In the wake of Equifax's massive data breach, millions of Americans are more worried than ever that their personal information could be used for fraudulent purposes.

The company is offering free credit monitoring for one year to those whose data got exposed, and while it's certainly a good idea to monitor your credit through Equifax or another credit-monitoring service, it's also important to know what to do if you notice an account or credit inquiry that you don't recognize on your credit report.

Person in hooded sweatshirt at laptop computer.

Hackers have stolen the personal information of millions of Americans. Image source: Getty Images.

Stop the damage before it gets any worse

According to the Federal Trade Commission (FTC), the first step to take after you notice that someone else has opened new accounts in your name is to call the companies where the fraud occurred. For example, if you notice that a scammer has used your identity to get a Discover credit card, your first call should be to Discover.

Ask to speak with the fraud department, and explain that your identity was stolen. Ask that they close or freeze the account, and change the logins and passwords for any legitimate accounts you may have with the company. It's a good idea to ask for a letter confirming that they know the fraudulent account doesn't belong to you, that you aren't liable for it, and that the account was removed from your credit report. Before doing this, the credit issuer may want to see a copy of your FTC Identity Theft Report, which I'll discuss in greater detail later in this article.

Prevent any more accounts from being opened

If you notice an inquiry or account that you didn't initiate, the first thing I'd suggest is freezing your credit to prevent even more fraudulent accounts from showing up.

In a nutshell, a credit freeze denies creditors access to your credit report, whether the inquiry is legitimate or not. Since a review of your credit is a basic requirement for opening a new credit account, this makes it next to impossible for a thief to open an account in your name.

You'll need to initiate a credit freeze with the three main credit bureaus individually -- Equifax, Experian, and TransUnion -- and if you're already a victim of identity theft, a credit freeze is completely free. If you need to apply for credit, you can temporarily lift the freeze, but it's important to note that a credit freeze doesn't ever expire -- it stays in effect until you choose to remove it.

Alternatively, you can choose to put a fraud alert on your credit. Instead of blocking access to your credit report, a fraud alert simply requires lenders to take additional steps to verify your identity before allowing you to open an account. Unlike a credit freeze, a fraud alert only requires you to contact one of the three credit bureaus, who is then required to notify the others.

It's also worth mentioning that both of these actions can be used as precautionary measures as well if your identity has not yet been stolen, but you're worried that it might be in the future.

File an identity theft report

Before you start to do damage control, it's a good idea to report the identity theft to the FTC. You can do this online at, and you'll receive an Identity Theft Report that will be very useful throughout the rest of the process.

Essentially, an Identity Theft Report guarantees you certain rights, and can be used to prove to businesses that your identity was actually stolen.

Once you have an Identity Theft Report from the FTC, it can also be a smart idea to file a report with your local police department.

Other damage-control steps

To be clear, not all of these steps apply to every case of identity theft. Having said that, if your identity was stolen, here are some of the steps you may want to take.

One major priority is to get any fraudulent accounts off of your credit report. You can write to each of the credit reporting agencies and explain the situation. Ask each credit bureau to block the fraudulent information, and be sure to include a copy of the FTC identity theft report. Blocking fraudulent information from your credit is one of the rights the report gives you.

If you suspect that your driver's license number is being used fraudulently, you can contact your DMV to report the issue and replace your license.

If someone used your information to obtain utilities, such as electric or cable service, contact the service provider and explain that you're an identity theft victim and ask them to close the account. Since these accounts are generally not reported regularly to the credit bureaus, your only clue may be a credit inquiry from a utility provider.

This is not an exhaustive list, and you can read more account-specific damage-control steps on the FTC website.

If your existing accounts have been compromised

The Equifax data breach also compromised the credit card numbers of more than 200,000 people, who the company says will be notified directly. And if you are notified that your credit card numbers were compromised, my first suggestion would be to call your credit card companies and report the situation, and ask them to issue a new credit card (with a new number).

However, it's also important to know what to do if you begin to see charges you don't recognize on your existing accounts.

Fortunately, this is a relatively painless process, as I can tell you from experience when someone charged about $400 at a dollar store in Kentucky on my American Express card (I have never even been to Kentucky). By calling the fraud department as soon as you spot the unauthorized activity and explaining the situation, you can typically have the charges removed with a single phone call. Ask for a letter confirming the charges were removed.

Be ready if it happens to you

As a final thought, the Equifax data breach shouldn't be a cause for panic. Millions of people have their information compromised in data breaches, and in many cases, no identity theft ever occurs. However, it's important to be prepared by monitoring your credit reports and accounts regularly, and knowing what action to take if you notice anything suspicious.