How to Recover After Identity Theft

Mitigate the Damage and Repair Your Credit

The unthinkable has happened. You've just learned that your identity was stolen. Now what?

First off, take a deep breath and tell yourself not to panic. Panic is your worst enemy in any situation because it increases your stress and fuels irrational thinking. Instead, try to remain calm and stay focused on what you can do to improve your situation.

Yes, it could take a long time before everything is back to normal, but things will get back to normal as long as you follow the correct steps. Here are actions you can take to help you regain control of your identity.

Contact the Federal Trade Commission (FTC)

A worried man on the phone reporting identity theft to the FTC
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Discovering that your identity was stolen is both shocking and scary. The fact of knowing your identity was stolen is shocking enough, but many people receive an extra shock because they don't catch it until after the damage has been done. You may not discover the identity fraud until you receive a tax bill, have a mortgage application denied, or get arrested for something you didn't do.

One key to recovering from identity theft quickly is to act quickly. Reporting the theft to the right agencies is critical. The Federal Trade Commission (FTC) Identify Theft Bureau should be the first agency you contact.

Monitor Your Credit Report and Financial Accounts

A credit report being monitored after fraudulent activity shows it has changed to poor.
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When your identity is stolen, you can expect that your credit has likely been compromised. The thief may have opened multiple credit cards in your name and maxed them all out. As a result, your credit report may now reflect problems you didn't create, and that may cause serious issues down the line. Instead of waiting to see what happens, you can begin monitoring your credit report and managing any financial damage that has been done. Take diligent notes as you contact credit bureaus to inform them of the fraud, as well as any mistakes you find in your credit report.

You should also take this step with your financial institutions, especially any card issuers you may have. Let them know what happened so they can be on the alert for any fraudulent activity. Identify any fraudulent charges and note any conversations you have with customer service representatives.

Many victims don't discover identity theft until after the damage has been done, and you will eventually dispute those transactions, but your first step should be stopping any further fraud by getting credit bureaus and financial institutions involved.

Place Fraud Alerts and Security Freezes

A frozen credit card can help stop an identity thief from causing more damage.
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Another way to prevent further fraud is to place a security freeze or fraud alert on your credit profile. A fraud alert is a service that is offered through the credit bureaus. It adds one more layer of protection to your identity. If you (or someone pretending to be you) applies for credit, the creditor will be prompted to verify your identity before extending a line of credit.

security freeze, or credit freeze, is a service that will lock down a person’s credit file so that a lender cannot check their credit. This will prevent criminals from opening new accounts under your name. If you want to open a new account, you can request a temporary lift, apply for the new line of credit, and then let the freeze resume after the application process is finished.

Contact Law Enforcement

Woman reporting identity theft to the police
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After realizing you were the victim of identity fraud, one of your first instincts might be to call the police. Unfortunately, local police rarely have the resources to address cybercrimes such as identity theft.

However, there are situations in which filing a police report with local authorities is useful. For example, if the thief left clues about their identity, you'll want to share that information with the police. If the thief used your identity while being arrested or during a traffic stop, that's another reason to involve law enforcement. In some cases, credit bureaus or financial institutions may request that you file a police report.

When you file an identity theft police report, you will want to provide a lot of specific information. Include any specific dates, transactions, new accounts, or businesses involved in the fraud. Once you have filed an identity theft police report, make sure you receive a copy of it. 

Understand Your Rights and Dispute Fraudulent Activity

Visit the website of the Identity Theft Bureau of the FTC
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Once you've done all you can to prevent future fraud, it's time to start cleaning up whatever mess the fraudster managed to make. Dispute fraudulent transactions, accounts, and claims with the appropriate entities. You have certain rights when it comes to disputing these fraudulent claims, but it helps to act quickly and make firm requests for the fraudulent activity to be wiped from your account.

Even when you're moving quickly and handling everything properly, you'll encounter roadblocks on the way to recovering your identity. Some of those roadblocks can be cleared if you understand your rights as a consumer. The FTC can inform you of your rights.

Visit the website of the Identity Theft Bureau of the FTC, where you will find dozens of resources for identity fraud victims. Among the tools, you'll find sample letters to write, contact information, and much more.

Don't Get Complacent

Be vigilant against future identity theft attacks.
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Some identity theft victims falsely assume that, once they've cleaned up the damage from one identity thief, then the whole ordeal is over. That isn't true. It isn't uncommon for identity thieves to repeatedly strike the same victims. Furthermore, the initial thief may have obtained your information through a widespread data breach, and if that's the case, then chances are good that someone else has your information, as well.

To protect yourself against future identity theft, you need to constantly monitor your credit and be vigilant against future identity theft attacks. That means guarding sensitive paperwork and information, closely tracking your financial accounts, and using tools like security freezes whenever possible.