What to Do If Someone Took Out a Loan Using Your Name?
Wise Bread Picks
Identity theft can manifest in various forms, from credit cards to student loans. Thieves may open different types of credit in your name, potentially ruining your credit history and financial standing.
If you find yourself in this unfortunate situation, it’s crucial to act quickly to mitigate further damage to your credit. Here are essential steps to protect yourself and eliminate fraudulent accounts.
1. File a Police Report
Your first step should be to file a police report with your local police department, which you may be able to do online. In many cases, lenders will require this report to remove fraudulent loans from your account. (See also: 9 Signs Your Identity Was Stolen)
2. Contact the Lender
If a loan or credit card has been opened in your name, reach out to the lender or credit card company immediately. Notify them of the fraudulent account and request its removal from your credit report. For credit cards and personal loans, this issue can often be resolved quickly.
However, student loans pose a more significant risk. Defaulting on a student loan can lead to wage garnishment, a suspended license, or even the government seizing your tax refund. Therefore, it’s vital to address any fraudulent activity swiftly and seek loan discharge.
Generally, you’ll need to contact the lender that issued the student loan and provide them with a police report. They will also require you to complete an identity theft report. While your application for discharge is under review, you won’t be held responsible for payments.
For private student loans, the process is similar, but each lender may have its own protocol for handling identity theft. Typically, you will need to submit a police report, and the lender will conduct an investigation.
3. Notify the School, If Necessary
If student loans were taken out in your name, contact the school that the thief used. Reach out to their financial aid or registrar’s office and explain the situation. They can flag the account in their system to prevent further loans from being issued under your name. (See also: How to Protect Your Child From Identity Theft)
4. Dispute the Errors with the Credit Bureaus
Once you identify fraudulent activity, dispute the errors with each of the three credit reporting agencies: Experian, Equifax, and TransUnion. Contact each agency and submit evidence, such as your police report or a letter from the lender confirming the identity theft. Once they receive this information, they can remove the fraudulent accounts from your credit history.
If your credit score has suffered due to these fraudulent loans, removing them can help restore your score. While it may take weeks or months for your score to fully recover, it will eventually return to its previous level. (See also: Don’t Panic: Do This If Your Identity Gets Stolen)
5. Place a Fraud Alert or Freeze on Your Credit Report
As soon as you discover you’re a victim of fraudulent loans, place a fraud alert on your credit report with one of the three credit reporting agencies. This can be done online:
When a fraud alert is in place, potential creditors will receive a notification when they check your credit. This prompts them to take extra steps to verify your identity before issuing credit in your name. (See also: How to Get a Free Fraud Alert on Your Credit Report)
In some cases, it may be wise to freeze your credit. A credit freeze prevents creditors from viewing your credit report or issuing new credit until you lift the freeze.
6. Check Your Credit Report Regularly
Finally, make it a habit to check your credit report regularly to ensure no new accounts are opened in your name. You can request a free report from each of the three credit reporting agencies once a year at AnnualCreditReport.com. Staggering your requests every four months allows you to monitor account activity throughout the year. (See also: How to Read a Credit Report)
Like this article? Pin it!
Wise Bread Picks
Identity theft can manifest in various forms, from credit cards to student loans. Thieves may open different types of credit in your name, potentially ruining your credit history and financial standing.
If you find yourself in this unfortunate situation, it’s crucial to act quickly to mitigate further damage to your credit. Here are essential steps to protect yourself and eliminate fraudulent accounts.
1. File a Police Report
Your first step should be to file a police report with your local police department, which you may be able to do online. In many cases, lenders will require this report to remove fraudulent loans from your account. (See also: 9 Signs Your Identity Was Stolen)
2. Contact the Lender
If a loan or credit card has been opened in your name, reach out to the lender or credit card company immediately. Notify them of the fraudulent account and request its removal from your credit report. For credit cards and personal loans, this issue can often be resolved quickly.
However, student loans pose a more significant risk. Defaulting on a student loan can lead to wage garnishment, a suspended license, or even the government seizing your tax refund. Therefore, it’s vital to address any fraudulent activity swiftly and seek loan discharge.
Generally, you’ll need to contact the lender that issued the student loan and provide them with a police report. They will also require you to complete an identity theft report. While your application for discharge is under review, you won’t be held responsible for payments.
For private student loans, the process is similar, but each lender may have its own protocol for handling identity theft. Typically, you will need to submit a police report, and the lender will conduct an investigation.
3. Notify the School, If Necessary
If student loans were taken out in your name, contact the school that the thief used. Reach out to their financial aid or registrar’s office and explain the situation. They can flag the account in their system to prevent further loans from being issued under your name. (See also: How to Protect Your Child From Identity Theft)
4. Dispute the Errors with the Credit Bureaus
Once you identify fraudulent activity, dispute the errors with each of the three credit reporting agencies: Experian, Equifax, and TransUnion. Contact each agency and submit evidence, such as your police report or a letter from the lender confirming the identity theft. Once they receive this information, they can remove the fraudulent accounts from your credit history.
If your credit score has suffered due to these fraudulent loans, removing them can help restore your score. While it may take weeks or months for your score to fully recover, it will eventually return to its previous level. (See also: Don’t Panic: Do This If Your Identity Gets Stolen)
5. Place a Fraud Alert or Freeze on Your Credit Report
As soon as you discover you’re a victim of fraudulent loans, place a fraud alert on your credit report with one of the three credit reporting agencies. This can be done online:
When a fraud alert is in place, potential creditors will receive a notification when they check your credit. This prompts them to take extra steps to verify your identity before issuing credit in your name. (See also: How to Get a Free Fraud Alert on Your Credit Report)
In some cases, it may be wise to freeze your credit. A credit freeze prevents creditors from viewing your credit report or issuing new credit until you lift the freeze.
6. Check Your Credit Report Regularly
Finally, make it a habit to check your credit report regularly to ensure no new accounts are opened in your name. You can request a free report from each of the three credit reporting agencies once a year at AnnualCreditReport.com. Staggering your requests every four months allows you to monitor account activity throughout the year. (See also: How to Read a Credit Report)
Like this article? Pin it!
