Credit Scores and Reports

Steps to take when a family friend steals your card


When someone you know fraudulently uses your card and racks up big debt, you have to file a police report in order to clear up your credit

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Dear Opening Credits,
I am writing because I don’t know how to proceed. I checked my credit report and found out my card was used by a close friend of the family in New York. I moved out of New York many years ago and did not use the card since then, so I forgot to change my address and was not getting the statements.

I checked my credit report and found out someone used my credit card and was paying it on time. Somehow he linked his bank account to the card so he can make the payments, but my credit card has a credit limit of $9,000 and so far he has used $8,000. But with the 19.99 APR and only paying the minimum, he will never finish paying it.

I called the bank and canceled the card, which this “friend” used for clothing, MetroCard, paying his cellphone bills and restaurants and some other purchases. I would like to file a police report, but I really don’t know how to proceed. I have kept text messages and emails going back and forth showing he admitted to making those purchases without my authorization. How do I proceed? This is damaging my credit even though he is paying, but I didn’t authorize these charges.  — Melissa


Dear Melissa,
A crime occurred and you absolutely must report it to the authorities. First, call your local police or sheriff’s department, then the one in New York where the identity thief operated. Ask to be connected to the fraud division and provide each with the details about your situation. You’ll be provided with a case number; request that complete reports be sent to you.

After that, contact your credit card company. Most have special phone numbers to report lost or stolen credit cards.

Explain what happened and be exceptionally clear that you must be absolved of all fraudulent charges as per the Fair Credit Billing Act, a federal law that limits your responsibility for unauthorized charges to $50. Ask the card issuer to also stop reporting the incorrect information to the three consumer credit reporting agencies (TransUnion, Equifax, and Experian).

Until the fraudulent account information is removed from your reports, credit scores are calculating it into the algorithm, causing them to sink. Although the crook paid the card on time (not to be responsible, I’m sure, but so he could continue to charge), he nearly maxed it out. Credit utilization is a major scoring factor, so such a large balance is hurting your numbers. The lower your credit utilization, the better it is for your score, so an $8,000 debt against a $9,000 limit is doing serious damage. However, once that false activity is gone, your scores will revert to what they should be.

But wait, you’re not done yet! You’ll also need to add fraud alerts to your credit files. Do it with one of the credit reporting agencies and that bureau will notify the others. A fraud alert will prompt creditors to contact you before increasing an existing line of credit or granting a new loan or credit card. You have a choice between a 90-day alert and one that lasts for seven years. Since this person is forging your signature now, he may continue to try for a long time, so go for the longer one. It requires proof of the fraud (thankfully you have plenty) and that police report.

After you inform the bank of the crime and tell it to stop sending the fraudulent activity to the credit reporting agencies, follow up. You may still have to take the extra step of disputing the inaccuracy. After about a month, pull your reports to see if they’ve been updated (you can do for free at If they haven’t, get assertive. Call the bank again to insist it takes the proper action, but also prepare to dispute the matter with the credit reporting agencies. The Fair Credit Reporting Act stipulates that only accurate information may be listed.

Disputing by mail is best. The Federal Trade Commission has an excellent resource online titled “What to do if your identity is stolen.” It includes a sample letter that you can use as a template. Modified for your circumstance, it should go something like this:

“I am a victim of identity theft. I want to dispute certain information in my file resulting from the crime. I have circled the items I dispute on the attached copy of my credit report. The items I am disputing do not relate to any transactions that I made or authorized. Please remove or correct this information at the earliest possible time. As required by section 611 of the Fair Credit Reporting Act, I am requesting that the item be removed to correct the information.”

Include a copy of the police report and your credit report with the errors clearly marked. Send everything certified mail, return receipt requested. The agency then has 30 days to investigate, and afterward will send you a letter with the result plus an updated report.

If all this seems like a lot of long, arduous work, you’re right. Yet the alternative is being stuck with a massive bill that is expensive and damaging your credit rating. So take a day off and deal with this now!

See related:What to do when family members use your credit card without permission

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