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Identity theft is when an individual’s personal information is stolen and used to commit a crime, such as fraud or theft. Simply put, it’s when someone steals your identity. Unfortunately, identity theft is a lot more common than many realize. In 2021, almost 42 million Americans reported being victims of identity theft, with total consumer losses coming in at $52 billion. Identity theft is prevalent and can have significant financial consequences that last several years for the victims.
Wondering how to prevent identity theft and keep yourself safe? Luckily, there are steps you can take to protect yourself.
Here are eight things you can do to help prevent identity theft:
You can’t protect yourself from something you don’t fully understand. Therefore, the best thing you can do to prevent identity theft is educate yourself on what it is, what it looks like, and how to identify when it’s happening.
What it is: Identity theft is when someone uses your private personal identification (name, credit card, Social Security number, etc.) to impersonate or steal from you.
What it looks like: Using your information, identity thieves might take out loans, credit cards and credit lines, file medical insurance claims, sign up for a phone or utility service, receive your tax refund, drain your investment and savings accounts, and more.
How it works: The criminal finds out enough sensitive information about you that they’re able to pose as you and get some financial benefit. Someone might be able to open a credit card under your name with just your legal name, address, phone number, birthday, and the name of your workplace. Identity theft commonly occurs via:
Identity theft is serious and can cause a lot of problems for its victims. These are some of the potential consequences of identity theft:
When it comes to identity theft protection, you must check your accounts, credit reports, and statements frequently. The faster you spot something unusual, the quicker you can report it and stop it before it spirals out of control. A fraudster often starts with a small charge to see if you catch it—like a $5 coffee. After that, they’ll quickly move on to larger purchases.
Watch out for:
If you sign up for credit monitoring, you’ll be alerted as soon as something suspicious happens with your credit. Credit monitoring is a paid service through which you’re alerted whenever there are changes to your credit report or credit score. This is an incredibly valuable resource, as most people simply don’t have the time to check their credit as often as they would like.
Credit monitoring tools will track:
At its core, identity theft is when someone gets access to your personal information and uses it against you. So, protecting your personal information as much as possible is critical for reducing the risk of identity theft. This means:
You likely have a lot of personal information online or on your computer. You may have your credit card number saved on your browser, access your bank account online, or have a document saved on your desktop with all your passwords. These are all examples of why it’s important to protect your computer and use antivirus software.
Antivirus software is a computer program used to detect and defend against viruses. Hackers often use computer viruses to access your personal information for identity fraud purposes.
Some of the potential signs your computer has been infected with a virus are:
You can request a fraud alert be placed on your credit reports, which will warn lenders that they should take extra steps to verify your identity before approving new credit or loans. Individuals who’ve already been a victim of identity theft or believe they’ve been exposed often use fraud alerts.
An initial fraud alert is free and lasts one year. It’s important to understand that a fraud alert doesn’t guarantee that identity thieves can’t open accounts under your name, but it does make it much harder for them to do so.
If you believe a fraud alert isn’t enough, you could opt for a credit freeze instead. A credit freeze means no one can open a new account or loan under your name. This guarantees your safety, although fraudsters can still make changes to your existing accounts.
However, note that a credit freeze makes it very challenging for you to open new accounts as well. But that’s only a minor inconvenience, as the freeze can be lifted anytime.
You’ll need to reach out to each of the three major credit bureaus (Experian®, Equifax® and TransUnion®) to place a credit freeze.
If you believe you’ve been a victim of identity theft, it’s essential to report it as soon as possible. By reporting it quickly, you can limit the damage done to your accounts and your credit.
You’ll need to report the identity theft to:
It’s best to call each of the above parties so you can get quicker responses.
You may need to also update passwords and cancel cards to protect yourself from further harm.
Identity theft is a challenging situation to go through, causing financial problems, potentially delaying credit or loan applications, and leading to emotional distress. As a result, it’s wise to do all you can to prevent identity theft before it occurs.
However, if you’ve already been a victim of identity theft, there are still steps you can take to help fix the situation. One of the things you may want to consider is using a credit repair company. Credit repair companies can help you review all your credit reports, find errors and inaccuracies, and file disputes.
Lexington Law Firm has been a leader in credit repair for over 18 years. When it comes to fixing your credit, the credit repair consultants at Lexington Law Firm will help you through the process to work toward an accurate and fair credit report.