How To Repair Your Credit After Identity Theft

Most people think that identity theft will never happen to them, but this white collar crime is on the rise.

Unfortunately, this means that more people are discovering how devastating identity theft can be to their credit scores.

If you have been the victim of identity fraud there are steps you can take to repair your credit report. It will take some time and a little work, but it will be worth it when you have restored your credit score.

Monitor Your Credit Reports

One of the most important things you can do to protect your good credit rating is to closely monitor your score.

If you don’t know what your FICO score is or what is in your credit report, you probably won’t know that you’re a victim of identity theft until you apply for a loan.

You are entitled to one free copy of your credit report from the three credit reporting agencies every 12 months. It is crucial that you monitor these reports if you want to protect your credit, and prevent identity fraud.

The instant that you notice anything that might indicate someone else is using your identity, start keeping records. This includes,

Copies of all your credit reports
Printed copies of letters, faxes and emails
Records of all phone calls

Basically, you will want to have records of everything pertaining to the potential problem.

If identity theft is suspected the next step is to contact either Equifax, TransUnion or Experian to have a “fraud alert” placed on your report. Once the alert is placed with one credit reporting agency, it will automatically be transferred to the other two. The fraud alert will stay on your credit report for 90 days, giving you time to resolve the problem.

A fraud alert not only notifies creditors that your identity must be verified before credit is issued, it also supplies you with a free credit report from the three reporting agencies.

It is important that you check each of your credit reports for any errors or other signs of suspicious activity.

Quick and Easy Credit Fixes

Getting your credit back after identity theft will take time. There are a few things you can do to make the process go more smoothly. If your credit accounts have been comprised, you will want to close them immediately. Most credit card companies and other lenders won’t hold you financially responsible for the fraudulent chargers if the suspicious account activity is reported in a timely manner.

If a fraudulent account has been opened in your name, close it. The charges will still need to be disputed, but this will stop the identity theft from continuing.

Get an Identity Theft Report

After notifying the credit reporting agencies and closing affected accounts, you will want to create an identity theft report. The information in the report will be used to verify your claims of fraudulent activity so your credit can be restored.

You will want to file an identity theft report with the Federal Trade Commission. This can be done over the phone or online at identitytheft.gov. It is also important that you keep several copies of the affidavit for your records. Even though, the FTC seldom investigates identity fraud cases most credit card companies do expect to receive a copy of the official report.
A police report should also be filed. You will need to bring proof of identity, any documents pertaining to the theft and a copy of the FTC affidavit. The police report should contain as much information as possible, and you will also want a copy for your records. If there are any problems filing out the police report, the FTC has released a memo for law enforcement agencies that can be referred to.

How to Dispute Fraudulent Charges

Now that you have an identity theft report supporting your claims, it is time to dispute the fraudulent charges.

You will want to send identical letters to the three credit reporting agencies disputing the fraudulent accounts and charges.

Even though the three credit bureaus automatically share this information with each other, you might be able to speed up the repair process if they each receive a letter.

Once your letter has been received, the credit reporting agency has 30 days to respond to your dispute.

You will also want to include,

Copy of your identity theft report
Credit report with the disputed charges highlighted
List of the erroneous charges

If you’re not sure what format to use for the letter, there is a helpful example on the FTC website.

The letter must be sent certified mail, and it is recommended that you request a return receipt for your records. You can also ask to have the disputed information blocked from your credit report, if your claims of identity theft can be clearly substantiated. This way your credit report should be accurate, even before the errors are officially removed.

Notify Existing Creditors

Any financial institution that you have an auto loan, mortgage or credit card with also needs to be notified of the identity theft. You will want to send your existing creditors the same information that was supplied to the credit reporting agencies.

Even though the credit reporting agencies will notify anyone that you hold accounts with, sending letters yourself can speed of the process of having the errors permanently removed from your financial history.

Consider a Security Freeze

Sometimes a security freeze is the best way to protect your credit while your identity theft problem is being resolved. It will effectively block anyone from applying for a new line of credit or loan using your information. This also means that you won’t be able to open any new accounts either, which is why a security freeze is not always the right option for everyone.

If added protection is your main goal, you can also place an extended fraud alert on your accounts.

It works the same way as an initial fraud alert, only it is extended for seven years. Before you choose either option, you will need to have a copy of your identity theft report.

Don’t Forget to “Follow Up”

It is important to check with the credit reporting agencies and every lender you hold accounts with that they,

Have received your letters of dispute
Removed incorrect information from your credit report

Most financial experts recommend starting your “follow ups” 30 days after mailing the letters, and continuing to check on the progress of your dispute. Not only does this show that you are dedicated to repairing your credit report, it also helps to ensure that all information is correct.

Sometimes the disputed information isn’t removed from a credit report, even after multiple attempts. If this happens you have two courses of action.

Contact the Consumer Financial Protection Bureau (CFPB) and ask them to open an investigation.
The National Association of Consumer Advocates (NACA) can also be contacted to request legal action being taken to remove the fraudulent charges from your credit history.

Keep Looking for Signs of Identity Theft

Even after you have reported the identity theft and have begun the process of having the fraudulent information removed from your credit report, you might still be at risk. This is why it is important to continue to look for signs that someone might still be opening accounts in your name. Some of the warning signs that you want to watch for include,

Mail missing
Checks that bounce
Credit/debit cards declined
Bank statement shows unexpected withdrawals
Loan application denied due to a bad credit score
More than one tax return reported by the IRS filed with your social security number
Credit report shows unfamiliar charges or accounts
Bills arrive for unreceived medical treatments
Creditors trying to collect on debts not incurred by you

There’s Hope After Identity Theft

Just because you’ve been the victim of identity theft, it doesn’t have to mean that your credit is ruined for years.

There is hope and your good credit score can be restored, often in only a few months.

It will take some time to get the misinformation removed from your report, along with some work. However, when your good credit score helps you get approved for a low interest auto loan you’ll be glad that you took the time to dispute the fraudulent claims.