Last week, the Consumer Financial Protection Bureau (CFPB) fined Wells Fargo $185 million for illegal and fraudulent sales practices. According to the CFPB, Wells Fargo employees had opened two million credit card and loan accounts without account holders' knowledge using real names and other fake information. The company has since fired over 5,000 employees - employees who say they faced tough sales goals and earned incentives for new accounts - and offered to reimburse account holders who were affected by the fake accounts. If you're a Wells Fargo account holder, you may already have concerns and have lost faith in the bank. For those that aren't Wells Fargo customers, you may be ignoring this news.

U.S. consumers are wise to review learned lessons in the wake of the Wells Fargo scandal.

How The Fake Accounts Affect Credit

Opening any line of credit, whether a loan, bank account or credit card, will affect FICO scores. These FICO scores are used by other creditors or lenders to determine financing, how much to loan and interest rates. Here is how these fake accounts affect your credit score:

• Opening new credit accounts plus the average age of the accounts comprises 15% of a consumer's FICO score.
• If a borrower has recently applied for new credit or had any other credit inquiry, this affects 10% of their FICO score. 
• If the card wasn't used and the account is closed, the percentage of credit used by other cards increases and the FICO score may decrease.

When opening an account with a bank, a consumer is subject to an initial credit check. Once an account is opened in the customer's name, the loan or credit card limit increases an overall credit line available to the customer. If the customer needs credit to purchase an automobile or a home, and the amount of credit is already being used on other open accounts, the creditor may view the customer as a risk. In that case, the interest rate on the auto or home loan could be higher and the subsequent payments would also be higher. Overall, because the fake accounts affected customers' credit scores, Wells Fargo is reviewing ways to assist customers with credit bureau investigations and refinancing of accounts opened after the fake accounts. With FICO scores changing regularly due to various circumstances, resolving customers' credit issues may be challenging. 

How Can Consumers Protect their Credit

Wells Fargo CEO, John Stumpf has vowed to "make it right for every customer". The bank is unsure how they will do that other than making changes to their sales process, eliminating sales goals, inviting customers to review their accounts with the bank and offering confirmation emails upon the opening of accounts. 

Even if you're not a Wells Fargo account holder, there are ways all consumers can protect their credit:

• Regularly review banking and credit statements to look for unauthorized accounts or other discrepancies 
• Check your credit report annually (or check it now if you believe you're a Wells Fargo customer)
• Be aware of potential Identity Theft by setting up Google alerts for your name 
• Place Fraud Alerts on your credit reports so that accounts cannot be opened without proof of your identity
• Shred or protect any information that could be used to open accounts in your name
• Set up alerts through your bank to be notified of unusual activity
• Use strong passwords online
• Don't click on suspicious links in email or in websites that you don't trust
• Get on the National Do Not Call Registry

Consumers should also be aware of their FCRA rights when it comes to debt collection and how past due accounts affects their credit. While busy lifestyles may preclude consumers from staying on top of their credit at all times, setting up alerts and reviewing accounts annually will go far in protecting you from unauthorized threats to your FICO scores. 

Wells Fargo is under strong scrutiny by Senator Elizabeth Warren who is calling for the Department of Justice and the SEC to investigate any other regulatory violations. Wells Fargo customers have already been contacted as the company attempts to make amends. Take control of your credit -  call your local Wells Fargo office to ensure that your accounts and your credit score are not affected.