How to rebuild your credit after identity theft

Worried about identity theft? You’re not alone. A Harris Poll conducted for the American Institute of CPAs in the fall of 2017 surveyed 1,006 U.S. adults. Nearly half of them, 48 percent, said they believed it was at least somewhat likely that identity theft would cause them financial loss in the near future.

And consider this: 1 in 4 people have experienced identity theft.

It’s not unthinkable, then, that you could become a victim of identity theft. And if you are, this could jeopardize your credit score. After all, a cybercriminal could run up debt on your credit card or take out loans in your name without making any payments. These actions could send your credit score tumbling.

Fortunately, there are steps you can take to rebuild your credit after identity theft*. Here are eight recommendations for what to do.

Step 1. Don’t ignore any warning signs

You may not discover someone is using your identity until after financial damage has been done. Maybe you notice a purchase on your credit card statement that you know you didn’t make. Or maybe you receive a past due notice for a payday loan for which you never applied.

If you notice something strange, save your documents. Don’t throw away that credit card statement or that past-due notice. You’ll need this information when you contact your credit card company, your bank, the merchant and, in some cases, if you need to file a police report or FTC consumer complaint..

Step 2. Contact the credit bureaus

Once you notice suspicious activity, contact one of the three national credit bureaus of Experian, Equifax or TransUnion to place a fraud alert on your credit report. You only have to contact one of the bureaus; that bureau is then required to notify the remaining two so that you’ll have alerts on each of your three credit reports.

These alerts remain on your reports for 90 days. During this time, lenders or creditors must verify your identity before they approve requests for new loans or credit cards in your name. This makes it more difficult for scammers to open new accounts in your name.

You can place fraud alerts through Experian, Equifax or TransUnion.

Step 3. Check your credit reports

Ordering a fraud alert also gives you access to a free credit report from all three credit bureaus. Study these reports carefully for accounts you never signed up for. If you find suspicious activity, notify the credit bureaus immediately. Once the bureaus correct this information, your credit score should start to rise.

Step 4. Close the fraudulent cards, loans

You’ll also need to contact any compromised credit card accounts or loans. If you notice transactions on your credit card statements that you didn’t make, contact your card issuer to shut down the account. Your issuer will provide you with a new card and account number. Be sure to report these fraudulent purchases as soon as you notice them. If you report quickly, banks usually won’t hold you responsible for those charges.

If thieves used your identity to open new loans or credit card accounts, contact the financial institutions behind these to immediately close those accounts down. You want to stop the financial damage that identity thieves are causing as quickly as you can.

Step 5. Create an identity theft report

You’ll now need to dispute fraudulent activity with banks and creditors. You can make this easier by filing an identity theft report.

Start the process by visiting the Federal Trade Commission’s IdentityTheft.gov page. Once here, you can click on the “Get Started” button. Doing this will take you through the process of filing an identity theft report step by step.

Step 6. File a police report

Because identity theft is a crime, you should also file a police report. Go to your local police department, bringing with you your identity theft report created through the Federal Trade Commission and any documents listing the fraudulent activity taken in your name.

Once the police report is created, get a copy of it. This report can help when you are disputing purchases or fake accounts created in your name.

Step 7. Fight fraudulent charges

Once you have your police report and FTC identity theft report, it’s time to officially dispute any fraudulent charges or accounts.

Start by sending letters to each of the three credit bureaus. These letters should list the fraudulent charges and accounts. You should also include copies of your police report and identity theft report.

You can start this process online with Equifax, Experian and TransUnion.

You can also reach out to the bureaus by phone. You can reach Equifax at 1-866-349-5191, TransUnion at 1-800-916-8800, and Experian at 1-866-200-6020.

If you want to send a certified letter to the bureaus, you can do this by contacting Experian at P.O. Box 9701, Allen, TX 75013; Equifax at P.O. Box 740256, Atlanta, GA 30374-0256; and TransUnion at P.O. Box 2000, Chester, PA 19016.

The credit bureaus are required to respond to your dispute letter within 30 days after they’ve received it.

You’ll also need to send dispute letters to any creditors or lenders. You can ask these creditors or lenders to block the disputed charges or information from your credit reports. This can help protect your credit score, too.

Step 8. Freeze your credit

Finally, you should freeze your credit with the three credit bureaus — Experian, Equifax and TransUnion. Fortunately, this is now free.

Freezing your credit prevents creditors or lenders from accessing your credit. While the credit freeze is in place, it will help protect you against further fraudulent activity. You will, though, have to lift the credit freeze, at least temporarily, if you want to apply for new credit or loans.

Bottom line: It takes time to recover from identity theft, but your efforts can also help you rebuild your credit.

*The tips and strategies contained in the foregoing article are not intended to be a comprehensive list, and not all of the tips listed may be applicable to an individual’s particular circumstances. Additional steps may be required, based upon each consumer’s specific situation.