What to Know About the Effects of Identity Theft

A woman sitting on the couch looks at her phone in a dark room.

The effects of identity theft can last anywhere between a few days and several years, depending on the type of theft and how quickly you notice and address it.

Identity thieves can gain access to your information in any number of ways. And while there are plenty of ways to reduce your exposure, it's impossible to immunize yourself against it completely. As a result, it's important to understand how identity theft can affect you and what you can do to recover more quickly if it happens.

What Are the Effects of Identity Theft?

Depending on the type of theft that occurs, you could be affected in several ways. The least tangible but potentially the most damaging is the emotional toll. When someone commits identity theft, they literally assume your identity.

They can then do any number of things in your name, including opening new credit accounts, filing a fraudulent tax return, committing other forms of fraud and more.

Being victimized in this way can leave you feeling violated, anxious and unsafe. In some cases, it can be difficult to prove that the identity theft occurred, giving way to anger and frustration. The stress can even take a toll on you physically.

For example, a study by the Identity Theft Resource Center found that 41% of identity theft victims experience sleep disturbances, and 29% develop other physical symptoms, including aches and pains, heart palpitations, sweating and stomach issues.

Other potential effects include:

  • Damaged credit: If an identity thief steals your Social Security number (SSN), opens new accounts in your name and never pays, it could ruin your credit history. Not only can this impact your ability to get credit, but it can also hurt your job prospects and increase your auto and homeowners insurance premiums.
  • Tax debt: If someone assumes your identity through your SSN on job applications and doesn't pay their taxes, you could end up with a hefty bill. It's also possible for a fraudster to file a return in your name, submitting erroneous information to get a refund and leaving you to deal with the aftermath.
  • A criminal record: If someone uses your identity to commit other crimes and gives your information to police when they get arrested, you could be the one to end up with the rap sheet.
  • Lost time and money: It can take years to recover from identity theft, and you may lose money in the form of expenses incurred by the identity thief, time off work and more.

How Long Can It Take to Recover From Identity Theft?

The recovery time for identity theft can vary widely, depending on the type of fraud that occurs. With credit card fraud, for instance, where someone uses your credit card without your permission but doesn't get access to more sensitive information, it may just be the amount of time it takes you to report it and get a new card in the mail.

With more serious forms of identity theft, however, it can take much longer. If someone steals your SSN to open a credit account in your name, for instance, it can take months to work with the creditor and credit reporting agencies to dispute it and prove it wasn't you.

And if someone manages to use your identity to incur tax debt and commit other crimes and major violations, it could take years of work to undo the damage.

How Identity Theft May Affect Your Credit

As previously mentioned, identity thieves may use your SSN to commit what's called new account fraud, where they open unauthorized credit accounts in your name. In most cases, it may be a credit card or loan, but it can also be a cell phone plan or utility account.

If the thief succeeds in opening the new account and doesn't make payments, it could wreak havoc on your credit history, making it difficult to get approved for credit, get a job, qualify for low insurance rates and more.

Recovering from these effects can take time, but it is possible to work with creditors and the credit reporting agencies to set the record straight.

How to Recover From Identity Theft Faster

The time it takes to recover from identity theft not only depends on the severity of the fraud, but also on how quickly you spot it and the time and effort you put into addressing it. Here are some tips to help:

  • Learn to recognize the signs: It's not always possible to find out how the thief gained access to your information, but signs that the fraud has occurred can include notifications of unauthorized purchases, incorrect information on your credit reports, denial of credit, unexpected credit card, loan or tax bills, and a failed background check. If any of these happen, take it seriously.
  • Get help: Taking down a criminal on your own may sound Hollywoodesque, but you're better off enlisting the help of people who have the right tools. For starters, report the crime to local law enforcement, the Consumer Financial Protection Bureau and the Federal Trade Commission. Also, request assistance through Experian, one of the other credit reporting agencies (Equifax or TransUnion), or an identity theft protection service.
  • Add a fraud alert or freeze your credit reports: You may be able to stop an identity thief in their tracks by restricting their ability to use your SSN to open new credit accounts. With a fraud alert, creditors will typically flag any application with your SSN and call a number you provide in the alert to verify your identity. A credit freeze, on the other hand, stops all creditors from being able to view your credit reports entirely.
  • Don't let up: Reporting identity theft is just the first step of the process. As you work with creditors, the police and credit reporting agencies, it's critical that you be your best advocate and stay on top of the process until it's resolved.

Take Steps to Prevent Future Identity Theft

Dealing with the effects of identity theft can be mentally, emotionally and physically exhausting. Whether you've already been victimized or you just want to be prepared, it's important to do whatever you can to reduce the risk of future identity theft. Here are some ways to protect your information:

While these efforts won't eliminate the threat of identity theft entirely, they can do a lot to limit your exposure.