If your identity is stolen, you may have trouble obtaining credit or getting a good interest rate. Creditors may pursue you for debts you haven't incurred. You may even encounter problems when applying for a job because of fraudulent, negative information that appears on a background check. For all of these reasons, and more, if you become a victim of identity theft, you need to begin working to clear your name immediately. Here are the basic steps to take. (For more, read Identity Theft: How To Avoid It.)
TUTORIAL: Credit Cards
File an Identity Theft Report
Get a physical copy of the report, as you'll need it for later steps in the identity recovery process. Also, get the name of the officer who took the report, the report number and a phone number for follow-up inquiries.
Call Equifax, Experian and TransUnion
These are the three credit bureaus that will use their dedicated fraud reporting phone numbers and automated systems to place a fraud alert on your credit file. A fraud alert notifies the credit agencies that your identity has been compromised. An initial fraud alert lasts for 90 days, and an extended fraud alert lasts for seven years. The initial alert is more appropriate when you aren't yet certain that you're a victim. For example, if your wallet is stolen but fraudulent activity hasn't cropped up yet. The extended alert is more appropriate if you know you've been a victim, because it requires creditors to take extra steps to verify your identity before issuing new credit in your name.
If you want to take an additional step, to protect your identity, place credit freezes on each of your credit reports. A credit freeze prevents new creditors from accessing your credit reports, which should prevent them from issuing new credit. Identity thieves will be locked out, but so will you. You'll have to unfreeze your credit any time you want to apply for new credit. Placing and thawing a credit freeze normally costs money, but in some states this service is free to identity theft victims. (To learn more, check out Pros And Cons Of Credit Monitoring Services.)
Close Affected Accounts
If you've had any sensitive information stolen, close all accounts associated with that information. For example, if your wallet is stolen, immediately close the accounts associated with all the credit cards in your wallet. If information about your checking account was in your wallet, close your checking account, too. If your driver's license was stolen, contact your state's department of motor vehicles to notify them of the theft, and request a new card. If your health insurance card is stolen, notify your insurance provider and request a new policy number to stave off medical ID theft.
Examine Your Credit Reports Carefully
Identity theft victims are entitled to a free copy of each of their credit reports. Request yours when you place the fraud alert. If you find any fraudulent activity, contact the creditors associated with that activity, and ask them to send your application and transaction records, which is your right under section 609e of the Fair Credit Reporting Act. Creditors may require a copy of your police report before turning over this information, and you may have to wait several weeks to receive it, as the credit agencies have up to 20 days to send it to you. Then, provide the evidence of the fraudulent transactions to the police department that took your initial report to help build your case. Also, report the fraudulent accounts to the credit agencies using a correction of errors form. The Fair Credit Reporting Act requires credit bureaus to remove inaccurate, or fraudulent, information from your account.
Finally, send letters to the creditors, associated with the fraudulent activity, notifying them that the accounts are fraudulent, and that you want them blocked from your file. Use form letters ITRC 100-1 and 100-3, available for free, online, from the Identity Theft Recovery Center. (If you would like to learn more about your credit report, see Check Your Credit Report.)
Obtain Letters of Clearance From Each of the Credit Reporting Bureaus
In these letters, the credit bureau acknowledges that an investigation proved that your case was identity theft. These letters will help you if fraudulent accounts resurface on your reports in the future. They will also help you if a collection agency contacts you to pay a debt an identity thief incurred using your information.
Keep a Close Watch on Your Bills and Mail
If your identity is stolen, more than one ill-intentioned person may end up with your data, because thieves sometimes sell stolen information. Even after you clear up the initial problem, a new problem could appear later on.
The Bottom Line
Keep records of all contacts with law enforcement, creditors, credit bureaus and debt collectors. Also, keep copies of all correspondence. Send any mailed correspondence by a traceable method that allows you to confirm and prove delivery. Get detailed, written confirmation of any steps third parties take on your behalf (such as closing fraudulent accounts). Keep receipts for any expenses you incur in the process of clearing your name.
For more information on handling identity theft, visit the Identity Theft Resource Center's website. The ITRC also offers free phone support to identity theft victims. (For more on this topic, read Identity Theft: Who To Call For Help.)
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