Protect Your Credit from Identity Theft
Your identity is connected to everything you do, from your job and driving privileges to owning a home and financial security.
Identity theft is a scary prospect; in a flash, someone could steal what you have worked so hard to earn just by using your name or Social Security number. While identity theft has been on the forefront of news topics for years, it is still often misunderstood. There are many ways you can protect yourself and your credit from identify theft and most of them are free.
What Is Identity Theft?
Many people equate identity theft with stealing Social Security numbers and other information to create financial accounts. While this is one of the most financially damaging types of identity theft, it is not the most common. Identity theft also includes fraudulent use of credit and debit cards or checks, the most common occurrences with this crime. Identity theft can also include using your name and information for employment, renting apartments and many other illegal activities. Anytime someone deliberately uses another person’s information for any type of gain, it can be considered identity theft.
Should I Invest in Credit Protection Services?
There are many companies that claim to protect you from identity theft – for a substantial fee. While these services can be helpful, they often use scare tactics to increase sales and may create a false sense of security. Since most types of identity theft involve using an existing debit or credit account, not opening a new account, having one of these services only monitoring your credit report does not protect you from illegal use of your financial accounts. However, there are many ways you can protect yourself from identity theft without spending hundreds of dollars a year on credit protection services.
Simple and Low-Cost Options to Protect Your Identity and Credit
There are simple ways you can protect yourself from identity theft and reduce the impact on your credit if it does happen to you. The first step is to protect your personal and financial information. Some ways to do this include:
- Never carry your Social Security card or number with you. Put your card in a safe place with other confidential documents.
- Only give your Social Security number to those who need it – unless you are opening an account at a financial institution, requesting credit, require it for employment purposes or tax preparation, it is usually not needed. Always ask why an organization is requesting your SSN – often it is not required.
- Use firewalls and other digital protection options on your devices that contain personal and financial information.
Keeping your information safe is essential. Shred all confidential documents, use protective software on computers and never leave personal information where others can access it. This can protect you from others obtaining your information, whether your financial account numbers, SSN or other information they can use to steal your identity.
Another option to limit the damage of identity theft is to catch it quickly if and when it occurs. This begins with monitoring all the transactions on your financial accounts. You should always review all credit card and bank statements each month and alert your financial institutions if there is any activity that you did not authorize. Even better, use online account access to check your accounts weekly for strange transactions. Most credit and debit cards have fraud protection; in most cases, if you report fraudulent activity right away, you will not be held responsible for the charges.
Another area to monitor is your credit reports. You do not need to pay hundreds of dollars for a company to do this for you. A free credit report is available to you each year from all three credit bureaus. Since all three contain similar information, set a reminder on your calendar every four months to request a free copy from one of the reporting agencies. This will give you a free look at your credit report three times a year. You can dispute any discrepancies, and this can alert you quickly if someone is trying to open accounts in your name.
The third option is not necessarily free, but it is inexpensive. If you are worried about someone trying to obtain credit under your name and SSN, put a security freeze on your credit reports from all three credit reporting bureaus. You can do a free fraud alert that will last 90 days, or place a security freeze for a fee that will last until you lift it temporarily or permanently. Both can stop any company from pulling a credit report to check your credit to open a new account.
Your credit is a valuable asset, especially when it comes time to buy or refinance your home. Use these tips to protect your credit from identity theft and when you are ready to use your good credit to buy a home, contact us at Galaxy Lending Group.