How to fix your credit score after identity theft

There’s a new victim of identity theft in the US every two seconds. It’s the top complaint received by the Federal Trade Commission. Identity thieves stole at least $52 billion from Americans in 2021, and millions of ID theft cases go unreported.

The bottom line? If you’ve been a victim of identity theft, you’re not alone. You have nothing to be ashamed of–cyber criminals will target anyone, anytime, anywhere.

While ID theft can have devastating effects on your life, it’s important to remember that you can recover. With the right steps, you can repair your credit score and improve your financial health.

To help you get started, we created this guide based on official government sources, the three credit bureaus, the FTC, banks, and other financial institutions.

During our research, we discovered a critical tip that all ID theft victims need to know about rebuilding their credit score.

We recommend reading that and finishing the guide before taking any action. Skipping even one step could lead to further damage to your credit score or slow down the process of repairing your credit.

Let’s dive in.

How to rebuild your credit score after ID theft

There’s no one-size-fits-all answer to this question. The steps you need to take will depend on the type of ID theft you experienced and the damage it caused to your credit score.

For instance, if your identity was stolen and used to open a new credit card, you’ll need to close the account and dispute the charges.

On the other hand, if your identity was stolen and used to take out a loan in your name, you’ll need to work with the lender to remove the loan from your credit report.

In general, however, there are seven steps you need to take to start repairing your credit score after ID theft:

1. Check your credit report for errors

The first step is to get a copy of your credit report from Experian, TransUnion, and Equifax, aka the three major credit bureaus. You can request them for free.

When you review your credit reports, look for any errors or fraudulent activity. Common signs of ID theft include:

  • Unauthorized credit inquiries
  • Accounts you didn’t open
  • Incorrect personal information
  • Credit report activity from unfamiliar places, such as a state you’ve never lived in

If you find any errors on your credit report, you’ll need to file a dispute with the credit immediately.

And when we say “immediately,” we mean the moment you spot even a single suspicious activity.

It can take up to 45 days for a credit bureau to process and resolve a dispute. During that time, the error will remain on your credit report and continue to damage your credit score. So the sooner you start, the better.

2. File a dispute with the credit bureau

If you find errors on your credit report, you need to file a dispute with the credit bureau as soon as possible. Filing a dispute means asking the credit bureau to investigate the error and remove it from your report if they find it inaccurate.

To dispute an error on your credit report, you’ll need to contact the credit bureau directly. You can do this online, over the phone, or by mail. You’ll need to provide the following information:

  • Contact information: Your name, address, and phone number
  • The error you’re disputing and why you believe it’s inaccurate
  • Any documentation you have to support your claim
  • If available, your report confirmation number

Here are complete dispute instructions from, as well as an official template you can use for your dispute letter.

We recommend also sending your dispute by certified mail so you have proof that the credit bureau received your letter.

3. Report the ID theft to the FTC and the police

Once you’ve filed your dispute with the credit bureau, you need to report the ID theft to both the FTC and your local police department.

This accomplishes a few things. First, it creates an official report of the crime, which can be helpful when you’re working with your financial institution or credit bureau.

Secondly, it gives you a chance to get an extended fraud alert placed on your credit report—more on that in step five. Third, the FTC can help you create a recovery plan, which even includes pre-filling identity theft letters and forms for you.

Filing a report with the FTC is free, and you can do it online. You’ll just need to provide some basic information about yourself and the ID theft.

4. Notify relevant financial institutions

Like most Americans, you likely have several financial accounts with different companies. That’s actually a smart way to manage your money and protect your assets.

But in the event of ID theft, it does mean a bit more work for you.

You’ll need to contact each bank or company where you have an account – including credit cards, loans, IRA, and investment accounts – to report the fraud and close any compromised accounts.

Most financial institutions take ID theft seriously and will work with you to secure your accounts, but they may have different procedures for doing so. To make the process as easy as possible, we recommend calling each company’s customer service line.

Make sure to keep a record of all the conversations you have with each company. This will help you keep track of what’s been taken care of and what still needs to be done.

5. Place an extended fraud alert or credit freeze on your credit report

This is the critical tip we mentioned earlier in the article. Why is it so crucial?

Because part of rebuilding your credit score after ID theft is preventing new fraudulent activity from taking place.

Yet too many victims make the mistake of assuming that once they report the ID theft, their credit report is automatically protected.

This isn’t true. In fact, your credit report is still vulnerable to new fraudulent activity – unless you take action to prevent it.

That’s where an extended fraud alert and freezing your credit comes in:

How an extended fraud alert works

Placing an extended fraud alert on your credit report is 100% free and lasts for a year. You can renew it afterward.

When you place an extended fraud alert, businesses must verify your identity before issuing new lines of credit using your info. This makes it much harder for ID thieves to open new accounts in your name.

To place a fraud alert, you’ll need to contact one of the three major credit bureaus. They will then alert the other two bureaus on your behalf.

How a credit freeze works

On the other hand, a credit freeze is a bit more involved, but it’s also more effective.

A credit freeze completely restricts access to your credit report, making it impossible for anyone – including you – to use your credit to open new accounts.

However, you can still open new credit accounts, but you’ll need to request a temporary lift of the freeze first. It also won’t affect your ability to apply for jobs, get insurance, or rent an apartment.

Freezing your credit is a free service, and you’ll need to contact each credit bureau individually to do it.

6. Credit an ID theft and credit score recovery plan

You need to be very aggressive when it comes to rebuilding your credit score after ID theft.

The best way to do this is by creating a credit and ID theft recovery plan. This will help you keep track of what’s been taken care of and what still needs to be done.

Your plan should include the following:

  • A list of all the accounts that have been affected by ID theft
  • A timeline of when each account was opened and when it was closed
  • A list of all the companies you’ve contacted about the ID theft
  • Dates of when you reported the fraud to each company
  • Any reference numbers you were given
  • Notes on each conversation you had with customer service
  • A list of new accounts that have been opened in your name
  • A list of accounts that have been closed or had activity stopped
  • Records of each update or resolution from each company
  • Change all of your passwords, PINs, and security questions

There’s no such thing as overkill when it comes to recovering from ID theft. The more documentation and records you have, the easier it will be to fix your credit and move on with your life.

7. Check your credit report regularly

If your credit score tanked after ID theft, it’s going to take some time to rebuild it. You’ll want to watch your credit report carefully to make sure no new fraudulent activity is taking place.

It will also show you any progress you’re making in repairing your credit (e.g., new accounts being opened, old accounts being closed, your credit score increasing, etc.).

At this point, you may also want to invest in ID theft protection services. They offer advanced features such as:

  • Regular credit report monitoring
  • Dark web monitoring (to see if your personal information is being sold online)
  • Social security number alerts
  • Fraudulent account alerts
  • Credit score monitoring
  • Lost wallet protection
  • Proactively lock accounts
  • ID theft insurance, so you’re reimbursed for any financial losses
  • Identity restoration assistance

You can never be too careful when it comes to ID theft, and while you’ll need to pay for these services, the peace of mind they offer is priceless.

Wrapping it up

The aftermath of ID theft can be a nightmare, but you can still regain control of your credit and your life.

By following the steps outlined here, you can repair the damage and get your credit score back on track. Just remember to be patient – it takes time to rebuild your credit after ID theft, but you will get there.

In the meantime, be alert and always on the lookout for any suspicious activity. If you think you’ve been a victim of ID theft, don’t hesitate to contact the authorities and take action to protect yourself.

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