If you have been a victim of identity theft you are the victim of a crime. That’s a criminal matter to be handled by the police. But as a result of the identity theft, you could be left with damaged credit. How bad the damage will be will depend upon how extensively the thief used your identity in order to obtain credit and other benefits. Sadly, it can take years to repair the damage done by identity theft.
Here are some of the obstacles you can expect to face.
Creditors Will Be Less Than Sympathetic
Identity thieves often establish new credit using your identity. What they will often do is open up multiple credit accounts in your name, run up the balances either through major purchases or cash advances, and then leave the mess for you to clean up.
They may even engage in more specific activities, such as using your identity to file for a fraudulent income tax return, or participate in a mortgage scheme that enables them to run off with large amounts of money after the closing.
What complicates these situations is that you are often unaware that they are taking place until well after the fact. Unless you are monitoring your credit report continuously, it may be months before you are aware that something happened. You may even find out as a result of receiving a collection call from one of the ill-gotten creditors.
It would be nice if you could explain to the lenders that the whole thing was a big mistake, that you are the victim of identity theft, and that you are in no way connected with the obligations that were fraudulently obtained using your identity. Unfortunately, that’s not how it works.
Creditors Will Hold You Accountable for Identity Theft Debts
This is when it’s important to remember that creditors are also victims in an identity theft situation. They have extended credit to a bogus party, and are now facing the possibility of never being repaid. Their only recourse is to take action against you.
Even though you are also a victim – and actually the prime victim – in the theft, creditors will generally show little sympathy. At least in the beginning, they may go after you as though it were a normal collection situation, in which you simply refuse to pay a lawful obligation.
It can take many months to straighten this kind of situation out. You will need to clearly establish with each creditor that you were in fact a victim of identity theft, and that you never authorized the application for credit in your name. Some creditors will be more cooperative in this regard than others.
It’s also important to realize that this is not a situation where you’ll have some sort of buyers protection due to the identity theft. That only applies when a thief attempts to use a credit line or account that you have legitimately established in your own name. Generally, if you contact a creditor about a fraudulent or unauthorized charge within a certain amount of time, the lender will protect you against the obligation.
But in a case of true identity theft, you will not even be aware of the existence of the accounts, and in no position to minimize the damage early.
The Damage May Cover Multiple Accounts
Most likely an identity thief will open up not one, but multiple credit accounts in your name. The idea will be to maximize the amount of merchandise or cash that can be obtained from a single theft. That means that you will be dealing with open and unpaid balances on several accounts.
Even if the creditors later acknowledge the identity theft, they will likely continue to report a pattern of progressive late payments, as well as unpaid balances. Though you may be able to work out settlements with some creditors, not all will be cooperative. After all, they are trying to minimize the damage on their end too.
You May Need to Completely Rebuild Your Credit Profile
One of the real problems with identity theft is that even if you are able to ultimately fix the problem, it can take years to untangle completely. Along the way, your credit report will look like a complete disaster. It will be filled with a history of late payments and unpaid balances – many of them for very large amounts – spread out over several accounts.
This will make it virtually impossible for you to apply for new credit, get a job, obtain a mortgage, or buy an insurance policy. Every company or lender that looks at your credit report will see a bad risk. That information can stay on your credit report for years, and in that time you will be denied the opportunity to live your life normally.
For this reason, it’s very important that you repair the identity theft damage as soon as possible after the theft has been identified.
Unfortunately, that’s anything but easy. You will have to clean up all of the damaged accounts that resulted from the theft, and only then will you be able to rebuild your credit profile.
Repairing Your Credit After Identity Theft is Not a Do-it-Yourself Project
You should be aware that this is not a do-it-yourself project in most cases. There are complications involved with identity theft situations that will be extremely difficult to be fixed by a person who does not have the specific skill and experience required to do so. You will almost certainly need to get professional help with the process.
Because of the complications and legalities involved in an identity theft situation, it will be best to use the services of a law firm. And not just any law firm, but one that specializes in credit repair. Identity theft is a very specific area of credit repair, and one that carries legal implications. You will need to be certain that the various damaged accounts will be repaired and settled in a legally acceptable manner.
It’s also important to understand that having a law firm represent you levels the playing. Creditors will almost certainly be dealing with you through their own legal counsel, and you will need to be prepared to respond in kind.
Make sure that you work to repair the damage done by identity theft aggressively. You will need to move quickly and thoroughly to put the situation behind you as soon as possible. It’s a massive battle, but one that you have no choice but to fight.