The numerous instances of data breaches help us understand how our information gets exposed to outsiders. These instances don’t always involve incidents depicting stolen identity. State rules governing identity theft can vary but these instances mostly involve manipulating an individual’s information for financial gain. You must take stern action when you spot any fraudulent charges against any of your credit cards or when someone else tries to open a new account with your name.
While it is scary and overwhelming when you realize you have become a victim, following the below steps is critical to minimize and damage done to your credit.
4 Steps To Follow While Experiencing Identity Theft
#1. Get Your Account Blocked
While checking out a few financial resources, you might find a few easier means to track instances of identity theft. The very first red flag that you see is the occurrence of unauthorized transactions involving a financial account. Such transactions may be identified while checking an account statement or when your bank gets in touch with you.
Once you come across these unauthorized transactions, you’re supposed to get in touch with the financial institution. They can close your account when the charges are disputed. It’s always important for you to look for unauthorized charges in your bank statements and credit card statements.
#2. Look For Unknown Accounts In Your Credit Reports
Your credit report is the ultimate destination for evaluating all risks pertaining to identity theft or credit card fraud. You must seek free copies of your credit report from any of the 3 major credit reporting agencies – TransUnion, Equifax, and Experian. It will help you recognize any account that you may have overlooked.
It is important that you review the report from each credit reporting agencies because not all creditors report to all 3. For example, you might only see a fraudulent account on just one report.
#3. Register Your Complaint With The Federal Trade Commission
An instance of theft can be documented by keeping a record on paper. You may begin by submitting your complaint with the FTC. Apart from the recovery plan, you may even get all fraudulent charges disputed with the help of forms that have already been filled out for future references. You may need to visit the identitytheft.gov website for acquiring more information on this.
#4. Put A Fraud Alert On Your Credit Report
Frauds tend to yield an adverse effect on your credit rating. You might consider requesting the credit bureaus for placing a fraud alert on your account. Fraud alerts tend to last for about 90 days and these alerts keep a track of institutions that access your credit report with the risk of compromising your identity. Creditors are urged to verify all such instances of pulling your credit report and maintain a record of individuals accessing your account. Any of the major credit bureaus are able to provide you with a fraud alert.
You may even consider opting for a credit freeze. You may initiate this in the form of some extra protection, but by doing this you won’t be able to access your credit report any more. Outsiders that request access to your credit report won’t be able to view it either. This in turn, might yield certain advantages or disadvantages for you. While a credit freeze protects your account from being accessed by others, it even poses a challenge for you to open a new credit card or loan. Credit freezes are now being offered for free as per the federal law.
By staying on top of your credit, you ensure that you build credit history and improve your score over time. You also ensure that you catch any fraud early one. Understand that staying on top of your credit and monitoring it won’t stop you from becoming a victim to identity theft. To truly prevent credit fraud, you need to freeze your credit.
Hi, my name is Jon and I run Compounding Pennies. I’ve been interested in personal finance since high school and love writing and talking about it. You can learn more about me in the Authors section of this site.