How to Prevent Identity Theft to Keep Your Credit Safe
You cannot turn on the news, or even your computer without hearing about data breaches or loss of information. I am sure you have heard the term identity theft, but do you really know what it means? If you do not have a clear understanding of identity theft, you will not be able to prevent identity theft.
Even if you do everything you can to protect your own identity, so many organizations have suffered from breaches and loss of information that directly impact you. No matter what you do, you cannot always be sure that your information is always protected. You must put every precaution you can in place and keep your eye on your own information. Continue reading to find out everything you need to know about how to protect your identity.
Things to Know in Order to Protect Your Identity
Someone can really steal your identity. Your information is always susceptible, so you always need to make sure you are vigilantly aware of what is happening with your information. There are ways to protect your information and prevent identity theft as much as possible.
What Is Identity Theft?
Identity theft is when someone steals your personal identity and information and then uses it without your consent. There is a large amount of information that can fall into the category of personal information. The fraudsters can use it to open new accounts or create other types of fraudulent activity. There are several different types of identity theft, which I will explain a little further down in this article.
As I stated above, there is no way you can completely protect yourself from theft. You need to learn how your information can be risked and what can happen with it. The more you know, the better able you are to prevent identity theft.
Be Careful When Giving Out Personal Information to Public
Think about the basic information you use every single time you apply for new credit, rent a car, apply for a job, and even buy a new mobile phone. You are using the same information over and over. You are constantly sharing your name, address, and social security number. In some cases, you have to go a little deeper and share your previous addresses and places of employment.
This information is not difficult to find. All anyone has to do is a little digging online and that person can probably find out all that information about you. They may have to search many places and put the information together, but if they want it badly enough, they can find it. If they are proficient enough, they can develop an application to mine all the data they want for them.
Keep Your Social Security Number Safe and Private
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You should consider not giving your social security number on random applications just because people ask for it. You have to provide it if you want to apply for some type of credit, but you should not have to provide it in other places. Once someone has your social security number, name, and address, it is all fairly easy from there for someone to use your information for fraudulent means.
They may be able to open credit cards, rent cars, and rent an apartment. It does not take long before they have racked up a large amount of debt and potentially ruin your credit. If you use easy to figure out passwords, it will not take much for someone to figure out how to access your banking information or other websites.
What Are Common Types Of Identity Theft?
There are many different types of common identity theft. There are so many it is scary, really. However, if you want to prevent identity theft, you need to be aware of all the possible ways your data can be stolen.
Data Breach
I touched on this a bit earlier. This is when someone hacks into a company's data and steals it. Information that is typically stolen is your full name, your social security number, and credit card numbers. Over 400 million records were stolen in the last year. The scariest part of it all is that these breaches prove that your information can never be completely safe.
Browsing Unsecured
If you happen to find yourself on an unknown website, it may not be secure. You can usually tell if a website is secured because a closed lock appears next to the website address. If there is no lock, or it is open, it is not a secured website and therefore not safe. I would recommend that you get off of the website immediately, but definitely do not share any information with a website that you not believe is secure. You can even set an alert to inform you if you are entering an unsecured website.
The Dark Web
I am sure you have heard this term and it sounds like a joke, but unfortunately, it is real. This is where your information often ends up when it has been stolen. Most of the time when hackers steal information, they are doing so to sell it. They rarely use it for themselves. The dark web is a hidden underground of websites that not just anyone can access. To visit these websites, people use software that masks their true identity.
Malware
I am sure you have heard of viruses or trojans. Malware is essentially the same thing, except it is a piece of software that is malicious but pretends it is harmless. Once it is on your computer, a fraudster can use it to steal information or see every keystroke you make on your computer.
Credit Cards
This is probably one of the oldest forms of identity theft. A thief steals your credit card and uses it to purchase other items. Your credit card information can be stolen by physically taking your credit card, using a skimmer, hacking into an online store, or through a breach in data.
More Types Of Identity Theft
Remember the best way to prevent identity theft and protect yourself is to arm yourself with knowledge. Knowing all of the ways your information can be stolen is the best way to prevent identity theft of your data.
While you may think mail theft is less common, do not be so sure. Think about all the credit card and loan offers you get in the mail. You may not even open them. You might just throw them in the trash. Well, they are exactly the items that fraudsters can use to piece together enough information about you to steal your identity. If you get bank statements in the mail, that is another item that can be stolen. Do not throw anything away. You should shred it all.
Phishing
Fraudsters have been using email for a while now, but are beginning to use text messages to steal your information. The messages looks legitimate and once you click on it, you are asked to provide additional information. Many of us stop there because we realize it is not a legitimate email or text. However, many people do not and provide the information as requested. Often the fraudsters will use some real information to lure you in. It may be an email from your bank or an online website where you shop. They will often ask for your username and password or social security number.
Wi-Fi
Many of us willingly jump onto free Wi-Fi networks so that we do not have to use our own data. Sometimes, we can get better connection or faster service via Wi-Fi, especially if we are not in a great area for our mobile provider. Just remember the free Wi-Fi is not secure. You should not enter any personal information while using an unsecured Wi-Fi connection. You must remember that any information you enter into a website has to travel to that server. If you are not on a secure network, a hacker can steal the information as it is traveling on an unsecured network.
Skimming
This is when thieves put a device on the card reader at a gas pump or an ATM. This device usually does not look any different from a machine that does not have a skimmer. When you insert your card into a machine with a skimmer, all of your information is easily stolen.
What Is Considered Personal Identifiable Information?
There are several pieces of information about you when used together, they are considered personally identifiable information.
Combining the Information
Name and Date of Birth
Let us take a look at your name, for example. When used by itself, your name does tell who you are but it is just your name. There is not much that can be done with your name. However, when it is combined with other information, such as your social security number and date of birth, it becomes something totally different.
All Your Addresses
Your address is also part of your identifying information. Most likely, it is not just your current address, but any address you have ever used. There may even be some addresses associated with you that surprise you. The address of your ex-spouse's parents may come up associated with you. Once information is tied to you, it is really hard to unravel it.
All Your Phone Numbers
Every phone number you have ever had will also be associated with you. Remember the days of cell phone when you could not take a number with you? I do. I cannot tell you how many carriers I switched before I found one that actually had good service. In the early days, there was a ton of bad reception and dropped calls. As a result, I had a lot of phone numbers.
Most Importantly - Social Security Number
Your social security number will be the one item that ties it all together. It does not change, which is why it is so important to protect it. There is other information that can be used as identifiable information. If you want to prevent identity theft, it is important to understand the role it all plays.
Your Complete Work and Financial History
Your employment and financial history are also part of your personally identifiable information. Most of this information is not private, but when used in combination with all of the information listed above, it can be dangerous.
How Can I Protect Myself Best?
While you cannot completely prevent identity theft, you can take action to help protect yourself.
Take Your Private Information off the Internet
You should shred anything that contains personal information. It is not enough to shred it or put it in the mail. This includes all those offers you get in the mail for credit cards or loans.
Create Safe Passwords
You should make sure that your passwords do not match, are long, and not easily cracked. You can buy software that creates random passwords for you so you do not have to create them on your own.
Be Careful When Selling Your Electronics
You should also wipe clean all computer and phone equipment that you are throwing away. You should clear the memory and restore it back to factory settings.
Be Aware of Spam Calls and Messages
You should also be careful with whom you share personal information. Never share that information over the phone. You should also remember that the IRS does not call you. They always send letters. I know those phone calls are intimidating and can scare you, but ignore them. If you are really concerned, you can do a reverse lookup of the phone number to determine how legitimate it might be. You will find that most, if not all of them are spam.
Some other signs that your identity may have been stolen are:
You no longer receive bills or checks in the mail.
You suddenly receive bills for items you did not purchase.
You get statements for credit cards you did not open.
You are being denied credit, even though you have, or think you have excellent credit.
Money is being taken out of your account and not by you.
You have been informed of a data breach.
What Should I Do If My Identity Has Been Stolen?
If you believe or know that your identity has already been stolen, there are steps you can take to prevent identity theft in the future. One of the first things you want to do is begin credit monitoring.
Monitor Your Credit
You should pull your credit report and check it over to see what is on there that you do not create. You should work to have these items corrected and removed immediately. You should also pay attention to your credit score to ensure it does not suddenly drop. I will explain more about credit and credit scores a little further down.
You should sign up for a reputable credit monitoring service. Please, keep in mind, these services do not stop fraudsters from stealing your credit. They do, however, monitor the situation for you and catch things you will not. They let you know when anything has happened with your credit. This gives you the opportunity to address it immediately. You can stop it from becoming a bigger problem. Trust me, that is a big deal.
There is a big difference between a fraudster opening a credit card but not getting the chance to use it and buying thousands of dollars of items with it. You want to stop it as soon as possible.
What Is A Credit Score?
When it comes to ways to prevent identity theft, you must be aware of some basics about your credit and credit score. I am going to start with your actual credit score. Your credit score number is a three-digit number that has a large impact on your life and your ability to purchase items with credit.
Credit Score Doesn’t Give out Personal Information
One interesting thing about your credit score is it does not identify you in any way. When a lender looks at your credit score, they do not know what you look like or any of your beliefs. All they know is how you tend to spend your credit. They also know if you pay your bills on time. Your credit score is an indicator of those things.
Credit Journey Shows How You Spend Your Credit
However, while your credit score lays out your credit journey on paper, it does not give the reasons why the journey was that way it happened. There is no story behind it and no context given. Some lenders do not care. They see your payment history and late payments and that is all they need to see. Other lenders understand there are reasons why things happen. They are more interested in knowing when before they make a decision on lending you credit.
I am going to give you a little more information with credit scores explained so you understand what a lender sees. All credit scores fall between 350 to 850, with a credit score between 600 to 750. A credit score of 800 or more is considered excellent credit and shows that you have handled your debt well. A score of 740 or more is a great credit score. If your credit is between 670 to 739, you have good credit. When your credit score begins to dip below 600, you are falling into the bad credit range.
Can Identity Theft Hurt My Credit?
Unfortunately, identity theft can severely hurt your credit. This is the main reason why you want to prevent identity theft for yourself. When someone uses your identity and opens up new accounts, it can hurt your credit in many ways. The simple act of opening new credit accounts can have a negative impact on your credit. When you have many credit accounts open it increases your debt to income ratio which then decreases your credit score.
When a fraudster opens accounts in your name and makes purchases, they do not plan to pay for them. You are usually left with high credit card bills that often have fees and penalties because the bill is not getting paid. You can dispute these charges and fees, but it still impacts your credit until you can get the entire situation resolved. Depending on how long it takes you to become aware of the misuse, the bills may continue to grow a bit out of control.
How Do I Build Credit?
If you do not have credit or your credit has been hurt by identity theft, you want to work on building credit as well as working to prevent identity theft in the future. In general, you can build credit by making smart credit choices.
The first thing you need to do is make sure that you pay all of your bills on time and for the correct amount. One thing to keep in mind is that paying some bills on time will not help your credit because your mobile phone does not report to the credit bureaus when you make payment. However, if you do not pay those bills on time, they will report it to the credit bureau.
Can I Improve My Credit Score?
The good news is that you can work to improve your credit score. The bad news is that is takes consistent and often hard work to make improvements to your credit score. It does not matter what has caused a decrease in your credit score, you have to be the one to fix it. If you develop good habits early on when it comes to preserving your credit, it will help you maintain that credit. Keeping an eye on your credit also goes a long way to prevent identity theft.
You should be sure to pull your credit report every year. You are entitled to one free copy per year and you should take advantage of that. You should look carefully at that report and make sure that you do not see any errors or areas of concern. If you do, address them immediately. They could really just be errors, but they could also be proof that someone has stolen your identity. Addressing them may help you prevent identity theft in the future.
Pay Bills on Time
You should also pay all of your bills on time. This may seem like a no-brainer, but believe it or not, late payments are one of the top causes of a decrease in credit score. You can easily take control of this by paying for everything on time.
Are There Other Ways I Can Improve My Credit?
There is more ways to improve your credit and prevent identity theft. You should only apply for credit when you absolutely need it. Applying for more credit is something that should take careful consideration. You should not be doing it on a whim. You should also make good use of the credit that you have.
Do Not Max out Your Credit Cards
This is a bad idea for a few reasons. One, it increases your debt to income ratio which decreases your credit score. Two, it gives you no credit if you happen to need it. Three, it makes your minimum payment high and you may not be able to afford paying more than the minimum amount which sets you up in the dangerous cycle of not being able to pay down your credit card.
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You should also make sure that you enroll in some type of credit protection program. Even if you have not had a problem, it can help you prevent identity theft in the future. These programs keep an eye on your credit report and notify you when a new line of credit is open, or if there is some other suspicious activity. These programs cannot stop the identity theft, but they alert you immediately so you can address it.
Conclusion
Ultimately, the responsibility to protect your identity and your credit falls on you. It is your information and you should safeguard it as much as you can. When your identity has been stolen, it is a scary position for you. The fraudster can destroy your credit in minutes and it takes you a long time to repair it. Even when it is not your fault, it still takes time to have all the damage reversed. In the meantime, you have to live life and your credit is compromised.
They may have completely emptied your bank account and you may not be able to get that back. It is one thing when it comes to credit cards because you can close them and get new ones. However, when it is money in your bank account, that is a much larger problem. You should do everything you can to protect yourself from identity theft.