Pay Dirt

My Entire Credit History Disappeared Overnight

No one seems to know what to do about this.

Man with a name tag that says DAN attached to his forehead.
Photo illustration by Slate. Photos by Getty Images Plus and Spoon Graphics.

Pay Dirt is Slate’s money advice column. Have a question? Send it to Athena and Elizabeth here(It’s anonymous!)

Dear Pay Dirt,

Back in May, I legally changed my name, including reporting the name change to the Social Security Administration. (For the record, my Social Security number did not change.) Once that was done, my understanding was that the change would be reported to the various credit bureaus, and my existing credit records would simply be updated with the new name, and continue to reflect all of my credit history.

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Well, turns out that’s not at all what happened! Apparently once my change went into effect with the SSA in June, it effectively “reset” my credit record. The only things listed on it now are two credit cards that I’ve updated my name with. I have two current loans that still have my old name (and for which it’s apparently a huge issue to update my name, if not impossible), which aren’t getting reported due to the name discrepancy. Not to mention the 20-plus years of credit history which has effectively disappeared from my account (student loans that have been paid off, previous credit accounts that have since been closed, etc.). It’s not all a loss, though, as even a Chapter 7 bankruptcy that I declared in 2018 has disappeared.

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At this point, no one seems to know what to do about this. I’ve talked to the various credit bureaus, and they’ve all basically thrown up their hands at this point. So, am I stuck with effectively rebuilding my credit record? I have some negative items in my history, but I’ve made it a priority to rebuild my credit record over the last several years, and my scores with the three bureaus now all range from 710 at the lowest to 770 at the highest. (Well, they did before this boondoggle—who knows what they are now.) Even with the bankruptcy on my report, I suspect I’d be better off with my full credit history than the bare-bones two years that are currently showing up. It’s estimated around 50,000 people change their names every year!

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—How Is This Hard?

Dear How Is This Hard,

How frustrating! Building your credit score back from a bankruptcy, or just financial setbacks in general, is hard work and it probably feels defeating to have “lost” it. Unfortunately, just changing your name with the Social Security Administration is not enough. Yes, you do still have the same Social Security number, but now all of the agencies on your credit report, both good and bad, are confused about your identity. Your Social Security number is no longer matching up with your date of birth or old name, which is why it’s not showing up on your credit report.

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If you haven’t done so already, make sure you have filed your name change with the state in which you live. You may have to go to your local courthouse to file the forms. Next, make sure your name has been changed on any identification you have such as a driver’s license and passport. You’ll also want to make sure your name has been changed with all of your financial accounts, employer, and any insurance companies.

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After this has been done, pull your credit report under your old name and go through it to see what accounts are still active, like your loan providers, and contact them to change your name. You will need to submit the legal documentation to push them along. Eventually, everyone will start to recognize your new name and your credit report will be more accurate. Since bankruptcies are filed with the court, this should eventually transfer over as well. When applying for any new credit, make sure they use your new and old last name so they will have accurate information in making their decision. Hope this helps!

Dear Pay Dirt,

My partner and I purchased a fixer-upper in December. The purchase price for the house was about $200,000 under our budget, but we estimated it would need about $200,000 of renovations to make it livable, so we figured it would all come out roughly even. We’re extremely lucky that a recent inheritance meant we could pay for the renovations in cash, but our plan was to get a home equity loan or construction loan for the renovation costs, given the super low interest rates.

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Unfortunately, once we started the renovation process, it was clear that the timelines weren’t going to work. We needed to start paying for renovations in February to get the project at least somewhat finished before our move-in deadline in April, but when we started reaching out to home equity loan providers in January, we were told the loan process would take at least four months. We paid for the renovations in cash. While I’m grateful we had the cash to make the work happen on schedule, I’m bummed that the inability to get a loan for the work means that in the long run, we’re taking a substantial financial hit (I had planned to invest that $200,000). When we started the homebuying process, we made a spreadsheet with various purchase/loan/cash options, and we literally ended up with the worst long-term option.

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At this point, is there any way to retroactively get a loan or something else to recoup those losses?

—This Is Fine, but Not Great

Dear This Is Fine,

I completely understand why you are in your feelings about using your cash reserve to make home improvements instead of a home equity line of credit, or HELOC, loan. You are lucky to have had the cash, but that doesn’t mean it stung any less. I might be missing something, but I believe you are asking if you can take out a loan to invest to try to get your money back in the market.

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You can get a HELOC loan anytime after you purchase your home if you have enough equity and good credit. But it doesn’t take away from the fact that a loan is still a loan and it will need to be paid back. I do not advise you to go into any more debt than is necessary. Do not borrow against your house to invest. Any time you are investing, you need to be committed to keeping your money in it for as long as it’s needed to make a return. This can be up to 30 years.

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I would chalk it up to a badly timed mistake and instead create a bare-bones budget to free up cash. Then once a month, make a deposit into a brokerage account with whatever you’ve saved.

Dear Pay Dirt,

Hi! I took out a small-business administration loan six years ago to purchase a small business. I closed the business last fall (COVID, etc.) and have about $40,000 outstanding on the loan. I’ve been paying the monthly payments plus a little extra ($1,200 payments), as I have since the beginning, and was just going to continue for the next four years until it’s paid off.

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I do have the cash and could just pay the balance, but I’ve been advised that “cash is king” and I should just pay off the loan monthly and hold on to my cash. But won’t my cash become less valuable over the next four years, unless I invest it in something that will grow quicker than my interest payments, and won’t I be paying more interest in the long term? The interest rate is variable (all SBA loans are … which sucks), so it does go up, but that doesn’t affect my payment as I pay more than what is due anyway.

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What should I do: pay fast or pay slow?

—This Advice Seems Old

Dear This Advice Seems Old,

I applaud you for asking this question. Markets and economies change, so what was a hot financial tip last month may be old news today.

I would hold on to your cash reserve and continue to pay off your loan just as you are doing now. I understand the interest rate varies, and while I hate the idea of losing money this way, I hate the idea of you having no cash even more.

It’s important to have quick access to cash, but you still want it to grow, especially with inflation spiking. So make sure to keep a few months of expenses in a high-yield savings account and look into ways to invest the rest. You’re doing great.

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Dear Pay Dirt,

In 2018, I was working with a woman whom I trusted and considered my friend. We would hang out outside of work and share stuff about our personal lives. One day she mentioned a merchant business account she opened and was getting payments from, and asked if I was interested.

Long story short, I fell for it even though I immediately had doubts as soon as the process started. As I’m sure you’ve guessed, it was a scam, although I didn’t find out until late last year, when collections started calling me about almost $20,000 in debt that I had no idea about.

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I am not writing to ask how to get out of this—I’ve accepted that I was a fool who got played, and I’ve learned a serious lesson. What I am wondering is if the woman who scammed me could do it again because she has my information. I no longer work with her or live in the same state, but what can/should I do to make sure she can’t continue opening merchant accounts in my name?

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Originally, I went to multiple meetings to physically sign papers, and I did receive about $7,000 from the account. I haven’t been receiving any mysterious deposits since. Can I assume this was a one and done?

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Any advice would be much appreciated. I can’t let this happen to me again!

—She Got Me

Dear She Got Me,

I know you’re not asking me for sympathy, but I am so sorry that happened.

This might be a one-and-done situation, but you should never assume when it comes to identity theft. If you haven’t already, make sure you’ve completed a Federal Trade Commission identity theft report at identitytheft.gov. After this report has been put into place, place an extended fraud alert.

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An extended fraud alert will mean that businesses must contact you directly before opening new credit in your name and ask for extra verification to confirm your identity. This freeze will be in place for up to seven years or until you remove it, whichever one comes first. You can contact one of the three credit bureaus to place an extended fraud alert and they will inform the other two. You’ve got this.

—Athena

More Advice

I have been married to my husband for 17 long years. I quit working when our second child was a year-and-a-half old. We now have four children and three of them have special needs. I have tried to return to work for the past six years but have been unable to get a job that would pay for child care. I have a master’s degree, but it has not helped me find gainful employment after such a long time as a stay-at-home parent. I want to leave my husband, but I’m worried about how to support myself and my children.

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