Identity theft can negatively affect your credit score, background record, reputation, and your financial present and future. Unfortunately, this can happen to any one of us, and when it does, we want to know that the hours of work we put into fixing the problem will result in a repaired credit score. 

Fortunately, it can. By taking the immediate steps of reporting the theft to the FTC and police and going to your bank to put a freeze on your accounts, you are taking the right steps to repair your credit and get your identity back. When restoring your credit, you must understand that multiple factors go into the makeup of your credit, such as payment history, credit utilization, credit history, and credit inquiries. All these are necessary to assess and rebuild your credit to get it back to where it was. 

Dispute the Distorted Payment History caused by the fraud.

Your payment history makes up around 35% of your credit score. It is entirely dependent on your timeliness in making payments. If you were to miss a payment, you could cause damage to your score, and if they are past 30 days, your score could drop 100 or more points. When your identity is stolen, the thief will not care about paying back what they have spent. 

To repair any payments that were not made because they were made fraudulently, you must dispute them sooner than later. If you catch the card fraud within the same week of it being done, it could still take a handful of weeks to get your credit back where it was, but it will at least be in the repair process. 

Consider Credit Utilizations that are skewed by the fraud.

Your credit utilization makes up around 30% of your credit score. This is determined by your overall debt and the ratio of what you paid off versus the original balance. However, if a thief were to gain control of your accounts, their goal is to spend as much as they can as quickly as possible. This will skew your credit utilization significantly and affect your credit score.

Thankfully, to bring your percentage back to normal levels, you must dispute the fraudulent charges and remove them from your credit history. After this, your numbers should go back to normal. 

Consider Your Credit History Length which is shortened by the fraud.

The length of your credit history determines 15% of your credit score. It gives a clear view of your accounts, how well you pay back debts, and how often you open and close accounts. If your identity is stolen, a thief will open multiple lines of credit in a very short period, negatively impacting your score quickly. 

Again, to repair this along with the rest of your credit score, work to report the fraudulent activity on your accounts and provide evidence that you did not open those accounts. However, this might be more time-consuming as you have to contact all the lenders and inform them of what happened. 

Dispute Credit Inquiries that were not made by you.

Lastly, 10% of your credit score is determined by your credit inquiries. These can either be soft or hard inquiries. Soft credit inquiries include those that you do when you want to check your own score. These do not harm your overall score. Hard inquiries are those done by lenders when you apply for a new line of credit, a car, or a home, and these can affect your credit score. If a thief attempts to open new lines of credit, your score will be hard-checked multiple times. 

You can take action by closing the fraudulent lines of credit and getting them off your record. However, the hard checks will still appear on your credit unless you dispute them further to the main credit bureaus. 

Do Your Due Diligence 

When your identity is stolen, do your due diligence to ensure you take your life back from the thief. Dispute the fraud with your lenders, report the fraud to the FTC and police, and move forward closing accounts and changing any necessary information to keep yourself safe. It could take hundreds of hours to officially get back to where you were before the theft, so ensure you are proactive with your choices afterward. 

Don’t take no for an answer if your credit is not being fixed. Take further action to take your identity back. Contact the team at Stecklein & Rapp today to get your life back.