Dear Credit Karma… Identity Theft Credit Cards

Dear Credit Karma… Identity Theft

11 Apr, 2010 Credit Cards Dear Credit Identity Theft Theft

Dear Credit Karma,
I just found out today that I am a victim of identity theft. I have at least one bad debt incurred by the identity thief on my credit report. How can I find out if this person is still using my I.D.? How can I get this bad debt removed from my report? What will all of this do to my credit score? I look forward to your help.

Identity theft is a terrible crime that causes considerable stress, time, and financial trouble to one in every
twenty Americans a year; but take heart, there are ways for you to fight back if you are a victim as well as preventative measures to make you less vulnerable to identity thieves.

If you’ve already been targeted and had fraud committed on your credit card, bank account, or other financial accounts, take these steps immediately and quickly to minimize damage as much as possible…

First step,you should “freeze” your credit report to act as a roadblock against future identity fraud, and will also protect your credit report if you think there is still fraud being committed in your name. Freezing your credit report locks access to your credit file against anyone trying to open a new account or creditors trying to check your credit report. This is a fairly effective way to reduce risk of identity theft.

DAMAGE CONTROL: Next, obtain a free credit report of the three credit bureaus through AnnualCreditReport.com and track of any and all fraudulent actions done in your name. Stop an identity thief in their tracks by cutting off their resources, i.e. the bank accounts they are opening, cancel or put a stop to your credit cards, challenging any loans they open, etc. Also be sure to contact, 1) Your creditors, lenders, financial institutions 2) Police and government agencies 3) Credit reporting bureaus, filing a formal report about your identity theft situation. Stay on top of cracking down on any fraud they commit and always contest and report. Read more on Balance Track about how to report identity theft.

CONTESTING FRAUDULENT INFORMATION: If you have a bad debt in your name due to identity theft, it is crucial you report this error to all three credit report bureaus. Be sure to dispute the debt, keeping written documentation, and following up after you file the complaint to see if the bad debt was resolved and removed. Also, take the proactive step of putting a fraud alert on your credit file, which will warn issuers that your personal data has been illegally accessed, and thus any new loans or credit lines will require your approval and identity verification. Call a credit reporting bureau and place a 90-day or seven-year fraud alert on your credit file, depending on your situation. Diligently monitor your credit report to catch any additional negative actions, like more debt or fraudulent credit charges, to immediately report to the bureaus.

DAMAGE TO CREDIT SCORE: Until your credit report is cleaned up, identity theft will damage your credit score especially if the identity thief is able to rack up significant charges in your name. However, as you remove these bad debts and cut off any fraudulent accounts, these entries will be wiped off your credit report completely and your credit score should improve. Identity theft may affect your credit right now, but stay strong knowing that this is manageable and your financial life will return to normal in time.

In summary, make sure to keep all your identification and financial documents in a safe and private place, protect your mail by making sure to empty your mailbox often, don’t carry your social security card around, shred credit card/bank account offers and statements, privatize all sensitive personal and financial information, and also check out more ways to safeguard against identity theft.

Submit a question now, and maybe Credit Karma will answer your question on our next Q & A blog post!

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