A low credit score could be the result of identity theft

A low credit score could be the result of identity theftSince it began gathering data in 1997, the Consumer Sentinel Network has received 5.4 million complaints of identity theft, 1.3 million of which were reported in 2009 alone, according to the Federal Trade Commission. With these kind of statistics, it is important to check your credit reports at least once a year to make sure you are still in good financial standing, as identity theft could lead to a bad credit history if it goes unnoticed.

Low FICO scores may cause consumers to be rejected for loans and other financial services, but it is often not the fault of the borrower. Identity thieves have several ways of ruining your credit, including making unauthorized charges on various accounts, and even opening a new account without the individual's knowledge or consent.

If you discover unauthorized activity in your report, contact one of the major credit bureaus to put a fraud alert on your account that can last from 90 days to seven years. When applying for new credit, lenders will see this alert, which will help explain why your credit score is so low.

Unfortunately, it can take many months to erase these marks from your record. However, if you must make a big-ticket purchase, like a car, you can apply for a bad credit auto loan.