Every year, identity theft strikes tens of millions of Americans, causing billions of dollars in losses. These incidents also bring victims immeasurable anxiety, hassle, and loss of valuable time. The best way to combat identity theft is to avoid it altogether, but if you or a loved one has suffered a loss, it is crucial to know what to do afterward.

Here are seven things you should do as soon as possible after discovering an identity theft incident.

1. Place a fraud alert on your credit report

You have the right to place a fraud alert on your credit report. When a fraud alert is in place, lenders must verify your identity before processing any loan or credit card application. This prevents criminals who have stolen your personal information from obtaining credit in your name and damaging your credit score when they fail to repay.

Placing a fraud alert with any of the three major national credit bureaus will automatically notify the other two to also place the alert. So if you request a fraud alert from Experian, Equifax and TransUnion will follow suit.

An initial fraud alert is valid for one year. You can remove a fraud alert at any time by notifying each credit bureau individually.

You also have the right to request an extended fraud alert, which lasts for seven years, but requires proof that you have filed an identity theft complaint with law enforcement (see below), or to add a security freeze or credit lock at each credit bureau to further restrict access to your credit report.

2. Report identity theft to the Federal Trade Commission

Use the Federal Trade Commission website IdentityTheft.org to file a theft report. The interactive form asks questions about your incident, guides you to appropriate resources based on your answers, and generates an Identity Theft Victim's Complaint and Affidavit, which you can submit to law enforcement agencies and use to place an extended fraud alert on your credit report.

3. Review your credit reports

Check your credit reports from the three major national credit bureaus for signs of unfamiliar accounts or credit applications. Each account listed on your credit report should include contact information for the creditor so you can inquire about any suspicious records. When appropriate, notify the creditor that the activity was unauthorized and ask them to investigate.

After alerting all creditors to potential fraud, note that you have the right to dispute information on your credit report with each credit bureau. Filing a dispute means you are asking to have unauthorized activity and accounts removed from your credit report.

4. Assess the damage and report fraud

Unfortunately, one identity fraud incident may just be the tip of the iceberg. Once criminals have your personal information, they may attack you on multiple fronts and/or sell your credentials to other scammers on the hidden "dark web". If you have been a victim, be sure to watch for signs of other fraudulent activity and report as appropriate:

Review bank and credit card statements for unauthorized transactions. Unrecognized charges and withdrawals are clear signs of potential problems, but unexplained credits and deposits can also indicate trouble. Sometimes, scammers deposit small amounts to verify your account information before attempting larger withdrawals. Regularly check your accounts for any unrecognized charges and report any suspicious transactions to your financial institution or lender as soon as possible. First, however, make sure the transactions are not authorized ones with businesses using unfamiliar names or third-party payment processors.

Check the dark web for your personal information. Credit monitoring services, such as those offered by Experian Premium membership, can search the dark web for your email address, Social Security Number (SSN), passwords, and account information, and alert you to potential breaches. Carefully review the status of each account, change passwords, and notify the account issuer as needed if evidence of fraud or theft is found.

Check your Social Security account. Misuse of your Social Security number can cause major problems, as it is tied to your credit report, federal income taxes, and government retirement and health benefits. Check your Social Security account (you can register for a free account if you haven't already) for signs that your benefits have been diverted.

Check your personal account with the Internal Revenue Service (IRS). A common use for a stolen Social Security Number (SSN) is to impersonate a victim and claim a federal tax refund. Check your personal online account with the IRS to ensure no one has tried to file a tax return in your name. If you don't have an IRS online account, you can create one in minutes. If you can't access an existing account, or are told an account already exists when trying to create a new one, someone may have stolen your tax information, and you should contact the IRS to investigate.

5. Contact your creditors and financial institutions

If you believe someone has opened a fraudulent account in your name or discover transactions you did not authorize, notify your creditors and financial institutions immediately. The sooner you notify them, the sooner the institution can begin an investigation, stop future fraudulent transactions, and, where appropriate, consider recovering stolen funds or reversing unnecessary fees incurred due to the fraudulent activity.

6. Notify appropriate state and federal agencies

Identity theft and identity fraud take many forms, and it is important to report the crime to the appropriate law enforcement agencies based on the type of crime you have experienced. In addition to the agencies listed below, you should notify the appropriate law enforcement agency and provide them with a copy of your FTC complaint and affidavit. This helps them coordinate appropriately with state and federal agencies.