OPINION

Stanley Baldwin (“the Defendant”) appeals the sentence he received following his guilty plea to bank fraud. See 18 U.S.C.A. § 1344 (West 2000). He contends that the district court erred in departing upward from the applicable guideline range, based on the finding that the Defendant’s fraud resulted in damage to the credit reputations of his fraud victims. See U.S. Sentencing Guidelines Manual § 2F1.1 (1998). Because we conclude that *193 the district court acted within its discretion, we affirm.

I.

The Defendant was charged with bank fraud stemming out of a scheme that ran from March, 1996, until January, 1998. The fraudulent scheme began when the Defendant received, by mail, a pre-approved credit application in the name of Stanley Britt Baldwin (“Britt Baldwin”), who is unrelated to the Defendant. The Defendant took the credit application to a branch of the United Carolina Bank (“UCB”), 1 and a bank employee inadvertently gave him Britt Baldwin’s social security number. Thereafter, the Defendant used Britt Baldwin’s social security number to obtain credit and financing and to access Britt Baldwin’s bank accounts. 2 The Defendant also used the social security number of his eleven-year-old son, Stanley Baldwin, Jr. (“young Baldwin”), to obtain financing. 3

Sometime in 1996, Britt Baldwin noticed that two checks, which he did not write, had been cashed on his account at UCB. When he challenged the checks, the bank credited his account, and he gave the matter no more thought. Britt Baldwin became concerned when the outstanding balance on his credit report went above $124,000.00. In a sworn affidavit, Britt Baldwin denied responsibility for twenty-four credit entries on his credit reports. Britt Baldwin secured the services of an attorney to restore his damaged credit. However, Britt Baldwin later told investigators that he incurred no direct monetary loss as a result of the Defendant’s activities, except travel to and from his attorney’s office. Moreover, the attorney did not charge Britt Baldwin a fee for the services rendered to restore Britt Baldwin’s credit.

On July 20, 1999, a grand jury indicted the Defendant on seven counts of bank fraud. On April 17, 2000, the Defendant pled guilty, pursuant to a written plea agreement, to one count of bank fraud, in violation of 18 U.S.C. § 1344.

Although the presentence investigation report (the “PSR”) 4 indicated no grounds *194 for departure, the district court gave notice prior to sentencing that it was considering an upward departure “based on harm caused to the victims whose identities the Defendant misappropriated.” J.A. 42. At the sentencing hearing, the court called Joseph Casper, an agent with the United States Secret Service, to testify about the offense conduct. The court engaged in the following colloquy with Casper:

THE COURT: What was the effect upon this Stanley Britt Baldwin? Did he suffer credit—

THE WITNESS: Mr. Stanley Britt Baldwin suffered a lot of trouble. As a matter of fact, when we finally got in touch with Mr. Britt Baldwin he had already obtained the services of an attorney to assist him in trying to get him out of the quagmire of the credit problem that he was in.

THE COURT: It impaired his credit reputation, would that be fair to say? THE WITNESS: Yes, Your Honor, to say the least.

THE COURT: And his reputation for integrity, I would presume, as well?

THE WITNESS: His reputation in the community. He was having difficulty cashing checks and other things like that.

THE COURT: What was the effect— what was it about the son? He took his son’s social security as well?

THE WITNESS: Your Honor, he also obtained a — purchased a motor vehicle in his — -I believe his 10 or 11 year old son’s social security number — Mr. Baldwin’s social security number. This

Mr. Baldwin’s son’s social security number.

THE COURT: And, of course, the effect on his son’s credit won’t be determined for a number of years, I would assume.

THE WITNESS: That’s correct, Your Honor.

Id. at 46-47.

After reducing the total offense level by one in response to a defense objection to the PSR, 5 the court stated that it would depart upward by two levels. The court explained:

Because [the Defendant] didn’t just defraud these institutions. He defrauded the identity or assumed the identity of other persons to their detriment and I think that’s more heinous than the financial loss. There’s an old adage, he who steals my wallet steals trash. He who steals my good name steals all. It’s the worst crime of all. You can get back the money, but you can’t get back your reputation.

Id. at 51. The court found that the Defendant’s case was atypical, thereby warranting departure, because the guidelines did not account for damage done to the reputations of individuals. See id. at 51-52, 54.

The court concluded:

United States Sentencing Guidelines Section 2F1.1 takes into account the loss to financial institutions. However, it does not take into consideration the endangerment of the solvency or reputation of the victim Stanley Britt Baldwin.

*195 Likewise, it is conceivable that the Defendant’s son, age 12, may not feel the impact of his damaged credit for years to come.

And, consequently, the court finds that an upward departure is appropriate based upon the provisions of 2F1.1 application note 11(f) and 5K2.0.

Id. at 56. Finding that “in cases in which the loss determined under 2F1.1(b)(1) does not fully capture the harmfulness or seriousness of the conduct an upward departure may be warranted,” the court departed upward by two levels, one for each victim. Id. at 55-56. The resulting total offense level of fourteen, together with Criminal History Category III, resulted in a guideline range of 21 to 27 months. Accordingly, the Defendant was sentenced to 27 months imprisonment, to be followed by a five-year term of supervised release. The court also ordered the Defendant to pay restitution in the amount of $53,723.33. The Defendant now appeals, challenging his sentence on the ground that the district court’s upward departure was unwarranted.

II.

We review an upward departure under a “ ‘unitary abuse-of-discretion’ ” standard. United States v. Barber, 119 F.3d 276, 282 (4th Cir. 1997) (en banc) (quoting Koon v. United States, 518 U.S. 81, 100, 116 S.Ct. 2035, 135 L.Ed.2d 392 (1996)). Under this standard, we afford substantial deference to the district court’s departure decision. See Koon, 518 U.S. at 98, 116 S.Ct. 2035.

Congress has mandated that a district court impose a sentence within the range that results from the proper application of the guidelines “unless the court finds that there exists an aggravating or mitigating circumstance of a kind, or to a degree, not adequately taken into consideration by the Sentencing Commission in formulating the guidelines that should result in a sentence different from that described.” 18 U.S.C.A. § 3553(b) (West 2000). In order to ascertain whether a potential factor is an appropriate basis for departure, a sentencing court must first determine whether that factor was forbidden, encouraged, discouraged, or unmentioned as a basis for departure by the U.S. Sentencing Commission. See Koon, 518 U.S. at 92-96, 116 S.Ct. 2035; Barber, 119 F.3d at 279-82. The court determines the category into which a given factor falls by reference to the guidelines, policy statements, and commentary. See Koon, 518 U.S. at 92-93, 116 S.Ct. 2035. How the district court should proceed is determined by the category into which the factor under consideration falls. See id. at 93-96, 116 S.Ct. 2035; Barber, 119 F.3d at 280-82.

Departure on the basis of a forbidden factor is never permissible. See Barber, 119 F.3d at 280. If the court determines that a factor is encouraged but has not been taken into account by the applicable guideline, the court may exercise its discretion and depart from the guideline range. See id. at 280-81. On the other hand, if the court determines that an encouraged factor has been taken into account within the applicable guideline, the court may depart “only if it concludes that the factor is present to such an exceptional or extraordinary degree that it is outside the heartland of situations encompassed within the applicable guideline.” Id. at 281. Similarly, if a factor is discouraged, a district court may depart “only if it finds that the factor exists to such an uncommon degree that it is outside the heartland of circumstances embraced by the relevant guideline.” Id. Departure on the basis of an unmentioned factor “is permissible only when [the presence of the unmentioned factor] takes the case outside the heartland of situations addressed by the applicable guideline.” Id.; see Koon, 518 U.S. at 96, 116 S.Ct. 2035 (“If a factor is unmentioned in the Guidelines, the court *196 must,- after considering the structure and theory of both relevant individual guidelines and the Guidelines taken as a whole, decide whether it is sufficient to take the case out of the Guideline’s heartland.” (internal quotation marks and citation omitted)).

Here, the district court departed upward on the basis of damage to the credit ratings of the Defendant’s victims. 6 Although the district court cited application note 11, this note does not expressly identify damage to a victim’s credit rating as a potential basis for departure. See U.S.S.G. § 2F1.1, comment, (n.11) (providing that in a case where the monetary loss “does not fully capture the harmfulness and seriousness of the conduct, an upward departure may be warranted,” and providing examples). 7 Damage to credit rating was not listed by the Commission as a factor that can never be a basis for departure, nor has this factor’s appropriateness as a basis for departure been expressly addressed in the guidelines, policy statements, or commentary. Damage to a victim’s credit reputation is, therefore, an unmentioned factor. 8 See United States v. Fenner, 147 F.3d 360, 364 (4th Cir. 1998).

Because the factor is unmentioned, the departure was proper only if it was not one that the Commission considered to lie within the fraud guideline’s heartland. The Defendant cites two unpublished decisions in support of his position that damage to a victim’s credit reputation does not take a fraud case out of the heartland. 9 See United States v. All, 1998 WL 647009, 161 F.3d 3 (4th Cir. 1998) (per curiam); United States v. O’Dette, 1994 WL 284102, *2, 28 F.3d 1214 (6th Cir. 1994) (per curiam). The All case did not involve damage to a victim’s credit rating. See 1998 WL 647009 at *2, 161 F.3d 3. To the extent that United States v. O’Dette has precedential value, it supports upholding the departure. In O’Dette, the Sixth Circuit observed that the fraud guideline was directed at punishment for losses suffered by the bank, not losses suffered by third parties; in particular, the court found that the fraud guideline is not directed toward the adverse impact fraud may have on a third party’s credit. See 1994 WL 284102, *8-9, 28 F.3d 1214. We do not find that the district court here abused its discretion in determining that the Commission did not consider the adverse impact that a defendant’s fraud may have on the credit reputations of third parties under the guidelines in effect at the time of the De *197 fendant’s sentencing, 10

The Defendant also argues that the district court clearly erred in its determination that there was damage to the victims’ credit reputations. The court relied on the PSR and the testimony of Agent Casper. This evidence demonstrates that Britt Baldwin suffered at least a temporary loss to his credit reputation and inconvenience to the point of obtaining an attorney to have his credit reputation restored. Young Baldwin experienced damage to his credit reputation, the effect of which is currently indeterminate. The district court did not clearly err in determining that the Defendant’s fraud damaged the credit reputations of his victims. Accordingly, we conclude that the court did not abuse its discretion in basing an upward departure on this factor.

III.

In sum, we conclude that the district court did not abuse its discretion in determining that damage to credit reputation is a factor that takes a case outside the heartland of the fraud guideline, or in finding that the Defendant’s fraudulent activity damaged the credit reputations of Britt Baldwin and young Baldwin. Accordingly, we affirm the decision of the district court.

AFFIRMED.