Identity theft can take many forms. Thieves can use your name to open credit cards or student loans, potentially ruining your credit history and financial standing.
If you find yourself a victim of identity theft, resolving the issue can be challenging and time-consuming. However, it is possible to restore your situation.
If someone has taken a loan in your name, it is crucial to act quickly to avoid further damage to your credit. Here are the steps you should follow to protect yourself and eliminate the fraudulent accounts.
1. File a police report
Your first step should be to file a police report with your local police department, which may be possible online. Many lenders will require this report to remove fraudulent loans from your credit account. (See also: 9 Signs Your Identity Was Stolen)
2. Contact the lender
If a loan or credit card has been opened in your name, reach out to the lender or credit card company immediately to report the fraudulent account and request its removal from your credit report. Typically, this issue can be resolved quickly for credit cards and personal loans.
However, identity theft involving student loans can have severe repercussions. Non-payment may lead to wage garnishment, license suspension, or the government seizing your tax refund. Thus, it’s essential to halt any fraudulent activity as soon as possible and get the loans discharged promptly.
For student loans, you’ll need to contact the lender that issued the loans and provide a police report. The lender may also require you to complete an identity theft report. While your discharge application is under review, you won’t be responsible for repayments.
The process for private student loans is similar, but each lender will have its own procedure for managing identity theft cases. You will generally need to submit a police report, and the lender will conduct an investigation.
3. Notify the school, if necessary
If student loans were taken out in your name, contact the school used by the thief to obtain the loans. Reach out to their financial aid or registrar’s office to explain the situation; they can flag the account in their system to prevent further loans being taken out in your name. (See also: How to Protect Your Child From Identity Theft)
4. Dispute the errors with the credit bureaus
When you identify fraudulent activity, dispute the errors with each of the three credit reporting agencies: Experian, Equifax, and TransUnion. Contact each agency and submit evidence, such as your police report or a letter from the lender confirming the identity theft. Once they have this information, they can remove the fraudulent accounts from your credit history.
If your credit score has suffered due to defaults on these loans, having them removed can help restore your score. Recovery may take weeks or months, but your score will eventually return to its previous level. (See also: Don’t Panic: Do This If Your Identity Gets Stolen)
5. Place a fraud alert or freeze on your credit report
As soon as you confirm you are a victim of fraudulent loans, place a fraud alert on your credit report with one of the three credit reporting agencies. This can typically be done online.
A fraud alert notifies potential creditors or lenders running your credit that they should take additional steps to verify your identity before issuing any loans or credit in your name. (See also: How to Get a Free Fraud Alert on Your Credit Report)
In some situations, it may also be advisable to place a freeze on your credit. A credit freeze prevents creditors from accessing your credit report or issuing new credit until the freeze is lifted.
6. Check your credit report regularly
Lastly, regularly check your credit report to ensure no new accounts are opened in your name. You can request a free report from each of the three credit reporting agencies once a year at AnnualCreditReport.com. Staggering these requests every four months can help you monitor account activity throughout the year. (See also: How to Read a Credit Report)
