How to fix you credit score after identity theft is something that 6% of consumers may had to do since the rise of this type of crime. Increase in identity theft is an unfortunate consequence of technological advancement, and it can wreak havoc on your credit score — but you can minimize the blow.
Monitoring your credit closely may prevent from identity theft altogether. Or if you have the bad luck to fall victim of this crime, some apps offer up to $1 Million identity fraud insurance. So while you work on improving your financial health, you can also feel safe against this crime on the rise.
How to Fix You Credit Score After Identity Theft
If you fall victim to identity fraud, you can take these steps to repair your credit score after identity theft:
1. File an Identity Theft Report
Report the identity theft to the Federal Trade Commission (FTC). Fill out an affidavit, and keep track of the documentation. The FTC will not actively work on your case, but your creditors will almost certainly be more accommodating if you provide official documentation.
Next, contact the police. Law enforcement can help pursue the perpetrator — and provide additional records — while you go about repairing your credit. A police report will also back up your dispute to fix credit score after identity theft.
2. Correct the Errors on your Credit Report
If you notice false information on your credit report, be proactive and reach out to the three credit reporting agencies. Correspondingly, if your FICO score has taken a hit due to identity theft, then disputing the negative information will help you get back on track.
Make sure to place a fraud alert on your credit report, which will let future lenders know they must contact you before they open any new accounts in your name. The alert will initially go into effect for 90 days, but for consumers who can prove that identity theft has occurred, it can be extended for up to seven years.
According to the Fair Credit Reporting Act, you are entitled to an accurate credit report. Part of that responsibility, however, falls on you. Be proactive, and write each of the three credit reporting agencies a letter via certified mail — with “return receipt requested” — to dispute the false information on your report. The FTC has created a template to expedite the process.
In your letter, you can request that the bureaus block the information you are disputing from your credit report. Then, in addition to the letter, make a list of all the fraudulent information on your report, and provide evidence that it is false. You should also include a separate copy of your credit report with those same errors highlighted, as well as copies of your identity theft and police reports. While you may be tempted to file a dispute online, the FTC suggests that you take the time to do it in writing.
3. Contact your Lenders and Financial Institutions
While the credit bureaus will contact the creditors and companies that informed them of the fraudulent information, reaching out to these organizations yourself will speed up the credit repair process and give you a sense of control over your identity theft case. Again, the FTC has created a template for your letter. Make sure to include copies of your identity theft report and additional documentation to get your credit score back on track. Keep records of your communication.
4. Follow up with the Three Credit Reporting Agencies
After 30 days, check in with the credit bureaus. Follow up again after 60 and 90 days to make sure they haven’t placed any additional false information on your credit report. Regular follow-ups will reinforce your commitment to repairing your credit, and show that you care about your score. If you do spot inaccurate information, do not hesitate to call your lenders and ask them to rectify the situation.
Ultimately, after the credit reporting agencies verify your claims, they will remove the fraudulent information from your credit report.
By taking the above steps to recover from identity theft, improving your FICO score is well within reach. But you can always protect yourself against this crime in the first place.
