It pays to be careful when guarding your private information but sometimes even the best efforts aren't enough. If you have had your identity stolen and are a victim of credit theft, you need to deal with the situation before it gets worse.

Notify The Credit Bureaus

Immediately contact one of the three credit reporting agencies: Equifax (888-766-0008), Experian (888-397-3742) or TransUnion (800-680-7289). Report that you are a victim of credit theft and ask for a credit fraud alert to be placed. You need to call only one agency and it will report the incident to the other two.

Next go to www.annualcreditreport.com, the only FTC-authorized distributor of free annual credit reports all Americans are entitled to by law. Other websites offer free credit reports as a bonus when you sign up for their credit protection services. While these services may provide valuable security, start with the genuinely free reports from annualcreditreport.com.

Often the fraud alert will stop the thieves but if it shows no sign of abating, you can ask each credit bureau to place a freeze on your credit. Credit theft victims can initiate the freeze for free in most states.

Notify Law Enforcement

Credit theft is a crime and the only way to stop these people is to involve law enforcement agencies.

Report the credit theft to your local police. Give them information on all fraudulent accounts to be included in the report and get a copy of the report to show creditors who may hound you to pay bills you don't owe. Get the name and phone number of the investigating officer so you can provide it to creditors to prove the accounts they have are fraudulent.

Also notify the Federal Trade Commission of the incident. They don't pursue the identity thieves themselves but instead act as a central source of information for identity theft investigations nationwide. They can be reached at 877-438-4338 or by going to www.consumer.gov/idtheft.

Prevent Future Credit Theft

While you can continue to monitor your credit reports, doing so is tedious. Instead, sign up with credit monitoring services such as LifeLock. These agencies monitor your credit for you, notifying you of suspicious activities instantly. This is much better than ordering a credit report every few months, giving thieves plenty of time to open fake credit accounts.

Although you might be tempted to think you are in the clear once the false accounts are opened, in fact some thieves deliberately hold onto your information for months. They know that consumers will stop credit report monitoring after a while, allowing the thieves to use the information they already have to open more false accounts.

It's bad enough when credit theft happens to you once. Don't let it happen a second time. Protect yourself and your finances before it's too late.