How Do I Fix My Credit After Identity Theft?

  • by Baron Angus
  • 2 Months ago
  • 0

Identity theft is a serious problem the world over which results in financial losses worth billions of dollars. According to Javelin Strategy, 14.4 million people fell victim to ID fraud in 2018, with losses amounting to over $3 billion.

Common targets were identified as mortgages, student loans, car loans, and credit cards. With your information, a fraudster can rack up your debt by making purchases or taking loans without making payments. If you’re a victim wondering how to fix your credit after identity theft, here are the steps to take.

Step 1: Contact the Credit Bureaus

Once you notice a fraudulent purchase on your card or receive a past due reminder for a loan you never applied for, it’s time to take action. The first step is to notify at least one big credit bureau; Equifax, TransUnion or Experian will do.

Once notified, the bureau will place an alert, known as an initial fraud alert on your credit report and request the other bureaus to do the same. The alert ensures that creditors or lenders take extra measures to verify your identity before approving any new loans or credit requests.

The alert remains on your reports for 90 days, making it hard for scammers to continue defrauding you within that period.   

Step 2: Check your Credit Reports

For your credit to start rising, you need to weed out suspicious items on your credit report. Once you have placed a fraud alert, the three national credit bureaus will furnish you with a free credit report. Scrutinize all the entries and notify the agencies to correct any suspicious activities.

Step 3: Close the Compromised Accounts

If scammers use your identity to open and operate new credit cards or loans, notify the respective financial institutions. The issuer will shut down the accounts to stop further losses. For compromised accounts that you are currently using, ask for new cards, account numbers or change of login details and security checks.

Step 4: Report the ID Theft to Relevant Authorities

Most countries have an agency tasked to deal with identity theft cases. These are anti-fraud agencies that assist in investigating and flagging connections between fraud cases across the country.

For example, in the US, the go-to agency is the Federal Trade Commission. You can reach them at 1-877-438-4338 or visit www.identitytheft.gov/. The website also helps in coming up with a recovery plan and tracking the progress.

Also, you will have to file a police report. The report will be handy in case you have to fight fraudulent charges or dispute purchases.

Step 5: Freeze Your Credit

As a final measure, you need to freeze your credit. Write to the three credit bureaus to effect the freeze. Note that this will prevent your creditors and lenders from accessing your account, which could further affect your credit score. Once the freeze is in effect, you won’t be able to get new loans or credit facilities, but neither will the thieves.

Final Word

Fixing your credit following identity theft is a tedious and slow process. While the process is underway, consider other avenues of accessing credit that don’t require going through creditors and lenders. You should also consider consolidating your debts to narrow down fraud avenues, hence making it easier to spot fraudulent requests.

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