Ways to Avoid Identity Theft

Having your personal information stolen creates a host of problems. Thieves can open credit accounts in your name and run up huge debts. If the problem goes unnoticed for long, identity theft can destroy your credit rating. Yet, there are ways to protect your personal information and safeguard your credit score.

Get a Paper Shredder

Thieves go to extremes to acquire your personal information. There's a technique called "Dumpster diving," in which thieves rummage through large trash bins or trash cans left on the street in search of documents containing your name and account numbers. Once thieves have this information, they can try to open new lines of credit in your name---auto loans, mortgages and credit cards. And since they have no intention of paying these loans, your name and your credit score suffers. But you can protect yourself by investing in a paper shredder. These electronic devices shred documents and make it virtually impossible for thieves to get your information this way.

Recognize Phishing Scams

Some thieves forgo rummaging through garbage bins and instead prey on the inexperienced or naive. They'll pretend to represent a legitimate business, perhaps your credit card company or other reputable company. They contact you by email or telephone and request personal information "to verify your account." Some even go as far as to create websites and 1-800 numbers that mimic real corporations. However, a legitimate company will never request your personal information by email or phone, and you should never relinquish this information, especially if you didn't initiate the call. If you receive a suspicious call from a company that purports to be legitimate, hang up the phone and contact the company. Use the number listed on your statements if it's a company you do business with.

Computer Privacy

It takes more specialized skill for someone to hack into your computer to retrieve account information. Reduce your chances of becoming a victim by installing anti-spy and antivirus software on your computer. In addition, make sure your computer's firewall is turned on. Firewalls protect your computer from unauthorized access. If you lack computer knowledge, seek help from an experienced computer user or technician. You can also ensure the safety of your personal information by assigning a password to your computer; don't use something as obvious as your child's or pet's name. Remove your Social Security number from personal checks if it's on there. And if you're denied credit for any reason, order a copy of your credit report to check for signs of identity theft.