How to Remove Fraudulent Accounts Found on Your Credit Reports
Last Updated: April 19, 2017
As we all move toward doing just about all of our financial transactions over the Internet, the incidence of identity fraud is increasing. We have all heard the news stories of hackers gaining access to customer data information from big companies such as Target and HomeDepot. We have also heard reports about how a person's information was hacked from their personal computer. Unauthorized access to our personal information leads to identity theft and identity fraud. Once a thief has a few pieces of your personal information, he or she can then open credit accounts in your name. This is a sure fire way to trash your credit and lower your credit score. In this article, we will talk about how to remove any fraudulent accounts that might have been opened in your name and how to repair your credit.
Monitoring Your Credit Is the First Line of Defense
You may never know, or you may find out way too late, that someone has stolen your personal information and opened credit accounts in your name. The only way you will find this out is if you monitor your credit very carefully. There are two ways to keep a close eye on your credit:
- Pull your credit reports once a year and review everything with a fine tooth comb. Look for any unauthorized credit inquiries, recently opened credit accounts, or incorrect personal information. You are able to get your credit reports for free once a year from AnnualCreditReport.com.
- Sign up for a credit monitoring service. This requires a monthly fee to keep it going but they will immediately send you a notification if any accounts or inquiries are posted to any of your credit files. We have put together a list of recommended credit monitoring companies for your convenience.
Continuous monitoring of your credit files will immediately alert you to any identity fraud.
Steps to Take if a Fraudulent Account Had Been Opened in Your Name
If an imposter has opened fraudulent credit accounts in your name, you will want to act fast to protect your identity and your credit. First, you need to immediately place a 90-day fraud alert on your credit file. This can be done by calling one of the three major credit reporting agencies and inform them that a thief has compromised your credit accounts. Our article Placing a Security Freeze on Your Credit File will give you more information on how to do this. Once you contact one of the bureaus, they will contact the others and notify them of the fraud alert.
Having this fraud alert in place tells lenders to take extra steps to verify that you are the one who is seeking the request for new credit. It also entitles you to receive a free copy of your credit report from each of the three major credit reporting agencies. Again, review these reports carefully making sure to note any and all accounts that you do not recognize as your own.
Next step is to file a complaint with the Federal Trade Commission (FTC). Print off a copy of the complaint and use it to file a police report with your local law enforcement agency. Additional information on doing this can be found in our article What to Do if You are a Victim of Identity Theft.
This next step is probably the most time consuming but is the most important - dispute all fraudulent accounts found in your credit file. Contact the financial company where the thief has opened the account and talk to their fraud department. Inform them you are a victim of identity theft and follow-up the conversation with a certified letter. Be sure to ask them if there is any paperwork you need to fill out for them, and if so, keep copies of all correspondence for your records.
You will also need to send a dispute letter to each of the credit reporting agencies informing them of the fraudulent accounts opened in your name. Request that the fraudulent accounts be removed from your credit file. It is a good idea to send all of these dispute letters certified mail with a return receipt and keep copies of all letters for your records. The credit reporting agencies have 30 days to investigate your dispute. If these bogus accounts are not removed after the first round of letters, keep sending the dispute letters until the accounts have been completely removed. Since this process may take a few months, you might need to place a second 90-day fraud alert on your credit files.
Monitoring your credit scores is another good way to catch identity fraud. If you monitor your scores regularly and you notice a large, unexpected change, it is time to pull your credit reports. Chances are you will find some unauthorized activity in your credit files and you will need to act quickly. Keeping a constant watch on your credit reports and scores will notify you of any fraud and will give you the opportunity to act quickly and repair your damaged credit.