Credit Theft Prevention

Approximately 9 million Americans fall victim to identify theft each year, according to the Federal Trade Commission. Identity and credit theft often goes unnoticed for weeks or months before it begins to dramatically affect your life. There are many actions you can take to prevent your own identity and credit from being stolen. These actions include understanding how and why credit theft occurs and knowing what to do to safeguard your personal information and credit.

Background

Credit theft affects individuals from many different geographic areas and demographics. It is easy for credit thieves to steal personal information and use it for purposes that benefit them and damage your financial records and reputation. The FTC describes that this information can be used to commit credit card fraud, utilities fraud and bank fraud, among others. Credit theft can have a major effect on your life. It may keep you from obtaining important things such as a job, loan or house.

Causes

One way credit theft can occur is when someone physically rummages through household trash looking for your personal information such as your name, date of birth or social security number. They may also look for blank credit card applications and use your personal information to apply for a new credit card and keep the credit card for their own use, under your name. Credit theft can also occur electronically through spam emails or pop-up messages that ask you to enter your personal information. It can also occur when someone steals your wallet, credit card, or other personal documents and uses your name for purchases or fraud.

Actions

In order to prevent credit theft, you must be proactive and use your knowledge of how credit theft occurs as a basis for your actions. Simple actions can be taken at home, such as shredding any document with personal information on it and not providing personal information over the phone or Internet unless absolutely necessary. You should destroy old credit cards, and watch for phony applications or offers in your mail and email. You can report suspicious activity to the FTC or the Better Business Bureau. The Department of Justice suggests that you obtain a copy of your credit report on a regular basis. This report will provide you with an overview of all accounts in your name. It will also allow you to easily identify any suspicious activity.

Tools

If you want additional protection, you can utilize one of the many tools or services available to protect consumers from credit theft. Products such as LifeLock and Identity Guard can monitor your financial accounts and credit report and alert you when suspicious activity is happening. Internet security suites and firewall software can protect you from electronic identity theft and viruses that can reveal your personal information. The most important thing to do to prevent credit theft is to be knowledgeable of how theft occurs and knowing the tools and services available to protect your financial information.