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5 Easy Ways to Fix Your Credit After Identity Theft

Last Updated: November 26, 2018

 

Identity theft is one of those things that you think will never happen to you. Then, one day, you notice that something is wrong with your finances. You dig further and find out that somebody stole your identity. While you may think that identity theft is a freak occurrence, it is incredibly common. Here are a few statistics from a Javelin report that support this assertion:

• 6.64% of consumers in the United States were victims in 2017, which is roughly 1 in 15.

• In sheer numbers, that means over 16 million people.

• In 2016, only 1 million people suffered an attack.

What these numbers mean is that identity theft happens every day, it is on the rise, and everyone is at risk. While there are a variety of methods you can use to protect yourself, you are never entirely safe. If you are the victim of this crime, you should start to fix your credit right away. Below, we explain how.

Contact All Organizations With Fraudulent Charges

One of the typical ways criminals steal your identity is by opening an account in your name, the most common of which is a credit card. Once they do, they max out that credit card by purchasing whatever items they want. Whether that is food, electronics, or any other good, the criminal never pays the bill. Instead, they move on from the card and leave you to sort it out.

What is so unfortunate about this crime is that you likely won’t find out for months. When the fraudster moves on from the credit card, the account will start to amass missed payments. This behavior is relatively standard though, so the company may not contact you right away. Then, after accumulating a considerable amount of debt and bad credit activity, debt collectors will come after you. When they do, you must stay calm and explain the situation to them. Each will have a different method of sorting out identity theft issues, so contact each of them individually and make sure you’re on the same page. While this won’t fix your credit right away, it is a critical step in keeping your score from falling further.

Close or Adjust All Compromised Accounts

Another way people commit identity theft is through using your personal credit card. Unlike the section above, you will likely detect this right away. Either your bank will contact you because a charge looked fraudulent, or you will notice strange charges when you check your statements. Either way, you should contact your bank right away and tell them you suspect identity theft. When you do, they will deactivate your current card and mail you a new one. If necessary, they can also close your checking account and help you open another one.

Follow Credit Bureau Best Practices

The next organization that can help you fix your credit is a credit bureau. The three you need to know about are Experian, Transunion, and Equifax. Also, please note that you must take action with all of them, not just one. When you contact them, you have two options.

1. Fraud Alert

This is a designation you put on your account that requires lenders to take extra account verification measures before awarding a line of credit. What this will do to prevent fraud is deter an identity thief. These additional steps will either expose them or cause them to move on to an alternate victim. The typical length of a fraud alert is 90 days, but you can choose an extended version if you want long-term security.

2. Credit Freeze

A more drastic measure is applying for a credit freeze. While a fraud alert adds barriers to taking out new lines of credit, a freeze stops them entirely. For this reason, a credit freeze is the most secure option you can choose after repeated identity theft issues. When you put one on your account, you will receive a pin number. When you want the freeze lifted, you can enter your pin and will be free to take out loans again.

3. Report to the Federal Trade Commission

Another excellent way to fix your credit is by reporting to the Federal Trade Commission (FTC). The FTC is a government agency that is committed to consumer protection. While doing so can take many forms, one of their specialties is identity theft. When you visit their site, you can navigate through their straightforward identity theft reporting system. If you’d rather talk on the phone, you can also call them at 1-877-438-4338. After reporting, feel free to spend a bit more time on their site. It is packed with information, and there is a good chance you’ll learn something useful.

Reporting to the FTC will give you further proof that your identity was stolen. Having an official FTC report will go a long way in proving your legitimacy when you contact various companies about receiving refunds and debt forgiveness.

4. Improve Security and Habits

At this point, you have taken a few critical steps to fix your credit. Your duties are not over, though. Instead, you must take steps to strengthen your credit score make sure theft doesn’t happen again. You can do so by following these guidelines:

5. Password Best Practices

One way criminals steal your identity is through guessing or hacking your passwords. To prevent this, make sure you include numbers, letters, and special characters, and are relatively long. Additionally, you should never use the same password twice. One of the best ways to make this happen is using a password manager, which will generate and securely store all of your critical information.

6. Online Shopping

Another way scammers take your information is through phony websites. Often, they set up a store and entice buyers into giving their billing information. Other times, they clone an established site and try to pass it off as legitimate. To protect yourself, do your best to only order online from brands you trust.

7. Public Networks

When you’re at home connected to your internet provider, this is a private network. If you are at a library, college, coffee place, or any other public source of wifi, you are browsing on a public network. These public sources of internet, while useful, are also dangerous. For this reason, we advise never dealing with financial information in a public space.

8. Review Statements Regularly

Though your credit card provider likely has an anti-fraud system, it is not perfect. This is why you should review your statement every month for suspicious charges. Additionally, this will help you save money, as you will catch non-fraudulent mistakes too.

9. Review Credit Report Regularly

Another way to catch identity theft is by looking at your credit report. When you do, you will see if any fraudulent accounts are opened. You can review your report once a year for free on AnnualCreditReport.com, or use a paid option for more frequent checks.

10. Follow General Credit Building Guidelines

There are many ways you can fix your credit that is not related to identity theft. Instead, they are general methods that apply to everyone. A few of them are paying your bills on time, not carrying a balance on your credit card, and not opening new lines of credit.

Though going through identity theft is an incredibly frustrating experience, its effects are usually reversible. If you utilize the 5 methods we detailed above, you will fix your credit quickly and make your identity theft nightmare a thing of the past.

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