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06/06/2008

Be Your Own Credit Protection

Identity theft occurs when someone uses your personal information without your permission. The reasons behind the stealing of an identity vary, but the results can be predicted. Some consumers victimized by identity theft may lose out on job opportunities. They could be denied loans for education, housing or cars because of negative information on their credit reports. In some rare cases, they may even be arrested for crimes they did not commit. You don't have to subscribe to a credit protection service in order to protect yourself from the scourge, however. There are steps you can take yourself to protect your identity and your credit.

1. Internet/Computer. One of the most popular ways for crooks to get a hold of your financial information is through unsecured operations on your computer. Your private information can be collected from your computer in a variety of ways. E-mails or text messages phishing for personal information can look very official. An unencrypted wireless connection can allow other people to look in on your web surfing, including any accounts you may be checking and bills you may be paying. Spyware can be surreptitiously downloaded to your personal computer, recording and transmitting every keystroke you make to a thieving third party. When using your computer for any financial means, ensure that you're protected with anti-virus and anti-spyware software as well as firewalls. Also, use complicated passwords which would be hard for people to figure out.

2. Phone. The phone is another way identity thieves will get to your financial information. A call from an unknown number reporting troubles with your savings account may sound scary at first, don't be tricked by a criminal into divulging your information over the phone. When your bank or credit card company ever has the need to call you, they already have your information, they wouldn't need to ask you for it. If you think that the problems may be real, go directly to your bank. If it is after hours, this is more reason to be suspicious, but go the next day it is open just to be sure.

3. Mail. It is easy to take for granted that the mail is a secure system. 99% of the time, your mail makes it to its destination, and though it may seem unfortunate at times, your bills probably show up like clockwork. It's our expectation that the mail is not tampered with that helps identity thieves prosper. To protect yourself, there are several steps you can take. First, don't pay your bills at the mailbox at the end of your driveway: take it to an official blue-steel mailbox, or better yet, the post office. Second, for all of the accounts for which it is possible, stop getting your bills and account statements through the mail by opting for the "paperless" systems offered recently by many companies. Third, don't let mail accumulate in your mailbox. Retrieve it as soon as possible after it is delivered.

4. Personal Papers. Keep your files of bank statements and other personal finance papers in a locked file cabinet. Carry as little personal information on you as possible. Important documents like your social security card and passport should be locked away as well unless you need them for identification or travel purposes. Try not to use your social security number as a form of ID on your divers license.

5. Inventory. Keep photocopies of your most important documents in a safe and secure place. Along with your social security card, drivers' license, and passport, included in this should be photocopies of the front and back of all the cards you carry in your wallet. If your wallet is ever stolen, you want to know exactly what was in it when you report the items missiny.

6. Shred Documents. There are always going to be papers or documents with personal information on them which you no longer need to keep. They must be disposed of properly, don't just throw them in the trash. If you have a fire pit, it's easy to toss these papers into your next bonfire. They may also be put through a shredder as long as it is cross-cut. Cross-cut means its cut in two directions instead of just one. It's impossible for identity thieves to piece the pages together when they're cut into confetti.

7. Check Your Credit Report. At least three times a year, check your credit report. Contact all three credit bureaus for your information and look it over for inaccuracies. By law, you are entitled to receiving a free report from each agency once every year. It's worth the extra cash to get your credit report a few times a year. It will help to ensure that if someone does steal your identity and you did not catch it by any of the previous methods listed here, relatively little time will pass before it will have been caught.

8. Opt Out. There are two very important lists which you should subscribe to in order to protect your identity. The first is the National Do Not Call List, which will prevent you from receiving unsolicited phone calls. By putting your number on this list, it's more likely you will only receive phone calls from organizations with which you are already associated. Second, to stop pre-approved credit card offers in the mail, call 1-888-5-OPTOUT. An identity thief can get a hold of a "pre-approved" credit card application in the mail and "accept" it on your behalf. Stopping the offers from coming to your home in the first place can reduce that chance considerably.

9. Reconcile Your Spending. It is surprising how many people don't bother to reconcile their checking and savings account or credit card statements. This means comparing your statements to what you actually spent. Make sure that everything in your statement is accurate. By doing this consistently, not only will you be able to quickly identify any checks or transactions which you did not authorize, you may also catch transactions which per processed inaccurately. Perhaps you wrote a check for $36.50 and when you looked at your statement your account was debited for $63.50 instead. That's a difference of $27! Without reconciling your purchases, you might not have caught it and eventually you would bounce a check.

10. Fraud Alerts/Credit Freezes. If you're really concerned about your identity being stolen, there are some more "extreme" measures which can be put in place. A fraud alert is something any consumer can attach to their credit report at all three credit bureaus. By law, lenders who see a fraud alert on your file are supposed to take "reasonable steps" to verify the identity of someone who is applying for credit in your name. They are free and easy to put into place. They expire after 90 days, however, so if you want to stay under the alert, it must be renewed. A credit freeze, however, is slightly different. If a credit freeze is in place, not even you can open an account in your name. Lenders, insurers and even employers doing background checks will not be able to access your credit file. You are free to use whatever credit you have established, but if you wish to open up a new line, you will need to have the freeze lifted first.

By following these steps, you can place yourself in control of your personal information and ward off the threat of identity theft. You don't need to pay another service to monitor your accounts for you. A little time and energy spent following these steps can do more to protect your identity than subscribing to a service which offers to do them for you at a price.

Sara Duane graduated from the University of Minnesota, Morris, with a BA in English in 2003. She is as a freelance writer & editor in central Minnesota.





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