Having your identity stolen can be devastating, especially when the thief racks up thousands of dollars of debt in your name and leaves a trail of unpaid bills that wreck your credit. The only thing worse than the theft itself is finding out that the person behind it all is a close friend or family member. Not only are you stuck trying to figure out how to repair your credit, but you also have to decide whether you want to try to salvage the relationship. If you’ve discovered that someone you trust has been abusing your credit information, you’ve got to have an action plan for dealing with the financial and emotional fallout.
Step 1: Check Your Credit Reports
Identity theft is something that people usually stumble on by accident. You get a phone call from a creditor asking when you’re going to pay your bill, or a notice from a collection agency arrives that you’ve never heard of. If you find yourself in these situations, checking your credit reports is a must to get the full picture on how bad things really are.
When you’re looking over your reports, take note of any accounts you don’t recognize, including the creditor’s name, the account number, the balance and the date it was opened. You should also be carefully checking over the accounts you opened yourself to look for any signs of suspicious or fraudulent activity.
Step 2: Clue in Your Creditors
Once you’ve identified the accounts you believe were opened without your knowledge, the next step is calling up your creditors to close them. This part may be a challenge, since the creditors may not believe your claims of identity theft.
You should be making a note of everyone you speak to and the dates you call, since you may need this information. At this point, you should also ask each reporting bureau to put a fraud alert on your account, which could block the identity thief from adding any new accounts or debt.
Step 3: Consider Creating an Identity Theft Report
Having an identity theft report on file with the Federal Trade Commission can help you later on if you run into trouble disputing fraudulent debts or heading off collection actions from creditors. The first step in creating a report is filing an identity theft affidavit. This is a detailed explanation of what’s happening with your credit and what you’ve done so far to deal with the situation.
The second step is usually the most difficult when your identity thief is a relative or friend. You’ll have to file a police report, which means the person who’s been using your information fraudulently may face criminal charges for what they’ve done. In some cases, the creditors involved may continue to hold you responsible for the debt if you haven’t filed a police report.
At this stage of the game, you have to be clear on what can happen if you do file the report and if you don’t. If you’ve confronted the person who stole your identity and they’ve denied the situation, filing a police report may be your only recourse for dealing with the debt. On the other hand, if they’ve expressed remorse and have made a genuine effort to help you with the resolving the issue, you may not be as quick to pull the trigger.
Step 4: Work on Repairing Your Credit
Getting your credit back in order after identity theft occurs can be a monumental task, and it may be months or even years before you start to see any signs of recovery. Disputing the fraudulent accounts with the credit bureaus is a step in the right direction, but you should be prepared to provide evidence to prove that you weren’t the one who opened them.
You should also focus on keeping all your other accounts in good standing, since a solid payment history can help to minimize the impact of negative marks. Paying your bills on time, limiting your applications for new credit and keeping your balances low all work in your score’s favor.
Step 5: Protect Your Information Going Forward
If you’ve been able to make amends with your loved one, it doesn’t mean you can afford to take any chances with your information going forward. Keeping a close eye on your mail, shredding documents that contain financial information and limiting their access to your personal effects are some of the precautions you should consider taking to avoid having your identity stolen again.
In more extreme cases of identity theft, you may feel it’s necessary to initiate a credit freeze or apply for a new Social Security number. A new number can give you some peace of mind, but it won’t make your existing credit file go away and it can cause complications when it comes to things like filing your taxes or collecting on Social Security benefits down the line. Putting a freeze on your credit prevents new accounts from being opened and it’s generally a less complicated solution for combating identity theft.
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