Protecting Yourself From Identity Fraud

You probably know that identity fraud is a very real crime. Indeed, it is so common now that you likely know someone who has been a victim. And chances are that at some point in your life, you will be an identity theft victim yourself. The results can be devastating when it comes to your personal finances. After all, one of the biggest ways you are impacted is through your credit score. When your credit score goes down, you are less likely to get a loan, and you will have to pay more in interest when you do get loans. Identity theft can seriously impact your financial wellbeing. So, while it is probably not possible to protect yourself completely, here are a few things you can do to reduce the chances that you will be an identity fraud victim:

• Use credit cards when shopping online.Because credit cards have protections against identity fraud built in, you are better off using them for online shopping as opposed to using debit cards. (Read my post about that here.)



• Watch who you give personal information to.Some scammers will call up pretending to be your bank or credit card company. Such financial institutions will never need to ask you for your account number. Only give out that information when you call the institution for verification purposes. Also, remember that you will be notified of jury duty through the mail. Do not give your Social Security number out to anyone who calls you asking for it.



• Ask for written applications.If someone offers to help you apply for a major credit card over the phone, simply ask for a written application. Most major credit cards will not solicit you over the phone. The same is true of lenders. Always request a written application, and then double check it when it comes to make sure that it is not fraudulent.



• Check your financial statements.Make sure that you reconcile all of your accounts with your statements. Checking your credit card statements and your bank account statements can help you catch suspicious items before they become a bigger problem.



• Check your credit report.It is important to check your credit report once a year. Even better to check it more than that. Go to Annual Credit Report to get one free credit report a year from each of the credit bureaus. Stagger them (don´t get them all at once) and read your report three times a year.



• Mind your mail.If you are leaving town, don´t let your mail pile up. You can arrange to have a hold placed on it at the post office, or you can have a trusted relative or friend collect for you. But just leaving it there is an invitation for the unscrupulous to steal it - and your personal information.



• Don´t throw away the important stuff.Watching what you throw away is important. Credit card applications and statements should never be simply thrown away. They should be carefully shredded. Identity thieves go through trash cans to look for forms they can fill out (just change the address) and account numbers they can steal. I have a shredder that disposes of credit cards and data CDs as well, to further protect myself.