Ways Identity Theft Can Ruin Your Credit Score
Identity theft is one of the riskiest crimes globally. It has adversely affected American consumers by ruining their credit reports and reducing their credit scores. Most fraudsters use your identity to apply for new credit, max out your credit card, and default on payments.
The increase in debts associated with fraudsters' activities could lower your credit score by 100 points. This can significantly disadvantage you when seeking loans or a mortgage. You should report your case immediately to the FTC and request a fraud alert on your credit report to protect your credit score. You should also report your identity theft to other relevant authorities and institutions, especially your employer, the police, and the IRS, to protect your credit report.
The procedures are lengthy and time-consuming as you are forced to move from one office to another. DoNotPay can help you file reports and disputes to secure your credit score through its Identity Theft product. You follow the simple steps on the Identity Theft tab, and DoNotPay will reach out to relevant agencies and authorities to secure your personal information and credit score on your behalf.
Different Ways Fraudsters Can Ruin Your Credit Score Through Identity Theft
The following factors scale down your credit score in cases of identity theft:
|Payment history||Fraudsters ruin your payment history by taking debts under your name and defaulting on payments. Payments that are 30 days past due can reduce your credit score by 100 points or more. The more defaulted payments you have, the more damage they have on your credit score.|
|Credit Utilization||Identity thieves can run up your credit utilization beyond the recommended level of 30%. The higher the credit utilization, the lower the credit score. However, it is easy to recover your credit utilization after fraudulent transactions are removed from your credit report.|
|Credit Inquiries||Fraudsters ruin your credit score by opening several credit lines with your information. This causes several hard credit inquiries on your credit report within a short period. This has detrimental effects on your credit score as hard credit inquiries remain on your credit report even after fraudulent accounts under your name have been deactivated. You must dispute the credit inquiries with credit bureaus to remove them from your credit report.|
Essential Steps You Should Take If You Suspect Your Identity Is Stolen
It is essential to check whether you are an identity theft victim to prevent fraudsters from ruining your credit score. Take the following steps if you are a victim of identity theft:
- Review your updated credit report – This allows you to note all accounts opened fraudulently under your name.
- Contact all fraud departments of the banks and financial institutions where malicious accounts have been opened and inform them you are a victim of identity theft. Request them to freeze or close the accounts.
- Change the pins and passwords of all your existing accounts
- Apply for a fraud alert or freeze on your credit report – Doing so makes it impossible for creditors to access your credit report. They cannot issue any credit under your name without your credit report. Credit bureaus give you a PIN you can use to deactivate the freeze if you want to seek credit.
- Create an Identity Affidavit by reporting your case to the FTC Online.
Resolving Your Credit Score by Yourself After an Identity Theft
Resolving identity theft cases is a painful and daunting journey, especially when your credit score has already been ruined. You need to report to several agencies and authorities to withdraw fraudulent transactions and deactivate malicious accounts. You also have to dispute fraudulent transactions with credit bureaus. You can involve experienced and trusted third parties to help you resolve your identity theft issue, especially where your credit score is involved.
Securing Your Credit Score After an Identity Theft Using DoNotPay
DoNotPay can help you secure your personal information after an identity theft to prevent fraudsters from using your information to ruin your credit score. DoNotPay secures your personal information by reporting your case to the relevant authorities, especially the U.S. Department of Justice's National Center for Disaster Fraud (NCDF), IRS, Credit Bureaus such as;
As a result, it lightens your load of filing reports and disputes to all these agencies to report the fraud.
Follow the procedures below to secure your credit score using DoNotPay:
- Search "identity theft" on DoNotPay and select the type of incident you would like to report.
- Tell us more about the incident that occurred, including the location, date, time, financial loss, and any suspect information you may have.
- We'll identify whether you should file an FTC report, contact the IRS, freeze your credit report, contact state agencies, or file a police report. Once we guide you through the best options, we'll automatically submit the reports on your behalf!
Other Social and Legal Problems DoNotPay Can Help You Fix
DoNotPay helps you address other pressing issues you might be experiencing. Some of the issues include:
- Appealing parking tickets
- Breach of contract
- Canceling timeshares
- Analyzing TOS
- Car lease negotiations
- Cleaning credit Reports