How Identity Theft Can Affect Your Credit Score

Do One Thing: If you suspect you (or a loved one) has been the victim of identity theft, check your credit reports immediately. You can get a free copy every week at www.annualcreditreport.com. Report suspicious activity to all three reporting agencies to protect against the impact of identity theft on your score.

Credit and Identity Theft is on the Rise

Identity theft keeps climbing, and credit card fraud remains the single most common form, according to the Federal Trade Commission (FTC).

• Through the first three quarters of 2025, the most recent data broken out by category, 503,450 cases of credit card fraud were reported to the FTC, nearly 180,000 more than over the same period in 2024. Since the FTC’s figures only capture what people actually report, experts say the true number of victims is almost certainly much higher.

Different Ways Identity Theft Impacts Your Credit

Identity theft can come with a litany of challenges, including damage to your credit score. How’s that? Here are a few ways your credit could be hurt by identity theft.

Identity Theft and Credit Utilization 

“If an unauthorized charge increased a balance on your account, and that increased balance was reported to a credit reporting agency, this can also impact your score,” notes Margaret Poe, head of consumer credit education at TransUnion. “That’s because your credit utilization ratio, which measures how much of your total credit limit you’re using, is an important credit score factor.”

The higher your ratio, the more it negatively impacts your score.

Payment History Impact

If a scammer uses your identity to rack up charges without you knowing, those can turn into past due or missed payments. This affects your payment history, the single largest factor in your credit score.

Credit Inquiries and Identity Theft

If a thief applies for new credit in your name, that leads to a hard inquiry on your credit report. Your credit score, of course, is based on information in your credit report, and each hard inquiry takes it down at least a few notches.

Report Credit Identity Theft

“There are several steps you can take if you’ve been a victim of identity theft,” says Poe.

1. First, notify the company where the unauthorized charges occurred, or where the inquiry originated. Their contact information should be on your credit report. 
2. Many financial institutions have dedicated fraud departments you can contact to help manage your account and investigate unauthorized charges due to identity theft.
3. It’s important to note that finding unauthorized charges on a credit card or in one of your financial accounts doesn’t necessarily mean someone has access to other important data that would allow them to open credit in your name. 

Protect Against Identity Theft, Freeze Credit Accounts

Still, it’s better to play it safe. “Inquiries you don’t recognize can indicate they do have that valuable data,” Poe notes. “Consider placing a free credit freeze with each of the three nationwide credit reporting agencies (TransUnion, Equifax, Experian) to help prevent fraudsters from opening new accounts in your name.”

While contacting the agencies online is quick and convenient, you can also call them. You can reach the bureaus at the following numbers:

• Equifax at (888) 298-0045
• TransUnion at (888) 909-8872
• Experian at (888) 397-3742.

Your Legal Right to Freeze Your Credit

For Identity theft protection, by law, the credit bureaus must:

• Put a freeze in place within one business day of a request.
• When asked to lift a credit freeze (by phone or online), the credit bureaus must do so within 1 hour
• The agencies have up to three business days to act when requests are made by mail

Dispute Errors and Contact Authorities

Identity theft and credit card fraud are crimes and should be treated as such. Victims should file a report with the Federal Trade Commission and contact their local law enforcement agency.

“TransUnion can block fraudulent information from your credit report,” says Poe, “if you send a valid identity theft report, proof of your identity, and a letter that identifies the fraudulent information on your credit report.”

• Poe’s pro tip. Keep records of your communications with all parties throughout the recovery process. Be sure to follow up with companies you’ve been in contact with as they investigate your fraud claims.

Check For Identity Theft on Your Credit Regularly

“While there’s no specific rule of thumb regarding how often someone should check their credit report,” Poe says, “those with specific goals would do well to review them more frequently.”

• Check your report often
• Once a year at a minimum
• More often, if you are working to build your credit, make a major purchase, or have been a victim of fraud

Remember, you can get a free copy of your credit reports every week at www.annualcreditreport.com. Those who use SavvyMoney have free daily access to their credit score and full credit report through their online and mobile banking.

With reporting by Casandra Andrews