Identity theft is one of the major issues affecting all of us nowadays. With the boom of the internet and the need for us to provide our personal information in so many mediums, we’ve opened up a large gap in consumer safety. There have been a lot of strides made in that area to help prevent identity theft, but what can you do as a consumer to protect yourself? We’ve touched upon just about all of these topics in other articles, but I wanted to revisit them and organize them into one article for easy reference later on. Here are 5 simple steps you can take to prevent yourself from becoming a victim of identity theft.
1 - Monitor your credit
There are many credit monitoring solutions out there, and we recently did a review of the TrueCredit monitoring solution since that’s the one that I signed up for not too long ago. Basically they offer you a chance to have access to your credit report and receive alerts when things change on them. That should give you quick knowledge of any possible fraudulent activity and help you nip it in the bud early. Make sure you research your solution well as some of them only offer access to one of your credit reports. For maximum protection you should make sure to have access to all three (Equifax, Experian, and TransUnion).
2 - Put freezes on your credit
Another thing you can do is have the credit bureaus put locks on your credit. Basically what this means is that your credit report is not available to be pulled for consideration in opening new accounts. This is a very effective way of stopping identity theft. The catch lies in the fact that you must unlock your credit report before applying for credit yourself. With companies using different bureaus, this can be quite a hassle. But if you’re pretty stable in your finances and don’t have any plans of acquiring new credit anytime soon, this is a very good way to protect yourself.
3 - Consolidate your spending to only a few cards
I’m a big proponent for simplifying your spending. While it’s helpful in making it easier for me to manage my finances, it also makes it easier to thwart off identity theft because you have less accounts to watch over. The more you can consolidate your spending to a few credit cards (or in my case, one credit card), the easier it is to notice any strange activity. The more cards you use, the more you’ll probably have in your wallet or purse, and that just adds more risk since they’re easier to misplace. I keep one credit card in my wallet and I use it for everything. All the rest are at home in case of some sort of emergency, but that’s it.
4 - Use email alerts
We discussed this as well in the readers question on handling multiple credit cards, but it deserves another mention here. Take advantage of the technology that banks are offering their customers. Just about every major banking institution has created some sort of email alert system when you bank online. Basically it means that you can set up certain alerts that email you when they’re triggered. For instance, on all the credit cards that I don’t use, I set an alert to email me if a purchase over $1 is made or if my balance is greater than $1. That way, if anyone uses it, I’ll know as soon as it posts to the card. I may not check those accounts everyday since I don’t use them, but with alerts I don’t have to.
5 - Check your transaction history/statements regularly
For the accounts that you do use all the time (or are not able to set up alerts for) it’s important to stay informed as to the transactions that are happening on them. I’m not really one for reading my statements too often (since I get electronic versions), but I do log in to my online banking account and check my balance and recent history often. A lot of times I do it just out of habit or to make sure I didn’t get overcharged by someone, but it’s also a crucial step in making sure no one is using my account in a fraudulent way.
The key to protecting your identity is to put as many barriers in place as possible, and if by chance someone still gets passed them, being able to report it as soon as possible. Quick action is always best and can help save you a lot of time and money later on. Focus on knowing your credit (and possibly locking it down), consolidating your accounts and automating alerts on those you don’t use, and actively monitoring the ones that you do. The combination of those things are a strong defense against identity theft. It shouldn’t take you too long to set something up, and the little time you take up front can save your identity from the possibility of being taken advantage of.
