How to Recover from Identity Theft – The Complete Guide

Last Update: August 31, 2021 Identity Theft

You become a victim of identity theft, what’s the first thing you should know?

A million questions will race in your head, and that’s okay.

We will air everything out here in ElitePersonalFinance ‘Guide to Identity Theft Recovery.’

Please share this post must be seen by everyone; there is too much misinformation on the Web!

So how do you shape a “Victim Rights Handbook” exactly?

Our expert authors have contributed tremendous content, and we are proud to say ElitePersonalFinance is one of the most in-depth finance sites running. We decided on creating this handbook so victims knew everything they should go into their recovery process instead of getting them caught up in our various blog posts.

We asked ourselves, “If one of our readers were to become a victim, would they find all the answers they needed on our website?”

Unfortunately, we cover all the angles across dozens of posts, so it requires many sifting to understand everything. This is why we decided to create a sort of “consumer’s take” on the FTC’s Guide for Assisting Identity Theft Victims – a guide designed for attorneys to manage the restoration of their clients’ identities optimally.


  • We will cover a few things that will be very helpful to know before becoming a victim.
  • You will leave with a better perspective on how you can and should go about recovering your identity.
  • It will no longer be an issue to understand how identity crime is to be reported and filed.
  • If legal issues arise, knowing the laws that protect you will make all the difference.

To demonstrate these points, we will often reference laws and legislatures that articulate our points. Although other acts are relevant, many of these examples come from the Fair Credit Reporting Act (FCRA) and the Fair Credit Billing Act (FCBA).

Defining The Types of Identity Theft

Forget any other classifications you ever used; you should consider the different types of identity theft that exist by one rule alone: Is it a new account or pre-existing account fraud?

If it is a new account fraud, that means the thief stole your information to establish new credit lines under your name. This is damaging, but it is less serious as the fraudulence of the accounts is obvious.

If it is a pre-existing account fraud, that means the thief knew enough to impersonate you or breach your accounts’ security. This is troubling, as you must go through a process to prove to your creditors that you are not to blame.

Your credit score could drop if you fail to prove innocence and get the account reactivated. This happens as a result of the decrease in your average credit age.

Now we will cover the many challenges you will face along the way and how you can conquer them.

What Must an Identity Theft Victim Do First?

When you first discover the crime, you will likely follow these four steps before doing anything else:

  • Contact all affected creditors to inform them of the fraudulent actions.
  • Request your accounts to be temporarily closed or suspended until the investigation is complete.
  • Place a fraud alert on your credit reports to minimize the risk of getting re-victimized. Tip: You get a free credit report with your initial fraud alert, separate from one yearly free report through
  • File an FTC complaint about identity theft and hold onto the FTC Identity Theft Affidavit you receive in return.
  • File a police report to provide documented proof that the crime took place. When doing so, you must supply the affidavit you received.

Those are the steps everyone takes, but most fail to do more.

After those four steps, you enter into a situation-based recovery process, and the right solutions are always person-specific. It is impossible to guide everyone; we will cover how those four initial responses are handled, and the post-reporting battle typically gets neglected.

How to Place a Fraud Alert on Your Credit Report?

To place a fraud alert online, go to:


This fraud alert will remain for 90 days or until it is proven that you were victimized. Those that are victims will have their alert extended to a seven-year period.

What about security freezes?

A security freeze works to prevent fraudsters from opening new credit lines in your name. If your file is frozen, you must request a temporary lift before the lender can pull your file. This is done by using a unique security code as a form of two-factor authentication. It drastically decreases new account fraud.

Unfortunately, that is not the case for victims of pre-existing account fraud. Since the freeze cannot protect your file from getting pulled by pre-existing creditors, it is only partially efficient.

How to File an FTC Identity Theft Complaint?

The FTC Identity Theft complaint must be filed to obtain your affidavit. This is an important step and needs to be done before filing your identity theft police report.

Go to and fill out their form to file your complaint.

When doing so, you will be expected to provide information on yourself and the crimes discussed in your complaint. This could include but is not limited to details like your date of birth, mailing address, and Social Security Number, as well as your financial accounts, and criminal evidence, and so on.

Make sure you get a copy of the affidavit when you are done!

How to File a Police Report?

Like any other type of crime, walk into your local police station and request a form to fill out your report.

You will be asked to supply general details about the crime. The bulk of the technical information already shows up in the affidavit. This means the police report is usually generalized. If any creditors ask for proof in the police report, make sure to attach the FTC affidavit.

What’s Next: Recovering After Reporting

Your initial response to the identity theft takes a few hours, with most of it coming from feeling confused and overwhelmed. Once you grasp the situation, there’s still a lot of repair work to face — this is what most of the “500 hours on average” comes from in regards to ‘recovering’ from identity theft.

Now you will be more focused on stuff like:

  • Closing any fraudulently opened credit accounts.
  • Getting illegitimate charges dropped from your file.
  • Having your credit report errors fixed up.
  • Securing your accounts to prevent getting re-victimized.

You might turn to credit monitoring and/or identity theft protection services by this point. Each has its own merits, but we suggest you read our reviews. Regardless of how you do it, you will need to be pretty consistent with checking your credit data over the next few months.

Collect All Your Information Before Proceeding!

Instead of stressing about all the tasks you are about to do, get yourself calm and collected. It’s important to put yourself in an advantageous position — that means being prepared for all possibilities to come.

The right way of doing this is to make sure you have all the paper materials in place to defend yourself.

Here is a list:

  • Photo IDs (government-issued) for proof of identity.
  • Utility bills or similar statements for proof of address.
  • A copy of any credit reports showing fraudulent errors.
  • Letters from any collection agencies and/or creditors.
  • Bank and/or credit card statements referencing the crime.
  • The merchandise you received in the mail without ordering.
  • Your up-to-date log containing all actions you have taken thus far.

Next, you must do a full credit review and assess your situation entirely.

How to Find Credit Damage Caused by Identity Theft?

Your credit score is probably shot down 100 points or more by now — no matter how extensive the damage is, the reason for it can be found within your credit reports. As such, it is in your best interest to obtain all three of your credit reports (Equifax, Experian, and TransUnion) and review them for fraudulent entries.

When should you obtain your credit report?

Of course, you need to get your hands on all of them once you find out you were victimized. You can notify the credit bureaus of that and take advantage of the free credit report they give you due to placing your initial fraud alert. Alternatives can be found for free or at a low cost, but they can also come with time-based limitations.

Did you get your credit report and are not sure how to read it? Read on …

Once you have your report from each of the three major bureaus, you can start sifting through them for errors and fraudulent items. We will address how to find these issues and guide you through the resolution process.

Handling Fraudulent Items on Your Credit Report

So when you start digging through your credit file, you should watch out for credit report ‘errors’ like fraudulent accounts and unprovoked hard inquiries.

Make a note of any case where your information was used fraudulently, whether through misuse of a current account or forging a new one open.

Take action right away:

  • Contact the fraud department of the creditors that have fraudulent accounts in your name.
  • Detail the identity crime that happened and that the account must get terminated with the charges taken off.
  • Request a mailing address to transmit debt dispute resolution communications and/or documents.

Generally, this process goes through without a hitch because these companies have no reason to believe you fabricated the story. That does not mean every creditor will say, “okay,” and be on their ‘merry way’ right after.

You may have to prove you were not responsible for the fraudulent account in the first place. The FTC Identity Theft affidavit is a big part of this process!

That said, sometimes, you will have to file an identity theft report through your creditor also. You can save a lot of hassle by asking the company right away whether they consider the FTC’s affidavit to be sufficient evidence. If it’s a pre-existing account fraud scenario, the affidavit will not always be credible enough.

Regardless of what you must provide, always document all your efforts (and time) that get wasted in your attempt to restore your identity. It will become very beneficial if you ever need to prove the financial damages faced due to the crime — such as if it reaches civil litigation and the fraudster ends up paying restitution to you.

How to Communicate with Creditors?

After you notify the affected creditors over the phone about getting victimized, you must now send them dispute letters in the mail to fix the damage for good.

If the crime was obvious, the company might remove the entry from your credit report on the first sign of evidence in your favor. Otherwise, your dispute letter is necessary, and it must be approached the right way for it to work without further efforts or legal interference.

Criminal Identity Theft – How to Clear Yourself of Guilt?

If an impersonator uses your information to avoid a crime’s legal repercussions or avoid restitution in a civil matter, you could be held liable. This might even lead to your unexpected arrest; it could later lead to your incarceration if you cannot prove your innocence.

That’s the unlikely end game, but it’s considered a ‘worst-case scenario’ for identity theft victims. Yet, preventing it is simple: you need to prove that you were not responsible for the crime.

How do you do that?

The fraudster usually does it for you by using fraudulent credit cards to shop from popular retailers, leaving an IP trail that traces to the thief’s home. They then get arrested, their place gets searched, and your innocence becomes clear as the stolen goods are found.

Sometimes it’s not all black and white. In fact, identity theft is a whole lot of a gray area’, and figuring out the little details is what counts in the end. As you know your own credit history best, figuring this all out is best done on your own.

Examples of evidence to support your claims:

  • A letter from your employer stating you were at work at the time of the crime.
  • A print-out of the order receipt showing the separate physical recipient.
  • A copy of your police report showing that leads on suspects were followed or found.

Not everyone has time to catch these errors. For instance, in cases where the fraudsters’ end game is a credit limit increase before the significant charge shows up, this means an identity thief could test your information in the months before a larger fraud attack.

How to Log Your Identity Restoration Progress?

It’s important to keep a good note of all the efforts you make, as we stated earlier. Many start out meaning well with their own documentation approach but fall off track along the way.

You have to do these things:

  • A copy of your police report and the FTC Identity Theft affidavit at all times.
  • All phone calls, with a description including the date and time of each.
  • Any details collected on your accounts and the fraudulent actions.
  • All changes to account statuses, such as the timing of credit card cancellations.

Take the time to record every action and the response you got from it. The more responsible you are with logging this stuff, the less likely you will be held liable. If it is obvious that you are innocent, taking an accountable approach will speed up the identity recovery process and kick-start your credit regrowth.


It is easy to misunderstand what you are entitled to when you feel like your back is against the wall. But, many things can work on your side if you play your cards right. This means knowing all your different rights as a victim. For example, many are unaware that we pointed out that victims can request a free report separate from the annual free credit report.

If you have taken the time to read everything here and something still confuses you, we are always willing to help, so … please take the time to write to us below, and we will lead you to your answer!