At Your Personal Finance Tips, we aim to cover all facets of personal finance and credit repair. Identity theft is unfortunately a big topic in the financial world because it can turn your life upside down in a matter of days, ruining your credit and financial health. Many people today ignore the warning signs of identity theft, or don’t even know what to look for.
In 2016, over 15 million cases of identity theft were reported in just the US, and even though years have passed, there’s no sign of the issue losing momentum. Additionally, many people don’t find out their identity has been stolen – if at all – which is why it’s important to monitor for warning signs. To help combat this issue, we’ve taken the initiative to help educate our readers on what to look for and how to recover from identity theft should it happen to them.
We made the decision to open a section on our website about identity theft because we believe knowing what to do in the event of an information breach keeps your identity protected. It may even save your financial life one day. Below you’ll find some of the key components to keeping your identity safe in the case of a breach, and you can find more information in our identity theft blog section.
What Is Identity Theft?
Identity theft seems almost unreal to some people; after all, the idea of stealing someone’s identity may seem theatrical. Unfortunately, in the age of technology, people everywhere are storing information online, using data to identify themselves. Credit card numbers and drivers license numbers can be used to authorize transactions and open accounts, all without the person being physically present.
All this data can be accessed through the businesses you visit and services you sign up for whether it’s online or in-person. Even though cybersecurity efforts are constantly improving, just like a home robbery, a thief can breach this data and steal the information needed to prove your identity. Furthermore, all an identity thief needs do to is copy your information, so it will never go missing.
Since this information is not physically in front of us, it can be hard to realize it’s been stolen. Many people don’t know their identity has been stolen for several years if they find out at all. Many people fail to monitor their credit history or take preventative steps to avoid the theft in the first place – largely because they don’t know how to.
Warning Signs Your Identity May Have Been Stolen
- Bank withdrawals or charges you can’t explain.
- Credit card charges you can’t explain.
- Merchants online or in-person refuse your checks.
- Debt collectors call about debts you aren’t responsible for.
- Unfamiliar accounts appear on your credit report.
- Medical facilities send bills for services you haven’t used.
- Health insurance denies your claims due to your benefits limits.
- Health insurance denies your claims due to medical conditions you don’t have.
- The IRS notifies you that more than one tax return has been filed in your name.
- The IRS notifies you of income from an employer you don’t work for.
- You receive a notification from a service or company you use stating they have had an information or data breach.
- Your wallet, social security number, ID card, credit card, debit card, or any other sensitive information has been lost or stolen.
Can Identity Theft Affect Your Credit?
Many people think about identity theft affecting their personal finances, but it doesn’t stop at the numbers in your bank account.
Identity theft can affect your credit score. Fraudulent accounts in your credit history can cause your credit score to plummet. A lower score will prevent you from getting approved for loans and credit cards and may even raise your current interest rates.
The good news is, by promptly taking the right steps, you can prevent it from adversely affecting your credit score and personal finance. At Your Personal Finance Tips, we do our best to help educate you on the warning signs of identity theft and teach you the right steps to take if your identity has been stolen – and what you can to do prevent it in the first place.
How to Fix Your Credit After Identity Theft
File A Report
The first thing you’ll want to do if you suspect your identity has been stolen is to file a police report. In your report, provide all the information which led you to believe your identity may have been stolen.
Secondly, you’ll want to report the issue to your bank and credit card lenders. Alerting them to possible fraud attempts helps you minimize the financial troubles of identity theft should your bank account be compromised. While different banks have different terms and policies regarding identity theft, many have a timeframe in which you’re required report identity theft to minimize your financial liability.
It’s also important to file a fraud alert with all credit bureaus and credit reporting agencies. This fraud alert tells credit agencies and bureaus they should keep an eye on your credit history and potentially even freeze your credit history from being distributed to creditors. This fraud alert can last up to 90 days and is a good precaution if you think you may be at risk of identity theft. If you’ve confirmed your identity has been stolen, you can place a more permanent fraud alert that can last up to seven years.
The next step is to file a report with your utility companies. This will alert them to block any attempt if someone else tries to open an account using your information, and you can change any information on file if necessary.
You can also file a report with the FTC, or the Federal Trade Commission, for additional investigation beyond your police report. Filing both may help connect the dots in cases of larger identity theft rings or high-profile cases.
Dispute Fraudulent Activity
Check your credit reports from all credit bureaus thoroughly.
If you’re taking steps towards identity theft recovery, then after filing reports with all appropriate agencies, the next step is to dispute fraudulent charges and activity.
Be sure to check your reports from all credit bureaus thoroughly. If you find any fraudulent or unusual activity on your credit report, be sure to file a dispute with the credit bureau and get the charges taken off. If you haven’t filed a fraud alert, now is the time to do it.
Freeze your credit reports.
One of the most important things you can do in identity theft recovery is to look over your credit report. If you see any fraudulent, you can order a freeze to be put on your credit report. You’ll need to do this for each credit bureau separately. This may cost money depending on the state you live in, but if you can prove you’re a victim of identity theft the bureau may provide the freeze for free. A credit freeze prevents your credit report from being released to new creditors. This puts your credit report on a complete lockdown.
Dispute Charges with Your Bank
Contacting your financial institution should be one of the first things you do after filing a police report. Typically, banks have a timeframe in which you can report fraudulent activity, but you may be liable for unauthorized charges if you don’t report the identity theft within that time frame.
With any report or dispute, it’s always important to follow up on the issue. If you’re not sure of the right steps to take or are having trouble getting in contact with certain agencies, an identity theft protection company can help you take back your life.
Secure Your Information
Change All Online Passwords
Changing all online passwords whether the accounts contain sensitive information or not. Avoid using common passwords like a birthday, anniversary, or social security number.
Check with the Social Security Fraud Hotline
By notifying the social security office, you’re putting an identity theft alert out on your name, ensuring retirement funds and other benefits are protected. It’s important to also ask for a copy of your personal earnings and benefits statement to maintain its accuracy. This will prevent any damages showing up later in life should you need to call upon these benefits.
Get a New Driver’s License or State ID
If your license or state ID number is being used by an identity thief, you will want to alert the government and get your number changed. Keep in mind this also means you’ll have to change the number on all paperwork that uses this number. This may include anything you’ve signed such as loans, credit cards, bank accounts, home mortgages, insurance, and travel plans.
Sign Up with an Identity Theft Protection Company
If you’re in the identity theft recovery process or simply want to take preventative action, signing up with an identity theft protection service can help save your identity and your financial life. It’s not uncommon for identity theft victims to have an information breach later; especially if preventative measures aren’t taken.
Signing up with an identity theft protection company can not only help you recover from identity theft but also alert you to many of the warning signs and teach you about good practices. Identity theft protection services can also monitor your information, helping ensure you’re alerted at the first sign of a theft or breach.
At Your Personal Finance Tips, we help you get the most out of your wallet, and that includes keeping it safe. To learn more about identity theft and personal finance, visit our blog. Additionally, those who have been affected by identity theft and are in need of credit repair may want to considering a company to handle the damages. Visit our reviews page for a comprehensive look at many of the top industry names today. Our top-rated company, Lexington Law, does both credit repair and identity theft protection.