Does identity theft affect your credit score?

If you’ve been a victim of identity theft (sometimes called ‘ID theft’) it can make you feel scared, anxious, and even embarrassed. It can also leave you with financial difficulties. It’s a horrible thing to happen, but it’s important to know that you’re not alone. Loqbox has some practical advice to help you back to your feet and feeling yourself again.

So, what is identity theft? As the name suggests, identity theft is where criminals ‘steal’ your personal details to take on your identity and commit crimes. They could take money directly from your accounts, but they might also attempt to take out credit in your name, leaving you and your credit score accountable for the debt, or with a series of hard credit checks against your name which can drag your score right down.

Identity theft is on the rise. There are hundreds of thousands of victims every year in the UK, with the vast majority of crimes taking place online. Criminals have also become increasingly sophisticated, with scams tripping up even the most eagle-eyed victims. If you’re affected by identity theft, it’s important not to be shamed into silence. There’s help out there for you!

Does identity theft lower credit score?

Yes, it can. Identity theft can have a big effect on your credit score and on your finances in general. The scale of the effect will depend on what sort of crime is committed, but it’s important that you deal with any identity theft as soon as possible. There are two main ways that identity theft can impact your credit score.

The most direct impact of identity theft is when a criminal assumes your identity to take money from your accounts. With your personal information and security passwords, a person could pose as you and make transactions using your cards and bank accounts. Losing a lot of money in one go can leave you unable to pay your bills, which can affect your credit score.

It’s also possible for criminals who’ve stolen your identity to build up debts in your name. While this type of theft doesn’t take money directly from you, it can leave you with responsibility for the money owed. This can have a big effect on your credit score as the irresponsible activity is reported on your credit history. 

How to fix credit scores after identity theft?

If your personal information has been compromised, you could be vulnerable to identity theft. So, what do you need to do if it happens to you? Here’s a quick checklist of things you should do as soon as you can to try and fix your credit score after you’ve been a victim of identity theft.

Report the crime

If you know that someone has got hold of your sensitive information, you should contact Action Fraud, the UK’s national fraud and cybercrime reporting agency. The service is run by the City of London Police and the National Fraud Intelligence Bureau (NFIB). Not only can you make a report if you’ve been a victim of identity theft, but you can also find some really useful help and advice there.

Check your credit report and contact CRAs

Next, you should check your credit report. It’s important that you get a look at the bigger picture. Is there any activity on your credit history that you don’t recognise? Look for credit searches that you weren’t expecting, and contact the relevant creditors to explain the situation.

The three main credit reference agencies (CRAs) in the UK, Experian, Equifax and TransUnion, all have access to your credit report. If you think your identity is being used for criminal activity, you should check your credit report with all three. The good news is you can do this for free and without making your credit score drop with these useful links:

ClearScore (uses Equifax data)*
Credit Club (uses Experian data)
Intuit Credit Karma (uses TransUnion data)

*Because life has enough surprises, we just wanted to let you know that we get a small commission if you sign up for ClearScore using this link.

You should also contact all the CRAs’ fraud support teams for more information on what you should do. For extra context, you can leave a notice of correction on your accounts. This is a short statement that you can place on your credit history to give some additional information related to the activity showing there.

Contact providers affected by the identity theft

The CRAs may contact lenders who are impacted on your behalf. But otherwise you’ll need to contact them yourself. It’s important to let them know as soon as possible that you suspect fraudulent activity, or if you receive any communications that accounts have been opened that you’re unaware of. Then they can start their own investigation as well.

How to protect yourself from identity fraud

If you’re worried that you might become a victim of identity theft (but haven’t yet been affected), the police have some really useful advice on how best to protect yourself. Here are some things that you can do to avoid it happening. 

Protect your address 

You should ignore unsolicited mail that you receive at your address. It’s great for the environment to opt for paperless communications where possible, but it makes it easier to spot scams that come through the post.

When you register to vote (something you should do to improve your credit score), you list your address. In fact, that is how lenders identify where you live. But you can opt out of the ‘edited’ register when you register to vote so that you can avoid receiving unsolicited mail.

Protect your bank accounts

Companies won’t ask for personal details over the phone, text or email. If you’re asked by any business for personal information, be suspicious by default! It’s easy to be caught out when you’re busy or distracted. So, if you’re unsure, hang up or delete, then get in touch with the company your own way (not using links you’ve been given). Ask them to confirm whether they contacted you, and if not, there’s a good chance you received a fraudulent communication.

Be sure to check your bank statements regularly to spot any activity on there that you don’t recognise. Also don’t throw any letters or statements in the bin if they have your account details on them. Instead, you should shred sensitive documents - or just go paperless!

Protect your phone and computer

The majority of identity theft scams happen online. So they are very likely to come to you on your smartphone or computer in the form of texts and emails with links. You should always make sure that you have antivirus software for your hardware and internet browsers, and that it’s kept up to date.

Whenever you’re making financial transactions online, it’s a good idea to check that there is a padlock icon in the address bar of the browser, and that the address itself starts with ‘https’. Most website addresses start with ‘http’ - but when the ’s’ is added it lets you know that it’s a secure page. If it isn’t, think twice!

What else can I do to protect myself from identity theft?

Check out Cifas

Cifas is a not-for-profit fraud prevention membership organisation that holds the UK’s largest database of reported fraudulent activity. It offers tools, tips and advice to individual members and brings professional organisations together to help fight fraud.

You can apply for Protective Registration Cover (£25 for two years) which places a flag on your account. Any companies that use Cifas will then take extra measures to ensure that it’s actually you making any transactions. This does mean additional hard credit checks, but the good news is it won’t affect your credit score to have the flag.

Find out more with the ICO

The ICO (Information Commissioner’s Office) is a UK body that was set up to protect information rights. It has some great advice and information here.

How do I fix my credit score after identity theft?

If identity theft has damaged your credit score and you’ve followed the steps above but you still need it to grow more, you can give your score a boost with Loqbox. Our powerful credit-building tools mean you have a number of ways to start rebuilding your creditworthiness. You can find out more about how to improve your credit score here. 

Improvements to your credit score are not guaranteed. 

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Sign up for our monthly emails and we’ll do our best to help you find your way on your journey with money
Give your credit score a boost
For just £2.50 a week, you could see your credit score rise by up to 300 points in the first three months
Get started
Improvements to your credit score are not guaranteed