What Is Identity Theft?
Identity theft occurs when someone uses your personal information—such as your name, Social Security number, or date of birth—without your permission to open credit cards, obtain loans, or incur debts in your name.
Sometimes the thief is a complete stranger who obtained your information through a data breach, phishing scam, or stolen mail. Other times, it may be someone you know who had access to your personal information.
Regardless of how it happened, the result is often the same: accounts that don’t belong to you begin appearing on your credit reports.
How Identity Theft Affects Your Credit
Fraudulent accounts can damage your credit in several ways.
You may see unfamiliar credit cards, personal loans, collection accounts, hard inquiries, or even addresses where you’ve never lived. As payments are missed, your credit score may fall, making it more difficult to qualify for a mortgage, auto loan, apartment, or even certain jobs.
The frustrating part is that none of this was your fault.
How People Usually Discover Identity Theft
Many identity theft victims don’t realize their information has been stolen until something unexpected happens. Some of the most common ways people discover identity theft include:
- A debt collector calls about a loan or credit card they never opened.
- They are denied credit despite having a strong credit history.
- A credit card company suddenly lowers their credit limit or closes an account without warning.
- They receive bills or collection notices for accounts that don’t belong to them.
- They notice unfamiliar accounts or hard inquiries while reviewing their credit reports.
- Their credit score drops for no obvious reason.
If any of these situations sound familiar, it’s important to obtain and review your credit reports from all three major credit bureaus as soon as possible.
What Should You Do If You Become a Victim of Identity Theft?
If you believe someone has used your identity, acting quickly can help limit the damage and make it easier to correct your credit reports.
Start by taking these important steps:
Place a fraud alert or credit freeze to help prevent additional accounts from being opened in your name.
Report the identity theft to the Federal Trade Commission (FTC) through IdentityTheft.gov. The FTC will help you create an Identity Theft Report, which can be an important part of correcting fraudulent information.
Review your credit reports from Equifax, Experian, and TransUnion to identify every inaccurate account.
Dispute any fraudulent accounts with the credit bureaus and keep copies of everything you send and receive.
Continue monitoring your credit to make sure fraudulent accounts don’t reappear and that no new accounts are opened.
Our Resource Center includes official government resources and practical guides to help you through each of these steps.
Fraud Alert vs. Credit Freeze
Many people confuse fraud alerts and credit freezes, but they serve different purposes.
A fraud alert tells lenders to take additional steps to verify your identity before extending new credit. It’s free to place and can help reduce the risk of additional fraud.
A credit freeze offers even stronger protection by restricting access to your credit file. Because most lenders won’t issue credit without reviewing your credit report, a freeze can make it much more difficult for someone to open new accounts using your personal information.
Neither option removes fraudulent accounts that already appear on your credit report, but both can help prevent additional damage while you work to correct existing errors.
What If the Credit Bureau Doesn’t Remove the Fraudulent Account?
Many consumers assume that once they explain an account is fraudulent, the credit bureau will simply remove it.
Unfortunately, that’s not always what happens.
Sometimes a credit bureau concludes that the account has been “verified” and continues reporting it. In other cases, an account may be removed temporarily only to appear on your credit report again months later.
If you’ve provided documentation showing that the account resulted from identity theft and the inaccurate information remains on your credit report, you may have important rights under the Fair Credit Reporting Act. Depending on the circumstances, you may have legal options if the credit bureau or the company reporting the account failed to conduct a reasonable investigation.
Attorney Insight
One case that has always stayed with me involved a client who had maintained excellent credit her entire life. She wasn’t buying a house or applying for a new loan. Instead, she noticed that her credit card company kept lowering her credit limit until she couldn’t even spend more than about $100 at Target.
When we reviewed her credit reports, we discovered that someone had opened several credit accounts using her name and an address in a state where she had never lived.
She never suspected identity theft. She simply thought something was wrong with her credit card.
That’s why I encourage people to review their credit reports regularly. Identity theft isn’t always obvious, and sometimes the first warning sign is something completely unexpected.
When Should You Contact an Attorney
Identity theft can leave you feeling frustrated and overwhelmed, especially after you’ve done everything you’re supposed to do and inaccurate information still remains on your credit report.
At Shmucher Law, I help Florida consumers understand their rights under the Fair Credit Reporting Act and evaluate whether credit bureaus and information furnishers have met their legal obligations. Every situation is different, but understanding your options is often the first step toward restoring your credit.
If identity theft has damaged your credit and your disputes have not resolved the problem, contact Shmucher Law to discuss your situation.