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You know identity theft can impact your credit, but probably think “That won’t ever happen to me.”
But even if you’re careful with your passwords and can spot a scam email from a mile away, the fact is that it could still happen to you.
Here are some ways to recover from identity theft and tips on how to prevent becoming a victim in the future.
What to do if you’re a victim of identity theft
Finding out that your information has been stolen is a horrible feeling. You likely feel violated and scared. It’s easy to feel overwhelmed and you may not know what to do next. However, it’s important to take action right away to keep the situation from getting worse.
If you think you’re a victim of identity theft, follow these five steps:
- Contact the lender or company
- Dispute the account
- Place a fraud alert on your credit
- Create an identity theft report
- File a police report
1. Contact the lender or company
If you’re contacted by a company saying you’re approved for a loan, or notice something on your credit report that doesn’t look familiar, reach out to them directly. Don’t click a link in an email or give information to a caller; instead, look up the lender on your own and contact their main customer service line. Otherwise, you may accidentally give information away to someone posing as a lender or company.
Explain the call or email you received and that you didn’t apply for a loan. They’ll be able to tell you what you need to do to clear it from your name, such as submitting a copy of an identity theft report and giving you any information on next steps.
2. Dispute the account
If you find that someone has opened an account or taken out a loan in your name, you need to dispute the charges with each of the three credit bureaus. Visit each company’s website to submit a dispute online or to find information on how to dispute a charge through the mail.
3. Place a fraud alert on your credit
If you suspect your information has been compromised, placing a fraud alert on your credit report can make it harder for criminals to open new lines of credit in your name, including credit cards, personal loans, or student loans.
When a fraud alert is in effect, lenders will have to take extra steps to verify your identity before approving you for a loan. Fraud alerts stay in place for one year, but they can be extended if requested.
You don’t have to contact all three credit bureaus; instead, you can contact just one and that company will work with the other two to place a fraud alert on all of your credit reports. You can request a fraud alert online, as well.
- Place a fraud alert with Equifax
- Place a fraud alert with Experian
- Place a fraud alert with TransUnion
4. Create an identity theft report
If someone is using your information to open a new account or take out loans in your name, submit an identity theft report with the Federal Trade Commision (FTC). You can do so online at IdentityTheft.gov.
Once you enter your information, the FTC will give you a recovery plan with suggested steps you should take. The site will walk you through each stage, track your progress, and even pre-fill necessary forms and letters to lenders for you.
5. File a police report
In most cases, submitting an identity theft alert with the FTC is enough. The FTC is a federal law enforcement agency, so you usually don’t have to report it to any other authorities.
However, there are some cases where you should also file a police report with your local law enforcement agency:
- You know the culprit: If you know the identity of the person who stole your information, such as a friend or relative who submitted a loan application in your name, you should contact the police.
- Creditors insist on a police report: The FTC identity theft report will be sufficient for most creditors. However, some may insist on a police report.
How to prevent identity theft
Whether you’ve been a victim of identity theft in the past or just want to protect yourself, there are measures you can take.
Here’s how you can prevent someone from stealing your identity:
- Use a password manager
- Shred any personal documents
- Review your credit report regularly
- Avoid services that offer to help with your federal loans
1. Use a password manager
Don’t try to come up with and remember your own passwords; they’re usually too easy to guess. And, if you write them down so you don’t forget them, someone can access your passwords and log into your accounts.
Instead, use a password manager like LastPass, 1Password, or Zoho Vault. These programs will generate unique, impossible-to-guess passwords, and store them in an electronic vault for you so you don’t have to remember or manually enter them.
2. Shred any personal documents
When you get mail, such as credit card offers, bills, or other documents, make sure you shred them before throwing them in the trash. You want the papers to be completely destroyed so no one can go through your trash and get your personal information.
3. Review your credit report regularly
It’s a good idea to review your credit report regularly to check for errors or unauthorized accounts. You can get a free credit report from each of the three credit bureaus once a year from AnnualCreditReport.com.
4. Avoid services that offer to help with your federal loans
When it comes to student loans, you need to take extra measures to protect yourself. Many companies advertise their services, offering to help with your federal student loans — they might even call you. They may claim they can lower your monthly payments or apply for loan forgiveness in your name.
Many of these companies are behind student loan scams and charge hefty fees. And they have access to your personal information.
But you can do all of the things they promise on your own, like apply for an income-driven repayment plan or Public Service Loan Forgiveness.
Take measures to protect yourself
Identity theft is quite common, so it’s essential that you take measures to protect your information and monitor your credit. If your information has been compromised, take action right away to minimize the impact on your credit and your finances.
