I have a case where someone that I know opened several credit cards under my name and ended up maxing each one out. There were a lot of late payments and eventually went to collections. I settled the debt with the collection agency but now I have several charge-offs under my credit history. Before all of this happened I had excellent credit but now my score has dropped tremendously. Is there anything I can do to get the charge-offs off my credit?
-Reader Question
What can be done with charge-off accounts due to identity theft?
As a result of identity theft, victims have particular rights that can help remove bad credit. It’s unfortunate you did not follow the steps a victim of identity theft would normally take after identity theft is discovered.
Fraudulent accounts can be removed from your credit reports with a simple affidavit provided by the Federal Trade Commission. I understand many consumers are unfamiliar with legal remedies available to solve bad credit due to identity theft.
Here is a quick look at how to handle identity theft:
File a police report
Start by filing a police report with your local law enforcement agency. Provide them with all the relevant information about the identity theft and the fraudulent accounts that led to the charge-offs. Obtain a copy of the police report as it may be required as evidence when disputing the charge-offs.
Contact the credit bureaus
Reach out to the three major credit bureaus (Equifax, Experian, and TransUnion) and inform them about the identity theft and the charge-offs resulting from it. Provide them with a copy of the police report and any other supporting documentation. Request that the fraudulent charge-offs be removed from your credit report.
Dispute the charge-offs
Initiate a dispute process with the credit bureaus to challenge the accuracy of the charge-offs. You can do this online or by sending a written dispute letter. Include all relevant details about the identity theft, such as dates, account numbers, and any other supporting evidence. Request that the charge-offs be investigated and removed from your credit report.
Contact the creditors
Reach out to the creditors that reported the charge-offs and inform them about the identity theft. Provide them with a copy of the police report and any other documentation that supports your claim. Request that they investigate the fraudulent accounts and update their records accordingly. Ask them to provide written confirmation of the resolution.
Follow up regularly
Stay proactive and follow up with the credit bureaus and creditors to ensure that the investigation is progressing and that the charge-offs are being addressed. Keep detailed records of all your communications, including dates, names, and reference numbers.
Consider a fraud alert or credit freeze
To protect yourself from further identity theft, you can place a fraud alert or a credit freeze on your credit reports. A fraud alert adds an extra layer of security, while a credit freeze restricts access to your credit report altogether. Contact the credit bureaus directly to initiate these measures.
Rebuild Your Credit with Responsible Credit Habits
Once you have taken the necessary steps to report the identity theft and dispute any fraudulent charges or accounts, it’s time to focus on rebuilding your credit.
Adding positive credit to your credit reports will go a long way in improving your credit score and getting them back to where they were before the fraudulent activity. While waiting for the charge-off to age off your credit report, the rebuilding process.
Another important actions is to continue to establish responsible credit habits. This includes paying your bills on time, keeping your credit utilization low, and avoiding opening too many new accounts at once.
You may also want to consider getting a secured credit card or becoming an authorized user on someone else’s account to start building positive credit history.
Use Goodwill Letters to help remove any remaining bad credit
Another way would be to approach the creditors who put the negative listings on your credit reports. Write a goodwill letter explaining the issue and the fact that all of the accounts have been settled with the debt collectors.
Also be sure to mention it was a result of someone opening accounts without your knowledge.
Goodwill letters can sometimes work if your situation is sincere. It also works to send the letter to someone in charge, like a vice president or at least a manager. You want the letter to get to someone who has decision making power and can act quickly.
