Monday, January 28, 2008

Top Five Ways to Protect Yourself From Identity Theft

Identity theft is big business these days. Between 10 and 15 million Americans were victims of fraud that stemmed from identity theft between mid-2005 and mid-2006. The average loss more than doubled as well, from $1408 to $3257. With numbers like that, more and more people are wondering how to keep their credit and their identity safe.

Fortunately, there are a number of simple things you can do to help protect both.

1. Review: Get a free Credit Report

Your credit report shows what credit you have - a who, what, and where of your financial standing. Simply reviewing your credit report three times a year using the free credit reports available through www.annualcreditreport.com and checking for things that you don't recognize can help save you. Be careful, and use the official site.

When you receive your report, you will not receive your credit score. You don't need it to help protect your identity, so don't worry. Look for accounts that aren't familiar, addresses you don't recognize, and anything that you are not familiar with.

Since each of the credit agencies will give you at least one free credit report a year (and in some states, or other certain circumstances, more), you can check your credit report every four months. Think of this as preventative maintenance like changing the oil in your car, and
set a reminder for yourself.

The credit agencies are:

2. Guard: Protect Your SSN

Your Social Security Number or SSN is used for many identification purposes. Everything from taxes to credit applications to health insurance relies on Social Security numbers, and that makes them one of the most frequently targeted pieces of personal information. You can help protect yours by only giving it when required - many forms request it, but do not require it.

A few tips:
  • Never write your social security number on a check
  • Don't provide your SSN over the phone unless you have dialed the company yourself, and you trust the company.
  • Don't carry your Social Security card unless you need it - most people can keep their Social Security card at home in a safe place, rather than in their wallet where it can be stolen along with credit cards and a driver's license or other personal data.
3. Dispose: Properly dispose of records, receipts, and credit applications.

Shred statements, receipts, credit card applications and checks, and any other records that you throw away. A diamond or crosscut shredder is always preferable to a strip cut shredder, but any shredding is better than throwing them away intact.

4. Monitor: Check your financial statements, and keep accounts up to date.

Monitor bills and other financial statements such as bank statements regularly. Check for charges you didn't make, or locations that are unfamiliar. In addition, make sure that all of your accounts are up to date, and that addresses and other contact information are current. This ensures that you receive your bills, replacement credit cards, and that the companies can contact you in the event of a problem.

5. Cleanup: Cancel old accounts, and remove yourself from mailing lists.

You can remove your name from the Direct Mail Association's Mail Preference Service at https://www.dmachoice.org/MPS/, which will help cut down on junk mail and credit offers. You can also opt to not receive pre-screened credit offers at http://www.optoutprescreen.com/.

Canceling old accounts helps to ensure that credit cards aren't sent to old addresses, and keeps your unused cards from being abused without your knowledge. Not carrying extra cards can also help to make you safer if you do lose your wallet - you'll be less exposed, and you'll still have a card that you can use while you wait for replacements.

Simple maintenance can really help to protect your personal information and your credit. Make these steps a part of your everyday habits, and you can feel confidence that you're taking the right steps to protect your identity!

Creative Commons licensed photo credit Flickr user shawnzlea

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