Having your identity stolen is a stressful situation that no-one wants to go through. Not only is identity theft a hassle to deal with, it can put your financial health in great jeopardy.
With the drastic increases in identity theft and all these endless robocalls, it is simply too risky not to take precautionary actions to protect your identity.
The good news is there are 10 steps to avoid identity theft you can take now to help protect yourself from becoming a victim. Let's go through them all, especially as the economy heads towards a recession due to this damn coronavirus!
10 Steps To Avoid Identify Theft
1. Use A Secure Password Manager For Every Account
We've all heard it before that weak passwords make accounts more vulnerable to hacks and data breaches because it's true! If you use a secure password manager like LastPass you don't have to worry about remembering all of your various usernames and passwords. Plus, the software makes it super easy to create very secure and unique passwords for each of your accounts. And you can access your account in the cloud on the go.
Make sure all of your accounts, devices and computers are password protected. Use a different password on each account and always avoid using common words, your name, birthday or anything that's easy to guess.
2. Think Thrice Before You Click
Phishing scams are more prevalent than ever and they are getting harder to spot. Never click on suspicious links in emails, texts, or on the web. And don't type in your username or password on any unfamiliar login screen. If you receive a message that seems to be from someone you know but something in the subject or message seems off, it probably is.
Email accounts get hacked all the time. If you have any doubts, pick up the phone and contact the sender and let them know you suspect their account is compromised. Identity thieves routinely use emails and websites that look real.
3. Keep Your Personal Information To Yourself
Banks and credit card companies will never ever email or call you and ask for your personal information such as your PIN, Social Security number, or bank account information. The IRS only sends notifications and requests by mail too, so anyone calling or emailing and claiming to be from the IRS is lying.
Thieves try to trick victims into believing their accounts were compromised and ask for personal info in order to “verify” your account. Don't fall for the scams!
If you think a caller could be legitimate, ask for all of their information and hang up. Then call the organization back using verified contact information on your account statements and ask if the phone inquiry was real or a scam.
4. Monitor Your Credit Score Frequently
Although your credit score doesn't impact the likelihood you could be a victim of identity theft, it is vital to your financial health. It's best practice to monitor your credit score regularly so you can quickly catch any anomalies. You can easily check your latest Experian credit score straight from their website for just $1.
Experian is the most commonly sourced of the big three credit bureaus. It’s a good idea to see what your credit score is before applying for any loan. If it’s below 720, you won’t get the best rate, but at least you can spend time to improve your score.
5. Check Your Credit Reports Often
Knowing your credit score alone isn't sufficient to avoiding identity theft. It's just as important to regularly check your credit report, a document containing detailed information about your current and historic financial accounts including active, inactive, and closed accounts.
Did you know that 1 out of 4 credit reports have errors? This is concerning because errors can negatively affect your credit score and can also indicate identity theft. Check your credit report with Experian, Transunion, and Equifax often. Get a free copy of your Experian credit report here.
6. Utilize Fraud Alerts
The three U.S. credit bureaus offer many useful services to monitor your credit report, credit score and help keep your identity protected. Experian offers fraud alert services through their IdentityWorks protection plans. Members can lock their Experian credit file, get Dark Web Surveillance monitoring, get up to $500,000 in identity theft insurance, lose wallet assistance and a whole lot more.
Fraud alert services actively monitor your accounts and notify you immediately if they suspect any type of breach, taking the headache and workload off your shoulders.
7. Lock Up Or Shred Personal Documents Regularly
Keep important hard copy personal documents in your house secure in a safe or locked filing cabinet. Password protect your computer to keep your digital files secure as well.
Anytime you need to dispose of receipts, invoices, account statements, contracts or any other documents containing personal information that you no longer need, always use a shredder so thieves can't get a hold of your account numbers or other sensitive information.
Empty your physical mailbox every day as well so your mail isn't easily accessible to identity thieves prowling around for personal data.
8. Guard Your Wallet And Log The Contents
One of the worst feelings is losing your wallet or having it stolen. It's upsetting and quite a pain to replace. If you carry a wallet, keep it in your front pocket, which is much harder for thieves to access versus back pockets.
If you use a purse, keep it zipped shut and close to your body at all times. In addition, only take what you need when you leave the house and minimize the numbers of cards and personal documents you carry. Never carry your Social Security card in your wallet.
It's best practice to keep a list at home of all of your credit cards, ID cards, and other items you carry in your wallet and purse. If you photocopy the contents, you can easily access the various customer service numbers if you ever need to cancel accounts or request replacement cards.
9. Minimize Your Exposure And Close Inactive Accounts
I only have two active credit cards – one for personal use and one for business use. That's it! I recommend minimizing the number of active credit cards for the sake of your finances, reducing the number of accounts you have to monitor, and thus lowering your risk of identity theft.
10. Keep Your Computer And Personal Devices Secure
Keeping devices up to date with the latest patches can feel like a pain, but it's in your best interest to stay on top of updates. Hackers are always looking for back doors to gain access to personal data files and if you're running outdated software, you're asking for trouble. It's also good practice to keep your devices protected with the latest anti-spyware, anti-malware and anti-virus software.
In addition to these top 10 steps to avoid identity theft, be sure to know look out for these 15 warning signs that you identity has been compromised.
Minimize Your Risk Of Identity Theft
If you actively follow the above 10 steps to avoid identity theft, you'll greatly minimize your risk of identity theft. We can never take our personal data for granted. The better prepared you are, the less you'll have to worry. Further, the more discouraged identity thieves will be to try and gain access to your personal information.
Sign up with Experian's IdentityWorks today to keep your identity extra secure. Let them do all the monitoring for you. This way, you can spend more time doing the things you really care about and enjoy!
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- Free wealth management page to manage your money better.
Financial Samurai has been online since 2009 and is one of the most trusted and largest independently-run personal finances today. You can sign up for my free newsletter for more insights.
About the Author: Sam began investing his own money ever since he opened an online brokerage account in 1995. Sam loved investing so much that he decided to make a career out of investing. He spent the next 13 years after college working at two of the leading financial service firms in the world. During this time, Sam received his MBA from UC Berkeley with a focus on finance and real estate.
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