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You know that identity theft can impact your credit, but you’re probably thinking, “It’ll never 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 it can still happen yours.
Here are some ways to recover from identity theft and tips on how to avoid becoming a victim in the future.
What to do if you are a victim of identity theft
Finding out that your information has been stolen is a horrible feeling. You probably feel violated and scared. It’s easy to feel overwhelmed and you may not know what to do next. However, it is important to act immediately to prevent the situation from getting worse.
If you think you’ve been a victim of identity theft, follow these five steps:
- Contact the lender or company
- Dispute account
- Place a fraud alert on your credit
- Create an impersonation report
- File a police report
1. Contact the lender or company
If you are contacted by a company saying you are approved for a loan, or notice something about your credit report that does not seem familiar to you, contact them directly. Do not click on a link in an email or give information to a caller; instead find the lender on your own and contact their main customer service department. Otherwise, you might accidentally give information to someone posing as a lender or business.
Explain the call or email you received and didn’t ask for a loan. They will 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 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 should 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 by mail.
3. Place a fraud alert on your credit
If you believe 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 loansor student loans.
When a fraud alert is in effect, lenders will need to take extra steps to verify your identity before approving you for a loan. Fraud alerts remain in place for one year, but can be extended upon request.
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 also request a fraud alert online.
4. Create an impersonation report
If someone uses your information to open a new account or take out loans in your name, file an identity theft report with the Federal Trade Commission (FTC). You can do it online at IdentityTheft.gov.
After you enter your information, the FTC will give you a recovery plan with suggested actions to take. The site will walk you through each step, track your progress, and even pre-fill the necessary forms and letters to lenders for you.
5. File a police report
In most cases, submitting an identity theft alert to the FTC is sufficient. The FTC is a federal law enforcement agency, so you usually don’t have to report it to other authorities.
However, in some cases, you must 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 on your behalf, you should contact the police.
- Creditors require a police report: The FTC Identity Theft Report will be sufficient for most creditors. However, some may require 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 steps you can take.
Here’s how you can stop someone from impersonating you:
- Use a password manager
- Shred all personal documents
- Review your credit report regularly
- Avoid services that offer to help you with your federal loans
1. Use a password manager
Don’t try to find and memorize your own passwords; they are 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, unguessable passwords and store them in an electronic safe for you so you don’t have to remember them or enter them manually.
2. Shred all personal documents
When you receive mail, such as credit card offers, bills, or other documents, be sure to shred them before throwing them in the trash. You want the papers completely destroyed so that no one can go through your trash cans and get your personal information.
3. Regularly review your credit report
It’s a good idea to regularly review your credit report 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 you with your federal loans
When it comes to student loans, you need to take extra steps to protect yourself. Many companies advertise their services, offering to help you with your federal student loans – they might even call you. They may claim they can lower your monthly payments or apply for loan forgiveness on your behalf.
Many of these companies are late student loan scams and charge high fees. And they have access to your personal information.
Take steps to protect yourself
Identity theft is quite common, so it’s essential that you take steps to protect your information and monitor your credit. If your information has been compromised, take action immediately to minimize the impact on your credit and finances.