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It’s no secret that identity theft is at an all time high. In this day and age, taking measures to protect you and your family from becoming victims is essential. Although there are preventive steps you can take, people often do not know exactly what they are, or how to do them.
I have prepared this list with the intention of it being the definitive identity theft protection guide, regardless of a person’s level of exposure. Since some measure are appropriated only for extreme circumstances, I have categorized the steps as being either a minimum precaution, advanced precaution, or maximum precaution. Help stop identity theft by forwarding this page to your friends and family.
Minimum Precautions:
Identity theft is non-discriminatory and can affect anyone at any time. At a minimum I recommend the following steps to protect your identity and credit file.
Check Your Credit Report at Least Once a Year
If you don’t check your credit report, there is a good chance that you will never know you have been a victim until you are denied for a new loan or job application (many employers now refer to a candidates credit file as an indicator of his/her “responsibility” level). You can obtain one free credit report from each of the three credit bureaus every 12 months from the government mandated website http://www.annualcreditreport.com/. I have prepared a step-by-step guide (how to get your real free credit reports) if you need a little extra help obtaining your free online report.
Look for any accounts you didn’t open. If you find that you have been the victim of identity theft, contact the fraud victim division of each credit bureau and demand the fraudulent activity be removed. Most likely they will require you to file a police report and sign an affidavit stating that you did not open the bogus account. Upon receiving this information, each bureau will initiate an investigation with the lender to determine whether or not you are responsible for the account. By law the Bureaus have 30 days to settle your dispute. If no response is received within this time frame the disputed data must be removed or updated. No mater what, do not pay a dime for any account on your report you didn’t sign for.
Sign the Back of Your Card!
There is a popular email circulating around the Internet that advises readers not to sign the back of their credit or debit cards. Instead, it suggests to write “Photo ID Required” on the back to prompt the cashier to verify your identity with a picture. The problem with this advice is that it invalidates your terms of service agreement with the credit card company and possibly makes you ineligible for any additional protection they may have provided you in the event your card is used without your permission. There is a reason that it says “Not Valid Unless Signed” on the back of your card!
Buy a Paper Shredder
Shred your sensitive material you are throwing away such as credit card offers, utility bills, mortgage papers, medical information, and other personal information. Doing so reduces the chance that thieves will steal it out of your garbage, or “discover” it in a landfill somewhere and use the information to open an account in your name.
Never Put Your Full Account # On Your Checks
Instead use the last 4 numbers preceded by X’s (Example: Account# XXXXX1234), this will limit the exposure of your sensitive account data as it passes through the mail and check processing channels.
Never Give Your Social Security#, Bank Account#, or Pin# to Anyone that has Called You or Emailed You.
Protect yourself from “phishing” scams. If a person calls you over the phone, or sends you an email requesting personal information about any of your bank, insurance, investment, or any other account, DO NOT GIVE IT TO THEM. Instead, ask that they mail you verification of who they are and why they need your information.
Do Not Carry Your Social Security Card In Your Wallet
If you haven’t memorized your social security card by now you should! The last thing you want is to lose your wallet and have a thief walking around with your credit card and social security card.
Don’t Be Stupid With Your Pin #’s and Passwords
Thieves are smart enough to know that people often use easy passwords so they won’t forget them. Never use a password or pin # that is a family member’s name, your phone #, or birthday, etc. Create a unique password and stick with it. The more combinations of letters and #’s, the harder the pin will be to break.
Do Not Access Your Bank Account Information On Public Computers
You never know what level of security a public computer has in place to protect you from spyware programs, keystroke recorders, password recorders, and other potential identity compromising features. Never set your laptop or home computer to automatically “log on” to your bank, insurance, and investment accounts. Any ill intentioned person with access to your computer can easily pull up your browsing history to determine where you do your banking. If your computer automatically logs into these sites, a thief could potentially wipe you out!
Make Photo Copies of Everything In Your Wallet
We all know to call our credit and debit card companies if our wallets are ever lost or stolen. The problem is, the phone #’s are on the back of the cards of the wallet you no longer have. Make copies of the front and back sides of your cards, drivers license, company ID, and other important documents. Doing so will make contacting the appropriate agencies immensely easier. Leave a copy in a secure spot in your home. If you are going away on business or leisure, leave a copy with a friend or family member that you can contact in an emergency.
It is also a good idea to include the phone #’s of the 3 major credit bureaus with the photocopies of your wallet’s contents. You will need them to place temporary “fraud security alerts” on your credit files. These 90 day alerts will require lenders to take “reasonable” measure to ensure that you are who you say you are when you apply for new credit making it very difficult for thieves to acquire any credit in your name. If you want to continue these security alerts you must contact the bureaus and renew them every 90 days.
Equifax: 1-800-525-6285
Experian: 1-888-397-3742
Trans Union: 1-800-680-7289
Social Security Administration Fraud Line: 1-800-269-0271
Advanced Precautions
People who have already been victims of identity theft, or people who want added piece of mind may wish to consider these additional steps to further protect their identity and credit file.
“Opt Out” of Preapproved Credit Offers
Simply call 1-888-5OPTOUT to have your name removed from pre-approved credit and insurance mailing lists. The fewer credit applications you get in the mail, the less chance thieves have of finding the forms and mailing them back on your behalf. You have the choice of opting out for 5 years or permanently. This one call will cover all 3 national credit reporting agencies.
Request a “Fraud Security Alert” be Place on Your 3 Credit Files
You don’t need to be a victim to place this alert on your accounts! If you feel that you are at an increased risk for identity theft (for any reason), you can call the three credit bureaus (Experian, Equifax, and Transunion) yourself and ask that they place a “fraud security alert” on your credit file. This alert requires creditors to take “reasonable” measures in determining your true identity before issuing you credit.
The initial “fraud security alert” is only good for 90 days. Be sure to renew the alert with each of the credit bureaus, and continue to do this every 90 days.
Maximum Precaution
Put the “Freeze” on Your Credit File
If you feel that your identity theft is in imminent danger, or you want the piece of mind that comes with maximizing the protection of your identity, you might be a good candidate for a security freeze. Be careful before executing this powerful precaution, Experian warns of the disadvantages to a credit freeze:
Security freezes are designed to prevent a credit reporting company from releasing your credit report without your consent. However, you should be aware that using a security freeze to take control over who is allowed access to the personal and financial information in your file may delay, interfere with or prohibit the timely approval of any subsequent request or application you make regarding a new loan, credit, mortgage, insurance, government services or payments, rental housing, employment, investment, license, cellular telephone, utilities, digital signature, Internet credit card transaction or other services, including an extension of credit at point of sale.
To place a freeze on your three credit bureaus you need to contact them directly and follow their instructions. The cost is generally $10 for each bureau but may be waived in certain cases for identity theft victims or other special situations. You will also be given a pin # or password to use if you decide to release the freeze on your consumer file (don’t lose this!) You will also be charged another $10 when the freeze is removed.
Related Articles:
How to Clean Up Your Credit Reports
Dave Ramsey’s 7 Financial Baby Steps
How to Use a Goodwill Letter to Remove Late Payments From Your Credit Report
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Identity Theft Prevention Guide
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Your recommendation for credit freezes is quite cold. Don’t wait until you’re in “danger”, get a freeze NOW. Who cares if there’s a 15 minute delay to getting your credit thawed? At least you know it’s only open to that one retailer you specify.
There is no better way to protect your credit and it’s the cheapest option too! You can’t beat that.
Your right, there is no better way to freeze your credit but people need to be aware of the consequences of freezing their credit.
As I said, if you want the added piece of mind, it may be a good idea.
Thanks for reading!
What are your thoughts on Identity Theft Insurance?
I guess it depends on the particular company offering the insurance.
I don’t have it, but I have heard many people say good things about the Zander product that Dave Ramsey has been pushing on his radio show (i’m pretty sure he gets a cut of the profits).
From what I can tell, if you want the added piece of mind, and can afford the price, a reputable identity theft product isn’t a bad way to go. Check out:
http://www.zanderins.com/.
ben
Credit Insurance is buying protection for something you have no way of managing your own risk for. I for one only want to play a game if I have some input into whether I win or not.
If you’re the type that feels safer with insurance, go for it, but I think if you get a freeze, you mostly don’t need it and your money is better spent on savings or investments.
Thanks for the great tips especially the phone number to remove yourself from pre approved credit card lists. I hardly get any mail but 80% of the mail I do receive is pre approved credit card applications. I had to get a shredder just for my junk mail. I spent quite a bit of money on my shredder but when it comes to identity theft protection, it was well worth the money.