Loans Fraud
Getting a Loan After Identity Theft

Loans Fraud: Getting a Loan After Identity Theft

According to the Bureau of Justice Statistics, 10 percent of households in the United States had at least 1 person age 10 or older who was a victim of identity theft in 2016. This amounts to approximately 8.6 million US households that were affected by identity theft during 2016 alone. Thus, you are not alone if you’ve suffered at the hands of an identity thief.

Identity theft will likely damage your credit score. Let’s take a look at what could happen to your credit score and how you may be able to get a loan afterward.

How Identity Theft Affects Your Credit Score

Credit Inquires

An identity thief may use your name to apply for credit. For example, he may apply for a few credit cards in your name.

Each time the thief applies for credit in your name, the creditor will search your credit report. If this is done often, your credit score will begin to decline. This is because future creditors will believe that you have applied for a lot of other credit, which may raise suspicions that you are having financial problems.

Unpaid Bills

An identity thief may rack up bills for utilities, mobile phones and/or other items in your name. Of course, he or she has no intention of paying these bills. Eventually, the providers in question will report these unpaid bills to the credit bureaus, which will reduce your credit score.

Loans and Credit Cards

If Joe Thief has taken out a few credit cards or loans in your name, he or she won’t pay them back. That $5,000 shopping spree at an electronics store may be great for the thief, but it will end up on your tab in this case. Eventually, the unpaid credit card bill will hurt your credit score, as the credit bureaus will be notified.


Do you love talking to debt collectors? Probably not – but you’ll likely receive some calls from them if you are a victim of identity theft.

If the thief has been at it for a while, the debts may be handed over to collections agencies. This will have a damaging effect on your credit score and you’ll probably want to throw your phone in the trash, as well!

Getting a Loan After Identity Theft

If Joe Thief has trashed your credit score, a traditional bank probably won’t work with you. It will view you as a risk and will probably want to wait until you’ve cleaned up your credit report.
You may have to turn to the alternative loan market for your borrowing needs. A viable option in this regard is a car title loan. A car title loan is a loan that is based on the value of your vehicle. Basically, you can take your vehicle’s title and a few other items to a car title lender, get a loan fairly quickly and be on your way.

The interest on a car title loan will probably be higher than a bank would offer. However, car title lenders often do not require a credit check, meaning that you’ll have a much better chance of qualifying than you would at a bank.

A car title loan probably won’t seem as appealing as a bank loan – but it will be a much more realistic option at this point. After all, what good is a lower interest rate on a bank loan if a banker turns you away?

The Bottom Line

As a victim of identity theft, it could take quite a while before your credit is fully repaired. In the mean time, consider the alternative loan market – including car title loans – for your borrowing needs. Be sure to take out just enough to pay your relevant expenses and pay your loan back properly to help keep your credit afloat.