Restoring Your Credit After Identity Theft

A stranger could have taken out loans under your name or charged your credit card with debt if you’ve been the victim of identity theft. If this happens, your credit score can drop significantly and you may not be able to get a loan. It can be very difficult and upsetting to see your credit score drop. It may seem impossible to repair your credit, but we are here to tell you that it is possible.  Here’s what to do:

 1. Identity Theft: What Is It, How Can You Avoid It And What To Do If It Happens To You 

Identity theft occurs when someone uses your personal information — such as your name, Social Security number and birthdate. — to pretend to be you and steal your identity.

It is a growing problem in America, and pandemic relief has made it worse. Identity thieves targeted unemployment benefits and relief checks to make it more difficult. In 2020, the theft of benefits was 2,920% higher than in 2019. The Federal Trade Commission received 1.4 million consumer complaints about identity theft in 2020. This is a 113% increase over the previous year.

Identity theft occurs when someone uses your sensitive information to pretend to be you or steal from you. Identity thieves can drain your bank accounts and investment accounts, open credit lines, steal your tax refund, steal your utility service, use your insurance information for medical treatment, and give police your address and name when they are arrested.

Your information could already be exposed if there are frequent data breaches. It’s important to take precautions to stop malicious actors from using your personal data and ruining your financial future.

There are 7 types of identity theft:

  • Credit identity theft 
  • Child identity theft 
  • Synthetic identity theft 
  • Taxpayer identity theft 
  • Medical identity theft 
  • Account takeover 
  • Criminal identity theft 

It’s unlikely that you can find an infallible way to stop identity theft. Monitoring services are only able to let you know when something is wrong. There are 11 things you could do to make identity theft more difficult.

Freeze Your Credit  

Credit freeze with all three major credit agencies — Equifax, Experian, and TransUnion — limits access to your records so that new credit files can’t be opened. You can freeze and unfreeze your credit whenever you open an account in Illinois. This provides the best protection against identity thieves using your data to open new accounts.

Protect Your Social Security Number  

Your Social Security Number is your key to all of your personal data. It is your most important asset. Ask for it when you’re asked. Also, inquire about the reasons it is necessary and how it will protect it. Do not carry your card and keep your Social Security number safe.

Watch Out For Spoofing And Phishing  

Scammers may make phone calls that seem to come from government agencies or businesses. Emails that look legitimate could be used to steal your personal information. Instead of responding to an email or calling, initiate a callback. Be wary of attachments, as many can contain malware.

Strong Passwords Are A Must And You Should Add An Authentication Step  

To create and store unique passwords that are complex and unique for your accounts, use a password manager. Don’t reuse passwords. You can lower your risk by installing an authenticator app. You shouldn’t rely solely on security questions to protect your accounts. Your mother’s maiden and pet’s names are easy to find. Be careful about what you share on social networking to ensure you don’t reveal key data or clues regarding how you answered security questions.

Use Alerts  

Many financial institutions send you an email or text message when transactions are made to your accounts. Register to receive notifications by email and text when your credit cards are used.

Keep An Eye On Your Mailbox  

Stolen mail can be a way to steal your identity. If you are out of town, have your mail kept. A U.S. Postal Service-approved lockable mailbox. The USPS also offers Informed Delivery, which allows you to see a preview of your mail and can help you determine if there is anything missing.

Shred, Shred And Shred!  

You should throw out any investment, bank or credit card statements that could be used by someone. You should also get rid of junk mail, especially pre approved credit offers.

Use A Digital Wallet  

Use a digital wallet to pay online or in-store. It is an app that contains digital versions of your credit and debit cards. It can be used to shop online and at compatible checkout terminals. Transactions are encrypted and tokenized, making them more secure. Contactless transactions pose fewer risks to your health.

Protect Your Mobile Devices  

Mobile devices could pose a serious risk. Javelin’s survey shows that only 48% of people lock their mobile phones regularly. Passwords are a must for your electronic devices. Instead of using a mobile browser, use a banking app.

Regularly Check Your Credit Reports  

All three major credit reporting agencies offer consumers a free credit report every week until April 20, 2022. You should ensure that accounts in deferment or forbearance are properly reported and you can also lookout for signs of fraud. To receive alerts about any changes, you can sign up for a credit report and score at NerdWallet.

Keep An Eye On Your Financial And Medical Statements  

Pay attention to financial statements. You must be able to recognize each transaction. If you don’t receive a bill, be aware of the due dates. To ensure you are aware of the services offered to protect against fraud in health care, read the “explanation to benefits” statements.

  2. Restore Your Credit And Build Back Your Finances With These Tips 

Rebuilding credit can be harder than starting from scratch. It is your goal to prove to lenders and credit card issuers how likely you are to continue making payments according to the terms of your agreement, despite mistakes you made or natural disasters. It’s crucial to identify your starting point before you can rebuild credit.

  Consider these basic strategies for rebuilding credit:

Track Your Spending To Improve Your Finances  

You may be able to improve your personal spending habits if you don’t know what or where you spend each month. Better money management begins with better spending awareness. You can track spending across categories to see how much you are spending on non-essentials like entertainment and dining. These habits can be analyzed and mapped out to help you make changes.

Pay Your Bills On Time Every Month  

Being punctual with your utility bills like Northshore Gas and electricity is a great way to manage your money. It also helps avoid late fees. An excellent payment record can improve your credit score as well as your interest rates.

Cut Back On Recurring Charges  

Are you paying for services that you do not use? It’s easy for people to forget about monthly streaming subscriptions and mobile apps that charge their bank accounts, even if they don’t use the service often. To save money every month, review your spending on charges such as these and cancel any unnecessary subscriptions.

Build Up Your Savings—Even If It Takes Time  

You can create an emergency fund that you can access in case of unplanned events. Even if your contributions may be small, this fund will help you to avoid potentially dangerous situations such as being forced to borrow money at higher interest rates or finding yourself unable to pay your Illinois residence/business bills. In the event of a job loss, it is advisable to make general savings contributions to increase your financial security.

 Bottom Line 

Keep track of any actions taken by law enforcement or your financial institution. It may take some time to fix the mess. You might want to look into debt consolidation services if you are having financial difficulties.

Murtaza Ali

Murtaza Ali is a digital marketing expert and creative content writer with skills in online writing, blogging, and social media marketing. He likes to share his knowledge with readers in an inspiring and motivational way.

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