9 essential steps in the identity theft credit repair process

The impact of identity theft on your credit can be severe, affecting your ability to get loans, mortgages, housing, and even employment.

If you need to report the theft of your identity, it’s best to act quickly. Here’s what to do first:

• Report financial fraud to your bank, credit card company, and credit lenders you’re associated with.
• Contact the FTC and file an identity theft report.
• Place a fraud alert with the credit reporting agencies (Equifax, Experian, and TransUnion).
• File a police report.
• File a claim with your insurance company if you have existing identity theft insurance coverage.

These are solid first steps, but it doesn’t end here. An effective identity theft credit repair strategy also involves maintaining good credit practices after identity theft, such as regularly monitoring your accounts, promptly reporting any suspicious activity, and enhancing your security measures.

Our step-by-step guide below walks you through the measures you’ll need to take to repair your credit after identity theft.

How to fix your credit score after identity theft

To fix your credit after identity theft and begin the process of credit score recovery, report it as soon as possible. Then, place a fraud alert with the credit bureaus and consider freezing your credit. You can usually mitigate the impact that identity theft has on your credit if you do these things quickly.

Here’s a detailed breakdown of the steps to take to fix your credit score.

1. Report the identity theft

Report identity theft to the FTC first. Then, report to one of the three credit reporting agencies (Equifax, Experian, or TransUnion), the local police, and your bank or financial institution.

The FTC report is the proof that you’re the victim, and the police report strengthens your case by creating a paper trail, which can help lead back to the initial incident. Both reports are important evidence that you can use when disputing fraudulent transactions. The more evidence you have, the better.

2. Place a fraud alert and freeze your credit

Placing a fraud alert with Equifax, Experian, or TransUnion puts a flag on your credit file. If you have proof of identity theft, lenders will be prompted to take extra steps to verify your identity for up to seven years before granting new credit lines. To place a fraud alert, go to one of the three credit reporting agencies listed below (also called credit bureaus) and fill out a fraud alert form online.

A credit freeze is optional, and it restricts all new credit access. This means you won’t be able to open a new credit account while it’s activated, but you can unfreeze it at any time. To freeze your credit, make a request to all three of the bureaus separately using the contact information below.

3. Review your credit report

If an identity thief runs up debt from credit card fraud in your name, this can have a big impact on your overall credit health. So, if you’re recovering from identity theft, review your credit reports regularly to catch fraudulent activity and dispute it immediately. Here’s what to check for:

• Open credit accounts that you don’t recognize.
• Unfamiliar hard inquiries.
• Incorrect personal information.
• Unusual balances or late payments.
• Charges on accounts you no longer use.
• Public records you don’t recognize.

If a vendor name on your credit report seems unfamiliar, a quick Google search can help clarify it, as vendors often use different billing names.

To dispute fraudulent credit information, contact the three credit bureaus and be ready to provide your FTC report and other evidence to support the claim.

Disputing false personal information or credit lines helps you restore the accuracy of your overall credit. Concretely, an accurate credit report is critical for ongoing successfully applying for new credit lines, like home or auto loans. In some cases, it can even be important for future employers.

To dispute credit card charges specifically, contact your bank or credit card company directly. You typically need to send a written billing error notice within 60 days of the statement that includes the charge. Tell them you think there are some fraudulent charges on your account, and be ready to provide evidence of a credit card scam.

5. Have unauthorized hard credit pulls removed

A hard inquiry is when a lender checks your credit report to decide whether to approve a loan. These types of credit checks can temporarily lower your credit score. If you suspect that a hard credit inquiry on your credit report is fraudulent or you know you didn’t authorize it, it can both temporarily lower your credit score, and even worse, be a sign that someone is trying to open a new credit line in your name.

As part of your identity theft credit repair, first request that the creditor remove the hard inquiry, making sure to keep all evidence of your correspondence with them as you do so. If they don’t comply, dispute the hard inquiry with the aforementioned three credit bureaus. It should take about a month to get an unauthorized hard inquiry removed.

6. Inform debt collectors that your identity was stolen

If fraudulent debts have been sent to collections, notify the debt collector in writing that the debt resulted from identity theft. Provide supporting documentation such as your FTC Identity Theft Report, proof of identity, and any additional evidence, including a police report if you already have it.

The U.S. Justice Department provides examples of draft letters you can use when contacting businesses and other debt collection agencies about identity theft and fraudulent collections. Here’s their example of how to inform a debt collector via email or physical letter that your identity was stolen; insert your own information into the text in brackets:

7. Prioritize on-time payments

Your credit score is heavily dependent on whether you make your payments on time. Late or missed payments can damage your credit score even further, and the effects can last years. To help repair your credit and get yourself back on track after falling victim to identity theft, prioritize making timely payments on your legitimate credit card bills.

Roughly 35% of your FICO score is based on timely payments. Missed payments can negatively affect your score, with repeated missed payments having more severe effects.

8. Consider using secured credit cards

A secured credit card requires a cash deposit, which acts as your credit limit for that specific card. That means you can’t spend what you haven’t already handed over as collateral. This requires you to be vigilant about using credit, and it also puts lenders at less risk.

Using a secured credit card responsibly can be a great method for repairing your credit steadily, especially after a financial setback like identity theft and resulting (or even ongoing) credit damage.

9. Continue monitoring your credit

If you’re actively trying to repair your credit after identity theft, check your credit score regularly. Not only is it good for monitoring the progress of your restored credit health, it’s a way to catch new fraud. You can obtain free weekly reports from AnnualCreditReport.com.

A dedicated service for identity theft detection and credit monitoring can also help monitor your credit on an ongoing basis. You can keep monthly track of your credit score from one bureau (or annually from all three bureaus), and watch your credit repair attempts pay off.

How long does it take to rebuild credit after identity theft?

How long it takes to fix your credit after identity theft depends on the extent of the identity fraud and how quickly you detect and report it. Quick reporting and disputing of a few unauthorized charges may resolve in 3–6 months, whereas multiple fraudulent accounts and incidents may draw things out for a year or more, as each dispute is treated as a separate case. A single credit dispute usually takes around a month to resolve.

Is using a credit repair service worth it?

In most cases, everything a credit repair service does, you can do yourself for free — for simple disputes or errors, hiring a company to repair your credit isn’t worth it. Sometimes, paying a credit repair service can be worth it, but only if you prefer to pay someone trustworthy to handle a complicated case of identity theft-related credit damage, rather than handling the paperwork yourself.

Before you hire a credit repair service, consider whether the actions they promise to take are actually legal. For instance, if they ask for a fee upfront, they’re already breaking the law, and they may even mislead you about how credit scores work, damaging your credit further.

Shop for help with a critical mindset, as there are some credit repair organizations that overpromise results, often through illegal means, or are scammers out to get your money or personal information. Here’s how to tell if the credit repair company you’re looking at is real or a scam:

Tips for protecting your credit and identity from criminals

To protect your identity, credit, and information from online criminals, don’t click links in strange emails, learn how to spot signs of phishing, always use a credit card online (instead of a debit card), use strong passwords, and request credit reports regularly to keep an eye on your overall credit health.

Here are more ways you can protect your identity online and possibly even prevent identity theft:

• Sign up for identity theft protection: Identity protection services help streamline credit score monitoring and alert you if unusual activity is detected involving your personal data, like a strange transaction, or your information showing up on the dark web.
• Freeze your credit preemptively: A credit freeze is an extra level of protection that can help proactively protect against identity theft by restricting access to your credit report (even by you).
• Request credit reports regularly: Learn how to look out for the signs of identity theft on your credit report, like unfamiliar accounts and transactions in accounts you don’t use anymore.
• Monitor your credit card transactions: Catch unauthorized charges early by reviewing transactions and setting up alerts for unusual spending activity.
• Don’t overshare online: Avoid posting personally identifiable information, such as phone numbers, email addresses, full names, birthdays, family names, or current locations on public accounts. This info can be used to build an identity file on you, which criminals can then use to aid their identity theft schemes or launch social engineering attacks against you.
• Follow cybersecurity best practices: Use strong, unique passwords for every account, enable two-factor authentication, and update devices regularly to patch software vulnerabilities.
• Learn how to spot a phishing attack: Phishing is when you’re sent dangerous links and requests for information in fake emails disguised as real services. If you have a notification from PayPal, for example, don’t click the link in an email; go to paypal.com manually. Better to be safe than sorry.

Help protect your identity with LifeLock

With a credit monitoring service like LifeLock Advanced, you gain valuable tools in the fight against identity theft, such as regular credit monitoring and alerts for suspicious financial charges and usage of your personal information. These features can help you take action before your credit tanks as a result of identity theft.

And with the Restoration Guarantee, if we can’t reinstate your identity to good standing after you fall victim to identity theft, you’ll get your money back. Sign up today for a 60-day money back guarantee.

FAQs

What evidence should I gather before reporting identity theft to authorities?

Before reporting identity theft, or attempting identity theft credit repair, gather copies of credit reports showing fraudulent accounts, bank statements with unauthorized charges, emails from creditors, and proof of other fraudulent or suspicious transactions. Keep photo IDs and proof of address handy to verify your identity.

Can identity theft be removed from your credit report?

Yes, you may be able to fully recover from identity theft, even on your credit report. It may take some time, but credit bureaus can remove fraudulent accounts, inquiries, or fraudulent negative marks from your credit report. You’ll need an official Identity Theft Report from the FTC to do it.

Are there any legal protections for victims of identity theft under federal law?

Yes, you’ve got the law on your side. Federal laws like the Fair Credit Reporting Act (FCRA) and the Identity Theft and Assumption Deterrence Act protect victims by allowing them to dispute fraudulent information. Navigating these laws can be difficult, but an identity restoration service can provide invaluable guidance.

What are the most common types of identity theft that affect credit?

The most common types of identity theft that hurt your credit include credit card fraud, new account fraud, loan scams, employment fraud, account takeovers, and benefit or medical fraud. These happen when someone uses your personal information to open accounts, take out loans, or make purchases in your name.