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The Different Ways Identity Theft Can Impact a Person’s Credit Score


Every year, millions of people are impacted by identity theft, which is a severe problem. This kind of fraud involves someone stealing your credit card details, name, Social Security number, or other personal information and using it for their financial advantage.

While the immediate impact of identity theft may seem obvious—unauthorized charges on your credit card or fraudulent loans taken out in your name—the long-term consequences can greatly impact a person’s credit score.

Here, we will discuss the common consequences of identity theft on an individual’s credit score and how to protect yourself from becoming a victim of this crime.

Impact on Credit Utilization Ratio

One of the first and most significant effects of identity theft on an individual’s credit score is their credit utilization ratio. This ratio is the amount of credit used compared to the total available credit.

When someone steals your identity and starts making unauthorized charges or opening fraudulent accounts, your credit utilization ratio can skyrocket. This is because the thief can access your personal information and use it to take out large loans or max out credit cards in your name.


This sudden increase in debt can significantly lower your credit score, as lenders see a high utilization ratio as a red flag.

Negative Marks on the Credit Report

Your credit report is an extensive credit history summary, including credit card accounts, loans, and late payments. Identity theft can wreak havoc on this report by creating many negative marks that can stay on the report for up to seven years. These include late or missed payments on fraudulent accounts, high balances, and even collections.

These negative marks are damaging because they show lenders that you are not responsible with credit and may not pay back your debts on time. This may increase interest rates, create more challenges in getting credit cards or loans, and, eventually, result in a poorer credit score.

Decrease in Overall Credit Score

With the combination of a high credit utilization ratio and negative marks on your credit report, it’s no surprise that identity theft can significantly lower an individual’s overall credit score. Your score will likely suffer in the interim, as identity theft damage takes months or even years to repair.

A low credit score can affect one’s ability to obtain employment, rent an apartment, or be accepted for a mortgage or auto loan. You must monitor your credit closely and take immediate action if you think identity theft has occurred.

How to Protect Yourself from Identity Theft

Identity theft can have serious negative effects on your credit score, but you can guard against it and lessen its effects if it does occur.


●          Keep an eye out for any unauthorized accounts or strange activities on your credit report regularly. You have the right to a complimentary copy of your credit report from the three leading credit reporting agencies every year.

●          Use strong and unique passwords for all your online accounts, and never share personal information over email or text messages.

●          If you want to be informed of any changes to your credit report or any strange activity, you might consider signing up for credit monitoring.

●          If you think you have been the victim of identity theft, contact your local law enforcement agency and the Federal Trade Commission.

Watch Out!

Identity theft is a crime that can seriously harm a victim’s credit score, among other negative effects. You can protect yourself against identity theft by being watchful and implementing the appropriate safety measures.

Remember that reducing the impact of this kind of fraud on your credit score and financial well-being requires early detection and prompt action. Stay informed, stay alert, and stay safe.