, addresses, and balances by running your credit report.
You also wrote: Equifax et al don't particularly care if you pay cash, they have some form of record on you either way.
This is not correct. Equifax and the other bureaus do not have a record of you on a credit report if you always pay cash and never apply for or run a credit report.
If you have income and have and pay any recurring bills (even utilities, etc.) you have credit to exploit; it may be a fairly weak credit history, but if you have no substantive debt, you probably also then have a good listed debt-to-income and debt-to-asset ratio, which can (potentially more than) offset that sparse history when opening a new line of credit.
To be not exploitable you either need to be completely invisible to the system or appear so uncreditworthy that no one relying on the system would loan you money at all.
(Of course, personal data leaks from credit tracking DBs can be used for identity fraud for things unrelated to securing credit, too, and being visible but not creditworthy doesn't protect you from that at all.)
I was always told this was true, but I waited for years to finally get a credit card or try to apply for a loan. Everyone informed me I had ZERO credit history, despite paying apartment and utility bills for years. I don't have any explanation for why this is true, except that I started my credit from scratch in my late-20s.
None of the three major bureaus track any of this information, so in practical terms they do not factor into a credit history. Income is not collected by itself and placed on a credit report. It's not a weak credit history but non-existent.
While that should be the case, unfortunately, that's not true. And it may make you less likely to notice if someone does in your name.