Are you a victim of identity theft? What to do and how to improve your credit

how to prevent identity theft

Many people fall prey to identity theft. If you have found out that you have become a victim of ID theft, you will have to take the necessary steps.

Identity theft is quite common in present times. It is a situation when a person uses your identity for their own financial gain. They may open a credit account and you may come to know about it much later.

What to do when you come to know about identity theft

You will have to talk to the creditors and let them know that you have been a victim of ID theft. You will then be required to file police complaints regarding the thefts that have occurred. Otherwise, your credit health can be hurt severely.

You should know what to do when you come to know that you’ve been a victim of identity theft and how you can deal with the debt incurred through identity theft. Moreover, to save your credit score, you need to consider some steps once you are the victim of identity theft.

Here you go:

1. Notify the credit bureaus about the fraud

The first and foremost thing you should do when you’re sure that your identity has been stolen is to inform the credit bureaus. Report it to the fraud department of the 3 major credit bureaus namely, Experian, Equifax, and TransUnion. Under the new provisions of the Fair Credit Reporting Act (FCRA, FDCPA), you can place a fraud alert for no more than 90 days. Once you receive the notice of rights from the bureaus, you can ask for a free copy of your credit report along with extending the fraud alert to 7 years.

identity theft

2. Freeze the credit card if you know the person involved in the identity theft

It is not uncommon that a family member (such as your husband or wife) uses your name to open a credit account and you get to know about it when you’re already delinquent on the account. If you don’t want to strain the relationship, then you can pay off the debt and close or freeze your credit account for a certain period.

3. Report the crime to your local police department

Without wasting any time, you should report the crime to the local police or the sheriff’s department. If you live somewhere different from where the crime has been committed, then you need to report it to the two police stations. Try to give as much documented evidence as possible. Make sure fraudulent accounts(s) are listed in the police report and get a copy of them. Takedown the phone number of the investigator so that you can give it to the credit card companies if they require any verification.

4. Report the crime to the Federal Trade Commission 

You should also report the crime to the FTC (Federal Trade Commission) and include the police report number. You can fill out the FTC’s uniform fraud affidavit form available online or the online identity theft complaint form. The FTC doesn’t investigate identity theft cases, but it can share information with investigators throughout the nation who are fighting for it.

preventing identity theft

How to improve your credit after being a victim of identity theft

You may come to know about identity fraud when a debt collector contacts you about an unpaid debt. If you experience such a situation, at first take the name of the collection company along with necessary details and explain it to the collector that you’ve been a victim of identity theft.

To improve your credit after being a victim of identity theft, you will be required to work hard to protect your credit from identity theft. So, what are the necessary steps that you will be required to take to improve your credit?

Here you go:

1. Put a fraud alert on your credit reports

Irrespective of when you come to know about identity theft, you will have to let the credit bureaus and your creditors know that you have been the victim of the theft. The main thing that you will be required to do is put a fraud alert on your credit reports.

You will have to send letters to the credit bureaus and the creditors through certified mail returning a return receipt, regarding the theft. You will have to mention that you are trying to clear off the mess created by the identity thieves and so you too need cooperation from them. You will have to work on disputing the wrong listings on your credit reports. This is going to lower most of the diet levels and thus you may be able to get rid of most of the debt which might have built up due to the theft; if not all.

what is identity theft

2. Contact the creditors

If you can find out that there are any such debts or accounts which you have never opened, you will have to contact those financial institutions. You will have to send them proof of the complaint that you have filed. This will help you prove that you have not incurred these debts and that you have never applied for the account. This further can help you in lowering the amount of your debt as much as possible.

3. Be current on your debt payments

Then, depending on the debts that you have not been able to discharge through disputes, you will be required to work towards paying off the remaining dues. You will now have to prioritize all of your debt payments as per the requirements. This will help you to minimize the debts one after another. You will also be able to improve your credit if you pay off your debts. This is because your payment history accounts for 35% of your credit score.

4. Consider taking out a consolidation loan

If you have other debts to pay off, then you can take out a consolidation loan and replace your multiple bills with a single loan. There are several organizations that offer consolidation loans with suitable terms and conditions.

what to do in identity theft

5. Take out a secured credit card

In addition to this, you can try to take out a secured credit card as these are available easily enough; even if you have bad credit. The secured credit cards have a slightly lower interest rate in comparison to the unsecured credit cards. You can use this secured credit card to buy items as per your requirements. Then, you will have to make the payments on the card within the specified time. This can help you a lot towards bettering your credit with time.

Lastly, from now on you will have to be careful about the people with whom you are sharing your personal information. You will have to keep a close watch on your credit reports and avoid losing your wallet containing cards and any other information to avoid identity theft hassles.

 

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