Asked on Reddit: My Parents Ruined My Credit. How Can I Fix It?

A Redditor recently asked how to recover after their parents did a number on their credit score.

The original poster shared that while on break from college, they discovered a letter from a collection agency addressed to them. It referenced an unfamiliar unpaid account.

They soon learned their parents had taken out multiple credit cards in their name without permission to help cover household expenses. Their parents had allegedly charged thousands of dollars in debt, left it unpaid, and now the collections agencies were calling.

The Redditor wanted to know: What’s the best way to rebuild and protect credit in the wake of this kind of experience?

“It’s very under-reported due in part to the victim not wanting to get their family member in trouble,” says Betz-Hamilton, who is also an associate professor at South Dakota State University.

Victims often feel a heightened sense of shame and embarrassment, she adds.

The good news is you can recover from familial fraud, although it can take years. Here are five steps experts recommend.

Betz-Hamilton suggests freezing your credit as soon as you realize your identity has been compromised. If you need to apply for a new credit account yourself, you can temporarily unfreeze it.

In addition to freezing credit, filing a police report gives you evidence to share with lenders and the credit bureaus that your identity was stolen, which makes it easier to contest the fraudulent charges.

This part can be really hard, but it’s an important step in order to prove that you have been a victim, says John Ulzheimer, a credit expert.

“You have to rat out your parents,” he says. “It requires some courage on behalf of the victim.”

From there, you contest the fraudulent accounts with both the credit bureaus and the lenders.

Doing so will initiate an investigation, Ulzheimer explains. Adding relevant evidence such as providing the police report will increase the chances that the fraudulent accounts will be removed from your account — but a positive outcome isn’t a given.

In some cases, the investigation might determine that you are responsible. That’s because there could be “credible connections” between your identity and the accounts, especially if they were used for household expenses at your address.

“All creditors have different policies and procedures in terms of how they investigate fraud claims,” he explains, and the investigation can result in either the debt being removed from your credit report or remaining in place.

Opening up a secured credit card, making on-time payments to existing accounts and keeping your credit utilization under 30% can all help.

“It can be a long and frustrating process,” Betz-Hamilton says.

Betz-Hamilton recommends taking care of your well-being during the tough time. “The emotional effects of familial identity theft are often more profound than the financial effects,” she says.

A mental health counselor, social worker or therapist can aid the recovery process.

“Finding that supportive network of trusted others — friends and family that are not part of the identity theft, or professionals you can trust — that is critical,” she adds.

Reddit is an online forum where users share their thoughts in “threads” on various topics. The popular site includes plenty of discussion on financial subjects like identity theft, so we sifted through Reddit forums to get a pulse check. People post anonymously, so we cannot confirm their individual experiences or circumstances.