The Impact of Identity Theft on Your Credit Score
If you’re like most people, your credit score is important to you. It impacts your ability to get loans, credit cards, and even find a decent place to live. But one little mistake could send your numbers plummeting, especially if you become a victim of identity theft.
As if the financial loss wasn’t enough, repairing a damaged credit score after identity theft can drain you of your time and energy as you rebuild your good standing—kicking you while you’re already down.
But don’t worry. In this blog post, our identity theft attorneys will break down everything you need to know about the impact of identity theft on your credit score and how you can get your numbers back up.
Read on or contact us today to discuss your case one-on-one.
What is Identity Theft?
Identity theft happens when someone steals information, like your name, social security number, or banking information, and uses it to commit fraud. This can include opening credit accounts, taking out loans, or even applying for a job in your name.
It can strike anyone, anytime, and in numerous ways, from stealing mail to phishing scams or using skimming devices to steal credit card information. Regardless of how it happens, the consequences are often the same: financial loss, a damaged credit score, and a tarnished reputation.
How Identity Theft Affects Your Credit Report
One of the most significant impacts of identity theft is the damage it can do to your credit score. Credit bureaus use your credit score to evaluate your creditworthiness and determine the interest rate you’ll pay on loans and credit cards. When someone steals your identity, they can open new accounts, run up debt, and miss payments, negatively affecting your credit score.
Here are a few ways identity theft can show up on your credit report.
New Accounts Opened in Your Name
When an identity thief opens a new account in your name, the new account will appear on your credit report and be factored into your overall credit age history, which is a key factor in determining your credit score. Additionally, when they don’t make payments on the account, this leads to missed payments and further damage your score.
Increased Credit Utilization Ratio
Your credit utilization refers to the percentage of available credit you’re using at any given time (think: credit card balances, line of credit, etc.), another factor for your credit score. If an identity thief opens new accounts in your name and uses them to make purchases, it can increase your credit utilization ratio. This is because your available credit will decrease while your overall debt will increase, leading to a higher utilization ratio.
Inquiries on Your Credit Report
When an identity thief applies for credit in your name, it can result in inquiries on your credit report. These inquiries can remain on your credit report for up to two years and can negatively impact your credit score, especially if there are multiple inquiries in a short period.
By understanding how identity theft can affect your credit report, you can take steps to protect yourself and your credit score. And if you do fall victim to identity theft, our identity theft attorneys at Ware Law Firm are here to help you navigate the legal system and seek compensation for any damages caused.
What to Do When Your Credit Score is Impacted by Identity Theft
If you’ve already fallen victim to identity theft and your credit score has been impacted, don’t panic. Instead, take the following five steps to start repairing the damage and protecting your credit:
- Contact your creditors — As soon as you notice suspicious activity on your credit report, contact your creditors and inform them of the situation. They can help you close fraudulent accounts and dispute any unauthorized charges.
- Place a fraud alert on your credit report — Contact one of the three major credit bureaus (Equifax, Experian, or TransUnion) to place a fraud alert on your credit report. This will require lenders to verify your identity before issuing credit in your name.
- File a report with the FTC — Report the identity theft to the Federal Trade Commission (FTC) by filling out an identity theft affidavit. This will help you create a paper trail of the fraud and can be useful in disputing fraudulent charges.
- Update your passwords — Change your passwords and security questions on all your accounts to prevent further unauthorized access. Consider using a password manager to generate unique passwords for each account.
- Contact an identity theft lawyer— If you’re struggling to dispute fraudulent charges or repair your credit score, consider contacting an identity theft lawyer. They can help you navigate the legal process and protect your rights.
Identity theft can devastate your credit score, but there’s still a way forward. By following these tips, you can begin to move forward.
Protect Your Credit Score With Ware Law Firm
At Ware Law Firm, we understand the impact of identity theft on your financial well-being, and we’re here to help.
Our team of experienced identity theft lawyers can assist you in protecting your credit score and seeking justice for any damages caused by identity theft. We’ll work with you to review your credit report, dispute any fraudulent accounts or inquiries, and hold any responsible parties accountable.
Don’t let identity theft ruin your credit score and financial stability. Contact us today to schedule a consultation. Let us help you protect your credit score and financial future.