Is your credit safe?
If your credit card information or Social Security number winds up in the wrong hands, that person can use your personal data to commit fraud. This is known as identity theft, and it affects more than 9 million American each year.
Protecting your credit is just as vital – if not more vital – than protecting your home and valuables. Identity theft is on the rise, and ensuring your credit is secure can help prevent you from becoming a victim. Follow the steps below to help protect your credit and your identity.
1. Check Your Credit Report
If someone is using your personal information to open new accounts or use your current accounts without your permission, this activity will appear on your credit report. Monitoring your credit history throughout the year will help you pinpoint any errors or potentially fraudulent activity.
Every person is entitled to a free credit report from each of the three credit bureaus every year (Equifax, TransUnion and Experian). These reports can be obtained from annualcreditreport.com. Annual Credit Report is the only website authorized by the government to provide free credit reports. Be wary of other websites that claim to offer free reports as many of them charge monthly fees for credit monitoring services.
You can choose to request all three credit reports at once, or you can spread them out over the year. By spreading out your requests, you can monitor your credit history multiple times throughout the year. When checking over your report, look for errors or inaccuracies. If an unfamiliar account appears on your report, notify the credit agency immediately. You may also consider a security freeze to prevent further damage.
2. Monitor Your Accounts
Keep a close eye on your bank statements and credit card activities. It may seem like a tedious task, but it can help you catch a problem early on before an identity thief does irreparable damage to your credit. Notify your bank or creditor immediately if you find unauthorized purchases and other suspicious activity on your statement.
Credit card companies and banks also allow you to sign up for account alerts. Alerts track your activity. When certain activities occur, notices are sent out via text message or email. For example, if your account balance falls below a certain limit, your bank may send you an alert to notify you of this activity. These alerts may even be able to be customized so you can take control of account monitoring.
3. Keep Private Data Private
This is perhaps the most important step when it comes to securing your credit. Thieves will have a difficult time stealing your identity if they cannot find your personal information.
- Shred all documents that contain personal information. This includes outdated bank statements, credit card statements and any other documents that contain your name, address, social security number of the numbers of any of your financial accounts.
- Go paperless. Use electronic payment options and choose to have your statements sent to you via email rather than traditional mail.
- Never share your ATM pin or bank account login information.
- Create a new password for each of credit card and bank account. Make sure that your password isn’t obvious. For further protection, use a password generator and password vault, such as LastPass, to store your passwords.
- Do not respond to suspicious telephone calls or email inquiries. Banks and credit card companies will never ask for your password or any other personal information when contacting you through email or telephone.
- Report stolen checks and credit cards immediately.
- Verify your mailing address. It is not uncommon for thieves to fill out change of address forms after they have obtained your personal information. Changing your address prevents you from receiving delinquent credit notices.
- Always sign out of accounts when using a public computer.
- Avoid paying your bills or making online purchases while on public or unsecured networks.
- Pay for online purchases with a credit card. Credit cards provide greater consumer protection than debit cards.
If you find yourself a victim of identity theft, there are two measures you can take to prevent further damage: Fraud alerts and credit freezes.
- Fraud alerts force banks and credit card companies to be hesitant about opening an account in your name or approving a credit request. Unfortunately, this measure only goes so far. By law, creditors are only required to take reasonable precautions. Experienced thieves have ways to circumvent these alerts.
- Credit freezes are more effective. They prevent creditors, lenders and banks from accessing your credit information unless you are already a customer. This can be effective, but it will cause issues if you are trying to obtain a credit card, mortgage or student loan.