Home Personal Finance Someone has taken out a loan in your name. What now?

Someone has taken out a loan in your name. What now?

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Identity theft comes in many forms. Identity thieves can open credit accounts in your name, from student loans to credit cards, and destroy your financial history.

It can be time-consuming and difficult to fix the problem if this happens. You can still make things right.

It’s crucial to act immediately if someone has taken out a loan on your behalf to avoid further damage to your reputation. Follow these steps to get rid of fraudulent accounts and protect yourself.

1. Report a crime

You should first file a report with the local police department. This might be possible online. You may be asked to provide a police report to prove the theft before lenders will remove fraudulent loans. (See also 9 Ways Your Identity Has Been Stolen).

2. Contact the lender

Contact the credit card or lender directly if someone has opened a fraudulent account in your name. They will remove the account from your credit history. Credit cards, and even personal loans can be quickly resolved.

Identity theft can be a serious problem when it comes to student loan repayments. If you fail to pay your student loan, it can lead to wage garnishment, license suspension, or even the government taking your tax refund. It’s important that you stop any fraudulent activity and discharge the loans quickly.

You’ll generally need to contact your lender and give them a copy of the police report. You will be asked to fill out an identity theft report by the lender. You are not responsible for any payments while your application is being reviewed.

The process is the same if you have private student loan. Each lender has its own procedure for dealing with student loan identity theft. You will typically be asked to provide a police report and the lender will conduct an investigation.

3. Notify the school if necessary

Contact the school that the student used to obtain the loan. Contact their financial aid office or registrar and let them know that a student took out loans in your name. The system can be flagged to prevent anyone from using your information for any further loans. See also: Protecting Your Child from Identity Theft.

4. Resolve the error with the credit bureaus

You should dispute any errors you discover with the three credit bureaus: Experian Equifax and TransUnion. Contact each agency and provide evidence such as a police report or letter from your lender acknowledging identity theft. Once they have this information, the credit bureau can remove these accounts from your history.

 

Your credit score can be improved if you have a low score due to a default on your loan. Your score may take several weeks to recover to its original level. (See also Don’t Panic! Do This If Your ID Is Stolen).

5. Put a fraud alert on your report or freeze it

You can place a fraud warning on your credit file as soon as you discover that you have been the victim of fraudulent lending. You can do so online:

  • Experian
  • Equifax
  • TransUnion

You can alert potential creditors and lenders to your fraud alert by placing it on your account. They will then receive an email when they check your credit. The alert will prompt them to take extra steps to verify your identification before they issue a loan or credit form in your name. (See also How To Get A Free Fraud Alert On Your Credit Report).

In certain cases, it may be a smart idea to free your credit. Creditors cannot see your credit report, or give you new credit until you remove a freeze.

6. Regularly check your credit report

Check your credit report to make sure that no new accounts have been opened in your name. You can request a free report from each of the three credit reporting agencies once a year at AnnualCreditReport.com. You can take one report every four months to keep track of account activity. (See also How To Read A Credit Report).

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