Credit cards offer people a lot of financial flexibility, like making seamless purchases and repaying their balances in the future. But some cyber criminals try to open credit cards with other people’s credentials. They can spend money with cards they opened in your name, which can negatively impact your credit.
Credit card theft can happen to anyone, but knowing what to do in this situation can reduce the headaches along the way. This guide will discuss what to do if someone opens a credit card in your name.
How to find out whether someone opened a credit card in your name
The first step to solving a problem is to recognize that it exists. Reviewing your credit report periodically can help you discover credit card fraud and dispute errors. Identifying mistakes on your credit report and having the credit bureaus correct them can help improve your credit score. If you see unfamiliar accounts on your credit report, you should immediately report them.
4 steps to address identity theft
If you find any suspicious activity on your credit report, you should take immediate action. Letting credit card theft linger can get expensive in a hurry and damage your credit. You can take these four steps to address identity theft.
1. Contact your credit card issuer’s fraud department
Your credit card issuer’s fraud department can help you close or freeze the suspicious account. You can then share information from your credit report and have them take action. If you do not freeze or close the account, the pain might continue, especially if the thief continues tapping into your credit.
2. Report the identity theft
Consumers have to report identity theft to be reimbursed. You can tell your credit card issuer and then file a report with the Federal Trade Commission (FTC). The FTC addresses identity theft recovery and provides useful resources to help people avoid identity theft in the future.
3. Consider placing a fraud alert or credit freeze
All three credit bureaus will continue to update your credit history with new transactions. Fraudulent transactions will continue to impact your credit unless you inform the credit bureaus. Alerting each credit bureau about fraud and freezing your credit can limit the damage as you get yourself on the path to recovery.
4. Dispute any charges made in your name
Disputing charges within the right time frame will help you reclaim your money. Debit cardholders must dispute charges and notify their issuers about fraud within 60 days of the transaction. Credit cardholders have 120 days to dispute charges and potentially receive their money back.
What to do if a family member opened a credit card in your name
Identity thieves are not always strangers in different countries. Family members can also take advantage of each other because they are less susceptible and can often access each other’s personal information.
People who steal people’s identities will rightfully face criminal charges, even if they are family. While you might not want to report a family member for fraud, you will have to report the incident in order to protect yourself from the liabilities.
How to manage and prevent identity theft
Identity theft is a serious issue that doesn’t stop with credit. An identity thief may obtain other pieces of information pertaining to your identity that can put you in legal trouble in the future. Stopping them as soon as possible can keep you safe from worst-case scenarios. You can use these protective measures to manage and prevent identity theft.
1. Close all new accounts opened in your name
Closing new accounts that were opened in your name will limit an identity thief’s ability to damage your credit and obtain free money at your expense. You should look for new bank accounts, loans, and other accounts that look suspicious.
2. Double-check your debit cards
Some identity thieves will obtain your debit card details and start spending at will. That said, not all of them will splurge right away. They could start slowly by making small transactions as a way of testing the waters and hoping you won’t notice.
Make sure you check your debit card right away because you don’t have much time to get your money back with debit cards. You have to report suspicious transactions within 60 days of receiving your bank statement, and if you report suspicious transactions after 60 days, you may be liable for the charges.
3. Act fast
Acting quickly limits the damage that you will sustain. Taking swift action can get you off the hook for certain expenses. Leaving the issue alone can lead to long-term financial ruin, and the identity thief may perform illegal actions under your alias. Some innocent people have been arrested because of what an identity theft did under their name. It is important to act quickly and be careful.
4. Safeguard your personal information
Identity thieves will use your personal information, including your name, birthdate, and Social Security number, to masquerade as you. Be cautious about anyone who asks for your personal information.
Make sure you check your credit report each year for any suspicious information. The authorities can help you if you are the victim of identity theft. However, it is your responsibility to protect yourself to the best of your ability. This precaution can help you avoid having to file a report.
How to rebuild credit after resolving credit card fraud
Credit card fraud can hurt your credit score. If you find yourself with a lower score, you can follow these strategies to help rebuild your credit.
1. Continue monitoring your credit reports
Once you discover a cyber criminal has stolen your identity, you have to limit the damage. Once you file a report and take protective measures, the authorities will take over. If you stop one cyber criminal, another can emerge in the future. Monitoring your credit report periodically can help you detect future identity thieves sooner. You can also look for mistakes on your credit report and request corrections. That strategy can help improve your credit score if negative items are inaccurate.
2. Maintain good financial habits
Good financial habits go a long way toward maintaining a good credit score. Making on-time payments and whittling down your debt can help you achieve a great credit score. Good financial habits can also make it easier to retire in the future.
3. Consider getting a credit-builder loan
A credit-builder loan gives people with bad credit or no credit history the opportunity to build credit. Credit-builder loans require small security deposits to get started, and they typically range from $500 to $1,000. Most credit-builder loans have six- to 24-month terms. The lender will report your payment history to the major credit bureaus, allowing you to help improve your score in the process.
If you are working on building up your credit or improving your credit score, MoneyLion is here to help! MoneyLion offers a free and convenient way to find offers from our trusted partners to help you improve your credit — such as credit monitoring, credit report disputes, and getting credit by paying bills. A good credit score can lead to lower interest rates and increased borrowing power on loans and credit cards. Check out credit building options below:
Protect your identity
Identity theft is a serious threat that looms over everyone. You never know when it could happen to you. Safeguarding your personal information and staying on top of your finances can help you quickly detect fraudulent activity.
From there, you can follow up with the appropriate actions. Identity theft protection is part of fortifying your finances and protecting your wealth.
FAQ
Will I be responsible for the charges made on the fraudulent credit card?
You can become responsible for fraudulent charges if you do not report them within 120 days.
How long does it take to resolve credit card fraud issues?
The entire process can take up to 90 days after you notify the company about the fraud.
Should I close all of my existing credit card accounts if someone opens a credit card in my name?
You should freeze or close any suspicious accounts.
