Id Theft - Cost of Restoring Your Lost Identity

When your identity is stolen, the costs that are associated with clearing your name can be overwhelming both in terms of money and stress. Clearing your name can take months, and in some cases, even years. As if that wasn't stressful enough, consulting legal advice to quickly correct your situation may even take toll on your wallet. And let's not forget how time-consuming all of this can be.

But like most things in life, identity theft isn't the end of the world. There are ways to restore your credit history without breaking the bank or driving yourself mad. Here are some costs associated with identity fraud to help you become aware of what to expect.

Cost: Emotional

Like most crimes, ID theft is a violation that can have mental implications. For most victims, there's an emotional impact because it often directly affects their lives and those around them. Emotions like betrayal and anger are common, and prolonged feelings of distrust and instability can lead to stress for any length of time.

One of the best ways to overcome these feelings of anxiety is to realize that you're not alone. Unfortunately, ID theft and fraud are more common than you think, but because of this fact, there are support groups to help you through the difficult emotions.

Cost: Financial

There are several reasons for identity theft such as using someone's credit history for employment or business, posing as another individual to hide from crimes, and most commonly, for financial gain. Studies have shown that ID fraud in the U.S. costs individuals several billions of dollars each year.

It can be something as small-scale as cashing a check using forgery or as complex as hacking into your savings account via the internet. Regardless of how it's done, it can cost you dearly by rendering you unable to pay the rent, take that vacation or make a large purchase.

Depending on the complexity of the situation, some victims will consult legal services to try and help recover their losses. By the time they've reclaimed their money, they'll have spent thousands on attorney fees.

Risk prevention is the best way to avoid ever having to deal with the financial costs of ID theft. The US Department of Justice lists a basic framework of steps to take to avoid becoming a victim here.

Cost: Credit

They say that money can be replaced, but your credit history is priceless. One of the biggest scars left from identity theft is that of a tarnished credit history. Years and oftentimes decades of good credit history can be tainted by credit fraud, and this can take a long while to rebuild.

The key, however, is that your credit history is able to be rebuilt. Taking measures like not taking out loans, paying your bills on time, making sure your credit report is clean every year and paying off balances can help to restore your credit.

Cost: Time

The one thing that most of us don't have enough of besides money is time. The time that is spent on following up on your case and coming to a resolution can be months, and for some, even years. Filing police reports, closing your accounts, getting new bank cards issued, monitoring your credit report on a regular basis, maintaining close watch on your claim – all of these things can shave off precious hours on a weekly basis.

But there are ways to help streamline your situation, and prevent more glitches that will only delay a resolution. The best way is to stay organized, document every communication with all organizations involved, and remain persistent. Restoring your credit is your sole responsibility, and it's up to you to stay patient and determined.

Cost: Trust

After your money has been recovered and your credit history restored, one of the lingering impacts of identity theft is distrust. Victims often live in fear of people, institutions and repeat incidents. It can take years to build the trust back up and some victims may alter their lifestyle in order to prevent it from ever happening again.

Keeping your life simple is the best for identity theft prevention. Cut up credit cards you don't use, close stale accounts, and use cash when you can. By keeping things simple, you'll help protect yourself from another incident.