What should you do when someone took out a loan in your name? – Identity theft can take many forms. Thieves can open various forms of credit in your name, from credit cards to student loans, and completely destroy your credit history and financial standing.
If this happens to you, resolving the problem can be difficult and time-consuming. But you have the ability to make things right.
If someone took out a loan in your name, you must act quickly to avoid further damage to your credit. Follow these steps to protect yourself and eliminate fraudulent accounts.
Submit a police report
The first step is to file a police report with your local police department. This may be possible to do online. In many cases, lenders will require you to submit a police report documenting the theft before they will remove the fraudulent loans from your account.
Make Contact with the lender
If someone took out a loan or opened a credit card in your name, notify the lender or credit card company immediately and request that the account be removed from your credit report. Problems with credit cards and even personal loans are usually quickly resolved.
Identity theft can have serious consequences for the victim when it comes to student loans. Failure to pay a student loan can result in wage garnishment, license suspension, or the government seizing your tax refund, so it’s critical that you stop any fraudulent activity and get the loans discharged as soon as possible.
In general, you must contact the lender who issued the student loan and provide a police report to them. The lender will also require you to fill out an identity theft report. You are not held liable for payments while your application for discharge is being processed.
The procedure is similar if you have private student loans. Each lender has its own procedure for dealing with student loan identity theft. However, you will most likely be required to submit a police report as proof, and the lender will conduct an investigation.
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If needed, notify the school.
If someone took out student loans in your name, contact the school where the loans were taken out. Call their financial aid or registrar’s office and explain that a student on their campus borrowed money in your name. They can flag the account in their system and prevent anyone from obtaining additional loans using your information.
Resolve the issues with the credit bureaus.
When you discover fraudulent activity, you must file a dispute with each of the three credit reporting agencies: Experian, Equifax, and TransUnion. You should contact each one and provide evidence, such as a police report or a letter from the lender acknowledging the identity theft. Once the credit reporting bureau has that information, the accounts can be removed from your credit report.
If your credit score has suffered as a result of thieves defaulting on your loans, having them removed can help you improve your score. Your score may take weeks or even months to fully recover, but it will eventually be restored to its previous level.
Immediately Place a fraud alert or freeze on your credit report
As soon as you discover you are the victim of a fraudulent loan, notify one of the three credit reporting agencies and place a fraud alert on your credit report. You can do it online.
Potential creditors or lenders who run your credit will be notified if you place a fraud alert on your account. The alert prompts them to take additional steps to verify your identity before issuing you a loan or other form of credit.
Sometimes, freezing your credit may be a good idea. Creditors cannot view your credit report or issue you new credit if you have a credit freeze.
Check your credit report on a regular basis.
Finally, track your credit report on a regular basis to ensure that no new accounts are opened in your name.
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