You know that panicked feeling? When you grab for your back pocket, thinking your wallet’s missing? Most times, it’s right where it should be—false alarm. But when it’s not there, you intuitively know it’s the start of a miserable process of putting pieces back together. Now, imagine it’s not your wallet missing but your very self. That same panicked feeling sets in, magnified many times over.
Identity theft is an already massive and still-growing problem. So, what should you do if you fall victim to the crime, and how long does it take to repair the damage done to your credit score? Unsurprisingly, like any personal finance issue, much depends on individual circumstances, but there are several things all should know.
While figures vary—as do circumstances—the Federal Trade Commission (FTC) estimates that once you’ve discovered your victimization, the average time you will spend alerting the right people to the problem and taking steps to fix it (or, yikes, fix them) is about six months of your life and 200 hours of labor you will never get back.
During those months, do the following—more or less, in order:
One, file a police report or affidavit stating you believe you are a victim of identity theft or fraud. Be sure to get a copy of all documents you fill out—you may need them later on when you start to deal with issues directly pertaining to your credit score.
Two, obtain copies of your three credit reports from Experian, TransUnion, and Equifax. Sit down and go through those suckers with a fine-toothed comb.
Three, make studious notes of suspicious information you find on any reports, whether you know such information to be the result of fraud or believe it to be.
Four, file disputes on suspected fraudulent items individually and with each of those respective reporting agencies.
Five, follow up with each credit reporting bureau and be sure to record practically everything you have discussed. By law, all disputes to your credit report not deemed to be “frivolous” must be investigated within 30 days by the agencies.
Those are the first five steps—but you’re not done…
Six, notify all three bureaus in writing and ask that your accounts be placed on ‘Fraud Alert’.
Seven, after notifying the bureaus, place a freeze on your accounts. This prevents unauthorized access to, and use of, your credit report information. While state laws on this differ, there are generally two kinds: an ‘initial’ alert or freeze which lasts for 90 days, and an ‘extended’ alert or freeze which lasts for (gulp) seven long years.
During this time, companies with whom you already do business (say, your mortgage lender or the phone company) will still have access to your account, but any new creditor must make a reasonable attempt to contact you and verify your identity before any new credit lines can be extended in your name.
Eight, contact the FTC directly and insist that any fraudulent accounts be forcibly closed immediately. This can, at least, stanch the bleeding being done to your credit report.
Nine, if identity thieves opened new cards, call the card-issuing bank, explain your situation, and ask that they close the account right away. As long as you meet the “burden of proof” with the proper documentation, the bank should remove the activity from your credit report, which will help repair your credit score.
Ten, notify any bill or debt collectors of your pending fraud investigation. This way, you should be able to prevent any worsening of your credit score and any hassles (annoying calls, threatening letters, et al.) that may follow.
Those items on your credit report that you can verify as fraudulent (and successfully dispute) should cease to do damage to your credit score right away, once removed. But even the steps outlined here won’t solve all potential credit report problems.
Illegal credit card activity, for instance, is easier to deal with than fraud involving your Social Security number. With so many ties to those nine, crucial, digits, this kind of fraud can take several years to fight, depending on severity. Even worse, it’s not unheard-of that some people have been arrested for crimes committed by their sneaky ‘doppelgangers’.
Ultimately, the best way to deal with identity theft is not to suffer through it in the first place. Alas, the problem isn’t going away and even if you’re careful with personal information and passwords, no one’s immune. After all, statistics suggest roughly 40 percent of identity theft is perpetrated by someone victims, themselves, know.
So, don’t become a statistic. Remain vigilant and periodically check your free credit reports and scores through Quizzle. This way, should that awful, panicky moment come, you can start getting your life back that much sooner.