8 ways an identity protection benefit can positively impact employees’ credit scores

For victims of identity theft, the damage can extend far beyond emotional turmoil and stress. It can also delay major life purchases and create long-term financial stress. And these challenges are often caused by damage to credit scores, a common problem caused by identity theft. Credit score damage can make it harder to rent an apartment, get a loan for a home, open a credit account, and more, which can create a significant barrier to someone’s financial and life goals.    

For employers, offering an identity protection benefit can help employees recognize threats, respond faster, and protect their credit scores and their financial future. 

An effective identity protection benefit has the tools that can help employees protect their credit, identify suspicious activity, and reduce identity theft from threatening their financial future.  

1. Credit monitoring helps detect problems early 

One of the most valuable features of an identity protection benefit is credit monitoring. By monitoring credit files and alerting employees to changes and suspicious activity, organizations can help employees spot suspicious activity before it impacts their financial health. Early detection can help employees: 

• Identify unauthorized accounts 

• Catch reporting errors quickly 

• Dispute fraudulent activity sooner 

• Minimize damage to their credit scores 

When potential issues are identified earlier, they may be easier to resolve— whether a criminal has stolen an identity or not. If someone recognizes suspicious activity, they can take action before any damage is done. And if identity theft has already happened, catching it earlier can help stop the identity thief in their tracks and help limit further damage from happening, including future identity theft incidents.   

2. Financial account monitoring may help reduce credit damage 

While some signs of identity theft are obvious, such as fraudulent accounts or loans, other signs are more subtle—like unauthorized transactions on a financial account, which can often go undetected.  

Addressing these issues early may help prevent missed payments, overdrafts, charge-offs, and other events that can negatively affect credit scores. 

Monitoring these accounts, such as credit cards, bank accounts, and other financial assets, can help employees detect: 

• Unauthorized transactions 

• Account takeover attempts 

• Suspicious transfers 

• Potential fraud activity 

3. Early intervention may help stop problems from snowballing 

The damage from identity theft can cause a ripple effect throughout a victim’s life—emotional turmoil, heightened stress levels, and worst of all, further financial damage.  

These financial problems can come in many forms, including: 

• Overdraft fees 

• Missed bill payments 

• Collection activity 

• Increased debt utilization 

Identity protection tools may help employees address threats before they develop into larger, more expensive issues that can affect both their finances and credit scores. 

4. Dark web monitoring identifies exposed credentials 

Data breaches are a common source of identity theft. When credentials or information are exposed, they are often sold on the dark web for criminals to purchase and use in identity theft schemes.  

When stolen credentials, Social Security numbers, or financial information appear on criminal marketplaces, dark web monitoring can provide an early warning. This gives employees time to: 

• Change passwords 

• Secure accounts 

• Add fraud alerts 

• Freeze credit if necessary 

Early action can help reduce the likelihood of identity thieves opening accounts in an employee's name. 

5. Social media monitoring can help identify account takeover activity 

Social media accounts often contain a surprising amount of personal information that fraudsters can use to impersonate victims or answer security questions. When employees receive alerts about unauthorized access or suspicious activity, they can take action that may help prevent criminals from gaining access to sensitive financial accounts or personal information that could be used to commit identity theft. 

6. Tax fraud monitoring can help reduce financial disruption 

Tax-related identity theft continues to be a significant concern. In fact, there are over 500,000 tax-related identity theft victims awaiting resolution from the IRS, which can take about 20 months.  

Criminals may use stolen identities to file fraudulent tax returns and claim refunds before the legitimate taxpayer files. This can delay refunds, create administrative challenges, and increase financial stress. Monitoring and alerting capabilities allow employees to respond quickly and contact the appropriate agencies before fraud leads to more serious consequences. 

7. Financial reimbursement can help protect finances 

Even with strong preventive measures, identity theft can still occur through incidents like data breaches, where a victim’s information ends up in the hands of criminals through no fault of their own.  

Comprehensive identity protection solutions often include reimbursement coverage for eligible expenses and losses related to identity theft. This financial safety net can help employees manage more quickly and reduce prolonged financial hardships that could affect their long-term financial stability.  

Reimbursement for identity theft expenses and losses can also protect credit scores by protecting a person’s finances. If someone is experiencing the financial fallout of identity theft, they may be unable to make rent or credit account payments, which can damage their credit score.  

8. Dedicated restoration specialists can accelerate recovery 

Recovering from identity theft can be complex and time-consuming. Whether it’s taking the right steps after the incident, filing the right paperwork, or contacting authorities, having the right guidance is critical. Some identity protection programs provide access to trained restoration specialists who help manage the recovery process, including: 

• Disputing fraudulent accounts 

• Coordinating with creditors 

• Addressing credit bureau issues 

• Completing required documentation 

Faster resolution helps reduce the likelihood that identity theft will continue affecting an employee's credit and financial wellbeing. 

To learn more about how Allstate Identity Protection can help enhance employee wellness and protect your teams from modern threats, contact our sales team.