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Steve Bucci, the Bankrate.com Debt AdviserUndoing identity thief's credit report damage

Dear Debt Adviser,
Hello, I'm a victim of identity theft and thus my credit score is ruined. I have successfully acquired letters from several companies confirming the fact that thieves used my Social Security number. How can I rebuild my credit now? The three major agencies have not fixed my score after repeatedly providing sufficient proof.
-- Arnold

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Dear Arnold,
As you and hundreds of thousands of others have found, clearing up this type of theft can be frustrating and time-consuming. Since I don't know where you are in the process, I'll start at the beginning, and you can pick up from where you are on the course of suggested actions.

Once you know your identity has been compromised and used by a thief, follow these steps:

File a police report. The report is an essential tool you will need if a collector, law enforcement agency or other party does not believe you when you tell them "it wasn't me ... honest!" A police report may also be needed to initiate a credit report freeze.
Contact all three of the credit bureaus to let them know you are an identity theft victim. In theory, one call should result in a fraud alert being placed on all three of your credit files within 24 hours. This does not, however, always happen as it should, so I suggest you do it yourself to be sure. There are two flavors of fraud alert to choose from -- one for 90 days, the other for seven years. If you have been victimized already, I'd do the seven-year alert.
If you live in a state that allows you to freeze your credit file, get out your ice cubes and freeze that report until you determine the extent of the damage caused by the thief.
Cancel any credit and or debit cards that may have been compromised. You'll find the phone number for the fraud department on your monthly statement or through customer service.
Inform the Federal Trade Commission by visiting the ID Theft complaint form on its Web site or calling the ID theft hot line at (877) 438-4338, and fill out an Identity Theft Affidavit that can be used to dispute accounts or charges with creditors.
Notify your local post office if you believe that your identity may have been stolen using information from pieces of your mail that were illegally obtained.

To begin your credit life again after identity theft, follow these steps below:

Close your existing bank, credit card and other accounts, and reopen with new account numbers. You want the thief to run into a dead end if he or she tries to use any other information of yours that may have been stolen.
Ask the credit reporting agencies to put a block on the compromised accounts. This should keep them from being counted in your credit score.
With new accounts you will need to choose new personal identification numbers, or PINs, and passwords. Be sure you keep these safe, and never keep them in written form in your wallet with the cards to which they are associated.
Monitor your credit report frequently. With a fraud alert on your file you are entitled to free reports every six months. If you decide to use a monitoring service, use one that checks all three bureaus often as well as public records and other possible sources that will indicate you are still being victimized. If you go this route, I'd recommend you keep the service for two years after any fraudulent activity ends to be sure your data aren't just being banked for future use.

I know that the pace of recovering from identity theft and getting your credit life back to what it once was is slow and burdensome. The Fair and Accurate Credit Transactions Act is a useful tool for persons who are having trouble with creditors or the credit bureaus as a result of identity theft. Check out the consumer-oriented provisions that may be of benefit on the FTC Web site. One last thing for you to keep in the back of your mind is that if the thief keeps using your Social Security number, especially for illegal purposes, you may want to contact the Social Security Administration about getting a new number assigned. This can be done, but it is not easy and requires lots of work on your part both before and after a new number is issued.

Good luck!

The Debt Adviser, Steve Bucci, is the president of Money Management International Financial Education Foundation and the author of Credit Repair Kit for Dummies. Visit MMI for additional debt advice or to ask a question of the Debt Adviser go to the "Ask the Experts" page and select "Debt" as your topic.

Bankrate.com's corrections policy -- Posted: May 19, 2006
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