How To Repair Your Credit After Identity Theft (2024)

How Do You Repair Your Credit After Identity Theft?

When Tim received a letter demanding payment for a $20,000 loan, he brushed it off as a phishing scam. But after debt collectors kept calling, he realized the truth: someone had stolen his identity and taken out the loan in his name [*].

Identity thieves are almost always financially motivated — and one of the most damaging things they can do is ruin your credit score. 

Sadly, this type of fraud is on the rise. According to the Federal Trade Commission (FTC) [*]:

In 2022, credit card, bank, and loan fraud were the most-reported types of identity fraud, impacting over 750,000 Americans. 

Repairing your credit after identity theft is a hassle — but it’s not impossible. 

In this guide, we’ll explain what to do when you realize an identity thief has ruined your credit, how to dispute charges and repair your credit score, and whether or not you should use a credit repair agency.

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Before You Do Anything Else: Secure Your Identity

Financial fraud is rarely an isolated event. If you’re the victim of identity theft, there’s a 50% chance that the fraudster who perpetrated the crime will target you again [*]. Until you secure your identity, any work you do to repair your credit could quickly be undone.

You need to act quickly as soon as you see signs your identity was stolen — such as fraudulent charges, accounts, or inquiries on your credit report. Here’s what to do:

• Freeze your credit with all three credit bureaus. A credit freeze blocks anyone from accessing your credit file, making it one of the best methods to prevent scammers from opening new accounts or taking out loans in your name. To freeze your credit, you need to contact each of the three credit bureaus individually: Experian, Equifax, and TransUnion.
• Gather the evidence and documentation. Before you can report fraud to your bank and the relevant law enforcement agencies, you need to gather evidence. Collect any documentation of fraudulent charges, contact information, and written communication that proves fraud occurred and might identify the scammer.
• File an official identity theft report with the Federal Trade Commission (FTC). Filing a report with the FTC gives you an official identity theft affidavit to help dispute charges and repair your credit. Head to IdentityTheft.gov to file a report.
• Contact your bank to change your account and card numbers. If scammers have access to your account numbers or credit card details, you should contact your bank’s fraud department immediately. They will help you secure your accounts and prevent the scammers from regaining access.
• Update your passwords, and enable 2FA on your online accounts. You should use strong and unique passwords for all of your accounts so that if one password gets leaked, your other accounts remain safe. Two-factor authentication (2FA) adds a second layer of security to prevent hackers from gaining access.
• File a police report. After filing a report with the FTC, you may still need to file a police report. Get your FTC report, documentation, and ID together, and consult your local police department.

The bottom line: If identity thieves have damaged your credit, they could continue to target your bank, identity, and online accounts. Aura’s award-winning identity theft protection can help keep you and your finances safe from fraudsters. Try Aura free for 14 days.

How To Repair Your Credit After Identity Theft

Once you’ve secured your identity and financial accounts, it’s time to repair your credit. Unfortunately, negative items on your credit report can take years to go away — unless you legitimately dispute them.

Here’s a step-by-step guide on how to dispute fraudulent items and get your credit rating back on track:

1. Contact your identity theft protection provider (optional)

Dealing with the fallout from identity theft and fraud can take weeks or even months. If you have coverage — either through your home insurance, work benefits, or an identity theft protection company — your first call should be to your identity theft insurance provider. 

For example, Aura’s team of White Glove Fraud Resolution Specialists will walk you through the steps for recovering from fraud. They can even facilitate three-way calls between you and your bank or impacted government agencies, such as the Internal Revenue Service (IRS). In addition, Aura covers each adult member on your plan with a $1 million insurance policy for eligible losses due to identity theft.

Here’s how identity theft protection companies can help you dispute credit fraud:

• Help you gather and check your credit reports for errors. Aura’s Fraud Resolution Specialists will gather your credit reports from all three bureaus and go through them line-by-line to help you identify fraudulent accounts and charges.
• Facilitate three-way calls between you and impacted lenders or agencies. Once you’re ready to dispute fraudulent accounts and charges, Aura can facilitate all of the needed calls to support you along the way.

2. Request your free credit reports, and check for fraud and errors

Removing mistakes and fraudulent information from your credit reports is one of the quickest ways to repair your credit score. However, you’ll need to look for errors across all three of the major credit bureaus.

The good news is that, due to an increase in fraud during the pandemic, every American is entitled to a free credit report from each of the three credit bureaus every week until the end of 2023. Visit AnnualCreditReport.com to download your credit reports.

Here’s how to check your credit report:

• Look for errors in your account details. Errors can indicate identity theft, and they can cause mistakes to be attributed to your file. Ensure that all of your personal details — including your current address, name, and date of birth — are correct. Make sure that there are no new accounts, hard inquiries, or loans that have been made in your name.
• Review your balances and payments. Make sure your information is up to date and accurate. If anything is missing or there are incorrect payments, you may receive a lower credit score than you deserve. Also, ensure that there are no closed accounts — these should not be listed in your credit report.

3. Review bank and credit card statements, as well as public records

Damage to your credit score can spread beyond what’s on your credit report. It’s important to check for other vulnerabilities, such as your bank accounts, credit card statements, and public records. 

Here’s what to look for:

• Check for new bank accounts and credit cards. Fraudsters may have opened several accounts in your name. Double-check that there are no new accounts (or new, unauthorized co-signers on your current accounts) and that no new cards have been taken out in your name. If you find any, contact your financial institution to close those accounts.
• Look for unauthorized transactions. Make sure your bank and credit card statements reflect only your activity — if there are any transactions that you don’t recognize, contact your financial institution immediately.
• Check the public record. Following identity theft, a criminal can do multiple things in your name that might affect your credit report. To make sure that the public record is accurate, check for items like unexplained tax liens or bankruptcies in your name.

4. Send a credit dispute letter to the credit bureaus

Under the Fair Credit Reporting Act (FCRA), you’re entitled to dispute any incorrect information in your credit files [*]. To do so, you’ll need to send a credit dispute letter to each of the major credit bureaus.

A credit dispute letter contains all of the relevant information needed to prove that information in your credit history is either fraudulent or inaccurate.

Feel free to use our free credit dispute letter template. Along with an official letter, you’ll want to provide all of the documentation that you need to prove your case — including your FTC and police reports, dates and information about the fraud, and account information. 

📚 Related: How To Avoid the Credit National Assist Debt Relief Scam →

5. Remove fraudulent hard inquiries from your credit file

If a criminal uses your identity to try to open a new account, take out a loan, or apply for credit, a hard inquiry will appear on your credit report. Hard inquiries can have lingering effects on your credit score for up to a year after they’re made.

Here’s how to remove fraudulent hard inquiries:

• Review your credit report. You can find this information in your credit report under the section entitled “Hard inquiries.” If you see hard inquiries that didn’t result from your own actions, it means a fraudster tried (and may have succeeded) in opening a credit account in your name.
• Contact the lender. You might be able to avoid a formal dispute by contacting the creditor and asking them to remove the hard inquiry.
• Start an official dispute. If the creditor won’t remove the inquiry, you’ll need to dispute it with the credit bureau listed on your credit report. To do so, you’ll need to write an official credit dispute letter as discussed above.

6. Inform any debt collectors that you’re an identity theft victim

Fraudulent debt in your name can have a devastating effect on your credit score. To remedy your credit score, you should ensure that the debt is fraudulent and then contact the debt collector to prove the debt is not yours.

Here’s how to clear fraudulent debts:

• Verify that the debt collector is legitimate. Check that the debt agency is a real company. Keep an eye out for warning signs of a debt collector scam such as repetitive calls and threats, pressure to pay via cryptocurrency, and a refusal to disclose the details of your debt. You can also write a letter requesting proof of the debt.
• Contact the debt collector. Inform the debt collector in writing that the debt isn’t yours. Remember to never agree to pay the debt — this can result in another late payment ending up on your credit report. If the collector or agency continues to harass you, write them a cease-and-desist letter according to these Consumer Financial Protection Bureau (CFPB) templates.

📚 Related: Debt Collector Scams — How To Tell If a Debt Collector Is Legitimate →

7. Dispute any incorrect public records

Errors and negative information recorded in the public record can affect your credit rating as well as your ability to purchase a house. Luckily, it’s fairly easy to correct these errors.

Here’s what to do:

• Collect the relevant information. Print off the public record in question, and prepare a few forms of identification to prove your identity. Bring any relevant documents that demonstrate the truth to compare against inaccurate information in your record.
• Visit your public records clerk. Find your local public records office, and set up an appointment to see the clerk. Explain the issue in detail, and provide the verified information. Once you’ve submitted the information, it may take a few weeks for the changes to be reflected.

8. Update your payment information for any recurring payments

Automatic payments can help your credit score because as long as there’s money in your accounts, you’ll never miss an important due date for a bill. However, if you need to change your account details due to ID theft, your payments won’t go through — which will negatively affect your score.

To avoid this, make sure you update your payment information for all of your important recurring payments (such as utility bills, loans, credit cards, and other debts).

How Long Does It Take To Repair Your Credit After Identity Theft?

How long it takes to repair your credit depends on how badly you were impacted by identity theft.

Not only can negative items take a long time to expire — it can require a significant amount of time and effort to clear your name after fraud has been committed. Altogether, it can take weeks or even months before your credit is fully repaired.

For example, if there are fraudulent accounts or transactions across all three bureaus, you’ll need to send individual dispute letters and follow up with each of them until they are fixed. This can add 2–3 months to your recovery time.

Some other factors that can lengthen the amount of time it takes to repair your credit include:

• If scammers opened new bank accounts or took out loans in your name
• If there are credit card charges that you need to dispute
• If scammers applied for government benefits or loans in your name

Are Credit Repair Agencies Legitimate?

Because of how complicated the credit repair process is, many people turn to credit repair services and agencies for help. But while there are some legitimate companies that can help you repair your credit, many of them are scammers in disguise. 

At best, you’ll be paying for services that you can easily do yourself — and at worst, you’ll be giving sensitive information to a criminal.

Here are the most common signs of a credit score repair scam:

• They charge an upfront fee (this is illegal)
• You’re told not to contact anyone on your own, including credit reporting agencies
• It sounds too good to be true — for example, they promise a much higher credit rating
• They suggest you “piggyback” off a stranger’s credit card account
• They ask you to falsify information or create a new credit identity
• You don’t receive a proper contract for their services

If you notice any of these red flags, steer clear of that credit repair company.

📚 Related: What Is a CPN or Credit Protection Number? (Updated) →

How To Protect Your Identity and Credit From Scammers

• Learn how to spot a phishing attack. Scammers use a vast array of psychological tactics to trick victims into sharing personal information. Learn what a phishing attack looks like so that you never fall prey to these schemes.
• Practice safe browsing habits, and reduce your online footprint. With safe browsing habits, you can avoid traps set by scammers — including dangerous unsecured networks, malware, and fake websites. Improving your cyber hygiene can also help remove your personal information from the web.
• Use a password manager. Password managers help you create, secure, and store all of your unique passwords (without having to worry about remembering them). Aura’s top-rated identity theft protection solution includes a secure password manager with every plan.
• Regularly review your bank and credit card statements. Set a time every month to double-check your accounts for signs of fraud.
• Check to see if your data is circulating on the Dark Web. Use a free Dark Web scanner or invest in a Dark Web monitoring service to inform you when your information — such as your Social Security number (SSN) — is for sale online.
• Keep your devices and software up to date. Updates often patch vulnerabilities that hackers use to infiltrate your devices and software. Enable automatic updates to keep your devices as secure as possible.
• Set up credit monitoring to warn you of future fraud attempts. Credit monitoring actively monitors your credit and provides notifications when any signs of fraud occur, allowing you to act as quickly as possible.
• Consider signing up for identity theft protection. Aura helps keep you and your loved ones safe by alerting you about threats to your identity, SSN, accounts, and more. And if the worst should happen, Aura’s experienced team of U.S.-based White Glove Resolution Specialists will be there to help you get back on your feet.

The Bottom Line: Keep Your Credit Safe From Scammers

Repairing your credit after identity theft is a long and arduous process — and recovering from the damage doesn’t guarantee that you won’t get hit again. For continued peace of mind, consider signing up for Aura’s comprehensive digital security solution.

With Aura, you get the highest-rated identity theft monitoring service — along with the industry’s fastest and most reliable fraud alerts³, easy-to-use Safe Browsing tools, $1 million in insurance coverage for eligible losses due to identity theft, dedicated 24/7 customer support, and much more.

Keep your credit safe from scammers & identity thieves. Try Aura free for 14 days.