Identity theft is similar to car accidents. You can do a lot to help avoid the issue, but because you don't control everyone else, you can't make yourself 100% immune. Someone might put the effort in to be an excellent, safe driver and still be hit by someone who is not as careful, for example. And you can take proactive approaches, such as using strong passwords, protecting your personal information and educating yourself on what to look out for and still fall prey to a very clever scammer.

According to a 2020 Identity Fraud Study by Javelin Strategy and Research, there were 13 million identity theft victims in 2019 and the amount people lost due to fraud rose 15%, to $16.9 billion. Whether you've just discovered that your identity was compromised or are working to create proactive defenses, it's important to understand what to do for your credit score after identity theft.

How Does Identity Theft Impact Your Credit Score?

Identity theft can be a negative influence on your credit score because it typically involves someone spending your money or running up debt in your name. Either way, the results can be a negative payment history or increased credit utilization, which can drive down your score.

For example, if someone uses your personal information to tap into your bank account, they might steal the cash you have on hand. That can leave you struggling to pay your own debts, and if you miss any payments or end up delinquent on an account, your credit score takes a big hit.

In other cases, a fraudster might use your personal information to open new credit in your name, running up charges and never making any payments. Those missed payments and delinquent accounts — on top of the extra debt — also bring down your score.

Tips for Positively Impacting Your Credit Score After Identity Theft

From getting on top of the issue as early as possible to understanding your rights under the Fair Credit Reporting Act, there are many things you can do to recover your financial reputation after identity theft. Here are some things to do regularly even before an issue as well as actions to take after the fact.

1. Keep an eye on your accounts regularly.

Recovery from identity theft is typically faster and easier when you catch issues as soon as possible, and one way of doing so is keeping an eye on your accounts. Consider signing up for online access to your checking, savings and credit card accounts. Check your balances, charges and statements at least once a week to ensure there is no suspicious activity. If you do notice something, contact your bank or lender immediately.

2. Check your credit reports and score as often as possible.

Consider monitoring more than your existing accounts, though. Check your credit regularly so you find out sooner whether someone is opening accounts in your name. One way you can check your credit or see your score is to see if you get a free credit score on your credit card statement. Some credit card companies also provide certain account holders with a credit score in a mobile or online account as a perk.

3. Contact relevant creditors, banks and other companies.

If you find suspicious information when reviewing your accounts or credit — or you have any other reason to believe you've been the victim of identity theft — contact the relevant creditors, banks or other companies immediately. This can help reduce the damage to your accounts and your credit. Some companies to contact, and what they can do, include:

• The bank for your checking or savings account. It can shut down debit cards and issue new ones, put fraud alerts on your accounts or even help you close a compromised account and open new ones.

• Credit card companies. They can also shut down cards and issue new ones and help you triage damage to your account. In many cases, credit card companies offer 0% fraud protection, which means you're not liable for fraudulent charges as long as you report them as soon as possible.

• Other service providers, including those helping you with retirement and investment accounts, as you may want to add protections, change passwords or move money to protect it.

4. Ensure fraudulent accounts in your name are closed.

Scour your credit report to discover any accounts opened in your name that you didn't authorize. Watch your incoming mail for statements or bills related to such accounts. As you gather this information, contact the organizations in question and let them know that someone stole your identity and used it to create the account fraudulently. Ask them to close the account, and follow up by checking your credit report to make sure it happens.

Some businesses might require documentation that backs up your statement. You can file an identity theft report with the Federal Trade Commission and use a copy of that report as documentation. The FTC also provides a sample letter you can use for this purpose.

5. Dispute inaccurate negative items on your credit report.

You have a right to a fair and accurate credit report under the federal Fair Credit Reporting Act. If you find information on your report that's not true, including information that occurred because of fraud, you can dispute it.

Disputing inaccurate information on your credit report typically involves writing a dispute letter. In cases of fraud, you want to ask for the information to be "blocked." The FTC provides a sample letter for doing so, along with the address for each of the major credit bureaus. You need to send a letter to each of the bureaus that are reporting the fraudulent information. Consider including a copy of your credit report with the relevant information circled as well as a copy of the FTC identity theft report you made.

Getting that negative information off your report can make a big difference to your score.

6. Contact other appropriate agencies as necessary.

Decide what other reports you want to make about the fraud. For example, it may be a good idea to report the issue to a local police department.

You should also determine whether you think any of your other information might have been compromised. If you think your Social Security number has been compromised, contact the SSA.

It's also a good idea to reach out to various service and benefits providers, including insurance companies, government benefits providers, utility and phone companies and others to ensure that your accounts are in good standing and to let them know you have been a victim of identity theft. They may have protections or assistance options to offer you to keep negative items from impacting your credit in the future due to this issue.

7. Continue to manage your own finances responsibly.

Finally, once you have taken all the steps to clean up any negative items related to fraudulent activity and have protected your future credit score, focus on rebuilding credit or maintaining a good score. Some things you can do to positively impact your score anytime — including after identity theft — include:

• Paying your bills on time. Timely payments is the biggest factor in your credit score, so it's important to manage finances well so you can make them.

• Keep credit utilization low. How much of your revolving credit limit you're currently using is the next biggest factor in your credit score. Avoid running up your credit card balances to keep this figure low.

• Manage a good mix of credit. Your credit score is typically at its best when you have both installment and revolving accounts open.

• Keeping inaccurate items off your report. Mistakes happen, and even if you aren't currently dealing with identity theft, it's a good idea to check your credit reports and dispute negative items that aren't accurate so they don't drag down your score.