How to Rebuild Your Credit After Identity Theft

Written By Marie Abendroth
Last updated March 3, 2021

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March 3, 2021

Simple. Thrifty. Living.

Even after putting a fraud alert on your account, notifying the FTC, and alerting the companies to all the fraudulent transactions. Identity theft can leave your credit in shambles. Despite being the victim, you still have tons of cleaning up to do to fully repair your credit and offset the damage done to your score. But how are you supposed to go about improving your credit after identity theft? Just follow these steps to get started on the repairs.

Once identity theft occurs, your sensitive info is out there for the long term. This can result in repeated attacks that decimate your credit. Since you cannot do anything to reclaim that info, you must rely on the tools available to you, like an extended fraud alert or credit freeze.

When you set up an extended fraud alert, companies must verify your identity before approving any credit applications under your name. The alert stays on record for seven years. Hopefully to outlive the thieves’ attempts to open accounts and ruin your credit.

A credit freeze is much more drastic since it stops all attempts to access your credit report. Once that’s done, not even you will have the ability to open new credit accounts. If you want to apply for a job or apartment, you’ll have to lift the freeze to allow them to take a look.

With an extended fraud alert or credit freeze in place, you can start repairing the damage to your credit report. Either way, you can still order your free credit report from TransUnion, Equifax, and Experian.

Before you do that, set up a secure file for all your documents. As you draw up personalized letters for each creditor, you’ll want to sock away copies for your records.

Also, file away the reports sent to you by the credit reporting agencies that let you know they removed the errors. If any of those entries return, you can just grab your paperwork and send it to the credit reporting agency for prompt removal.

You’ll want to put a copy of your credit report in the file as well. As you move through the credit repair process, reviewing the old reports can help you keep track of your progress.

After you have all three of your credit reports from each agency, sit down with a highlighter and start marking all the suspicious charges. For each of those entries, write up a personalized dispute letter informing them about identity theft.

Also, include a copy of the relevant credit report page and your report to the FTC. If you have any other documentation, like a local police report, include a copy of that as well. Make copies of all these documents for yourself, too, and then put them in your secure file.

Send out each dispute letter to the credit reporting agency by certified mail. Use the tracking number on the receipt to verify that the agency received each letter. Then, staple the receipt to the rest of the paperwork in your file. Repeat this process for every erroneous entry on each report.

Upon receiving your dispute letters, the credit reporting agencies have 30 days to complete their investigation. If they have any questions during that process, they may contact you by phone or mail. Either way, keep a record of the conversation, including who you talked to and when.

Once their investigation is complete, they will send you a report with their findings. Hopefully they remove the entries. If they don’t, you may have to repeat your request with additional proof of identity theft.

After sending in all your dispute letters, it’s just a matter of waiting for the agencies to complete their investigations and remove the entries. The removal of each one will help bring your score up to where it was before the identity theft occurred.

While you wait, you can lift your score even more by using good credit habits, like:

· Regularly using your credit cards and paying them off

· Keeping a low balance on your credit cards—or better yet, paying them off in full each month

· Making all your recurrent and on-time payments in full well before they are due

· Maintaining open credit accounts and keeping them in good standing

It’s also possible to prevent financial disaster by building up a substantial emergency fund of at least $1,000. That way, you don’t have to run up your credit cards or take out potentially risky loans to cover unexpected expenses.

If you can’t seem to get a handle on your credit score, you can get the help you need from credit repair companies. They can help you eliminate incorrect entries on your credit report and restore your score to previous levels.

Many also offer credit monitoring services that watch for identity theft signs and let you know about any potential problems right away. They may even provide helpful personal finance tools to maximize your income and build your net worth.

Regardless if you work with a credit repair company, you need to watch your credit reports for suspicious activity. You can pull your report from each agency once per year, so stagger your requests for a nearly quarterly look at your data. With that info in hand, it’s possible to respond to any charges that are not yours, which can help reduce the damage caused by errors and identity theft.

As you move through all these steps, your efforts will help resolve the damage caused by identity theft. Since it can take a long time to fix, it’s essential to trust the process and keep moving forward. With time, you’ll get your credit score back to previous levels, if not better.

About the Author

Marie Abendroth

Marie is a skilled content strategist and SEO copywriter with a focus on helping people improve their personal finances and overcome their barriers to success. In her articles, she aims to provide up-to-date info that can help everyone better understand how to invest in a better future.  

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