How to Repair Bad Credit Caused by Identify Theft

More and more people are having their identity - and good credit - stolen by greedy thieves. These thieves steal credit cards, social security cards and drivers licenses in order to steal your money and buy things on YOUR credit.

If you've been a victim of identity theft, you know how hard it is to get your good credit rating back again. Start protecting yourself before it happens to you.

1. Don't carry your social security card with you. Keep it in a safe place in your home or in your bank's safe deposit box.

2. Be careful when you are at your ATM machine. Watch for people who might be looking over your shoulder to see your PIN number.

3. If you and a spouse or significant other break up, change your PIN number and have your credit card company change your account and bank card numbers. Even the nicest people can be tempted!

4. Be sure that online purchases are being made from genuine companies. Don't just give out your credit card number at a site that doesn't look professional. A good practice would be to call those that you are not sure of to see if someone actually answers the telephone.

But, what if you have already become a victim of identity theft? What do you do now?

What you do NOT want to do is tell the credit bureaus. They will put a fraud alert on your report. It is supposed to protect you, but in reality it makes your credit problems worse. You will more than likely be rejected for any future loans or credit. What you do want to do is:

1. Contact current credit card companies to change your account information and credit card numbers. This includes your PIN number, if you have one.

2. Get your credit report from the three credit bureaus frequently and watch for activity that you have not initiated. If you find anything, dispute the claims with the company that has the incorrect charges. Be sure to file a police report! Ask the company to put a "freeze" on this account. This is different than a fraud alert. You will need the police report to have this done. A "freeze" means that someone has stolen (or is trying to steal) your identity; a fraud alert claims that someone (perhaps even yourself) has committed a criminal act with your account.

3. By this time, the credit card company will probably notify the credit bureaus. You will need to send them copies of any police reports to prove that you were a victim of identity theft. This way, even if they put a fraud alert on your credit report, you will have a way to prove that you aren't the "bad" guy here. If you have this information when you want to get a loan, you have a better chance of getting it.

4. Watch your checking and savings accounts for suspicious activity. You might have to cancel your current accounts and open new ones. To be extra safe, open new ones in a different bank.

5. Contact your Social Security Office to make sure no one is claiming benefits under your social security number. Explain to them that you are a victim of identity theft and want to make sure they aren't paying your benefits to someone else.

6. Contact the Identity Theft Clearinghouse and Federal Trade Commission to let them know your identity has been stolen. They have a large datacenter full of the names of identity thieves. The more information that you can provide them, the better they can help you.

Identity theft is becoming a big problem these days. We have to be aware of what is happening with our credit. Check your credit reports frequently to watch for suspicious activity.