Advertiser Disclosure

How to Dispute Negative Credit Due To Identity Theft

Question: I just discovered through Equifax that there appear to have been a credit and a charge account opened in my name, not by myself. Whoever ordered them, luckily, must not have been able to activate them though so there is no history over the last four years, but they have been closed by the creditors and are appearing as negative accounts. There are also two addresses listed at which I never lived. To dispute these two accounts and report the wrong addresses, should I write directly to the credit companies, or Equifax, or both? Thank you!

First, let me rant just a little bit. Please start monitoring your credit reports several times a year. Identity theft continues to rise partly because consumers are unaware it’s happening. Monitoring your credit on a regular basis can prevent the horrific damage sometimes caused by identity theft. Consider yourself lucky it wasn’t worse.

Don’t assume identity theft happens to other people. It can happen, through no fault of our own, to anyone.

Nearly 60 million Americans have been affected by identity theft, according to a 2018 online survey by The Harris Poll.

Monitoring your credit allows you to act quickly which can minimize the damage.

I think you should approach the issue on three levels (the creditor, the FTC and the credit reporting agencies) because even though the accounts were never activated following normal identity theft procedures will get the information removed.

Steps to take when Identity Theft Occurs

1. Fraud Alert. In your situation I don’t think you need to notify the credit reporting agencies of fraud because the incident happened some time ago. But normally you would alert one credit reporting agency of fraud and they would alert the other credit reporting agencies and place a fraud alert in your files to prevent further accounts from being opened. You would be entitled to a free credit report from each of the three credit reporting agencies.

2. Consider Freezing Credit Reports. The credit report security freeze will prevent the credit bureaus from providing your credit report to anyone without your approval. Contact the credit bureaus to find out whether your state allows you to use the credit freeze option. There may be a fee.

3. Contact Credit Company. Call and follow-up in writing (certified mail, return receipt) the fraud department of the credit accounts. You want to notify the credit card companies in writing to keep a paper trail. Request their dispute form for victims of identity theft. You said the accounts were never activated but are showing negative on your credit reports. Request they remove whatever negative information is showing on your credit reports due to this fraud. But before you return the dispute form add your supporting documentation as described below.

4. File a Police Report. A crime has taken place and filing a police report can help get the negative accounts removed from your credit report. Your local law enforcement will be able to help you in filing a report. This step is not required but it helps when charges are involved and it puts pressure on credit card companies to remove negative credit due to fraud.

5. Identity Theft Report. The Federal Trade Commission which governs the Fair Credit Reporting Act, provides an Identity Theft Recovery Plan. This plan can help you get the negative information removed from your credit reports.

According to the FTC: “…If the company has already reported these unauthorized accounts or debts on your credit report, an Identity Theft Report will require them to stop reporting that fraudulent information.”  They have a cover letter you can send to the credit card company and a letter to the credit reporting agencies which explains the rights you have by using the Identity Theft Report.

More information can be found here regarding the FTC’s Identity Theft Report and how it works. You can use the Report to:

  • get fraudulent information removed from your credit report
  • stop a company from collecting debts that result from identity theft, or from selling the debt to another company for collection
  • place an extended fraud alert on your credit report
  • get information from companies about accounts the identity thief opened or misused

Dispute Directly with the Credit Bureaus

You can go the route of disputing the fraud accounts with the credit bureaus but they may require supporting documentation such as the Identity Theft Report before the accounts can be removed anyway. If not, they may verify the accounts as accurate resulting in the fraud accounts remaining on your credit reports.

As far as the addresses, dispute the incorrect addresses directly with the credit reporting agencies. Address disputes are usually removed without much problem. Continue to monitor your credit report for new activities by the identity thieves for several months.

Bottom line on getting fraudulent information removed due to Identity Theft

Victims of identity theft should immediately utilize the FTC’s Identity Theft Report. You have the right remove fraudulent information from your credit report through “blocking.” Once the fraudulent information is blocked, it won’t show up on your credit report, and companies can’t try to collect the debt from you. If you have an FTC Identity Theft Report, credit bureaus must honor your request to block this information.

The best of luck to you.

2 thoughts on “How to Dispute Negative Credit Due To Identity Theft”

  1. I was served a court notice in 8/2014 for a crowd off credit card. I went to the hearing but the representative from the credit card company didn’t show up. Please tell what do I do next? The credit card is on my report as a collection account

    1. Disclaimer: I am not an attorney and strongly suggest you seek proper legal advice.
      You need to take a look at the documents sent to you after the hearing. Dismissing the case and dismissing the debt are two totally different issues. Dismissing the court case does NOT erase a legitimate debt.

      It depends upon whether the credit card company lost its case. If the case was dismissed “without prejudice” that means they can re-file the case and start all over again with a new case number, new trial date and a new service of process on you. And, the collection agency can continue to report the delinquent debt on your credit reports.

      If the case was “dismissed with prejudice” it is final judgment that prohibits the credit card company from bringing any other lawsuit based on the claim. This would essentially wipe the debt out and the collection agency would have no basis for reporting a debt that is no longer owed.

Leave a Reply

Your email address will not be published. Required fields are marked *