Some people aren't concerned with identity theft and feel that it can't happen to them. However, identity theft is a problem that affects millions every year. Rather than ignore the problem, learn all you can about identity theft and take steps to reduce your chances of becoming a victim.
New Credit Accounts
Once another person has access to your name, address and Social Security number, he is free to open numerous accounts in your name. He can apply for credit cards and have the cards sent to an address other than your home. If he gets hold of your credit cards, he can purchase such expensive merchandise as plane tickets, electronics and furniture while running up your credit card bills.
Credit Reports
Because those who steal your identity have no intention of paying the bills that they incur, delinquent and past due accounts will show on your credit report. Everyone should check their personal credit history at least once a year. But sometimes once a year isn't enough. A thief can steal your identity and destroy your credit within weeks or months. Excessive inquiries, late payments and high credit card balances affect your credit score.
Consequences of a Negative Credit File
Once delinquent and past due accounts show on your credit report, it takes time to dispute these fraudulent charges and clear your good name. Applying for an auto loan or mortgage loan can result in a credit denial or much higher interest rates. Those who don't regularly check their credit profile may not realize they have a problem until a lender rejects their application for financing. If you are applying for a government job or a job in the banking industry, bad credit resulting from identity theft can reduce your employment opportunities.
Protecting Your Information
Simple measures can help reduce your risk of identity theft. Always keep your personal information in a safe location. This includes credit card statements and Social Security numbers. Do not give this information to people over the telephone and do not respond to e-mails that request sensitive information. Shred old financial documents and read statements carefully to look for signs of fraud. More importantly, check your credit report at least once a year and sign up for credit report monitoring to receive alerts if someone opens an account in your name.
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