How to Protect Yourself from Identity Theft

Why Should You Protect Your Credit?

Your credit is a valuable asset that must be protected; it is the difference between having good credit and bad credit. Good credit will bring freedom and opportunity while bad credit can leave you desolate and broke. The biggest precaution you can take in protecting your credit is consistently monitoring your credit report. I suggest you do so quarterly.

You can obtain one free credit report each year through Annual Credit Report at www.annualcreditreport.com. The free report does not come with your credit score however you can pay a small fee if you’d like to know it. The cost of your credit report can vary but the cost not to check it a few times a year is much greater.

The saying you are innocent until proven guilty does not apply to an identity theft victim. Your creditors just have to report that you were late or delinquent in your payments and the nightmare begins. The proof is in the pudding and if you don’t have concrete evidence that you were in fact not late, your creditor wins and you lose! This is especially frightening if someone has stolen your identity. If you are innocent, it will cost YOU money to go to court, track down documentation, hire lawyers, etc. Your creditors cannot be held liable as there is no way they could have known you were a victim of fraud. Chances are that you will not find or be able to identify the thief and it will cost you a fortune to clear your name. The best defense is to be proactive by safeguarding your personal information.

How can I safeguard my credit?

The most important ways you can protect your identity from thieves:

1. Buy a shredder Shredders are inexpensive these days; I suggest buying a heavy duty one from Costco for about $99. There are less expensive shredders in most office supply stores. The point is BUY one. Use it religiously. It is the cheapest and easiest way to protect your privacy.
   
   Any paperwork containing personal information such as your social security number, account numbers, address, phone number etc., MUST be shredded before it hits the trashcan. Most thieves will look through trash; it is the most common method in gaining access to personal information. Therefore, shred the following
   1. Anything containing your SSN number
   2. Any credit card receipts
   3. Paystubs
   4. Bank statements, deposit receipts
   5. Tax returns
   6. Utility bills
   7. Credit card offers you get in the mail
   
   The rule of thumb –make it a habit to shred ALL paperwork. PERIOD!
2. Pull your credit report at least once a year for free from www.annualcreditreport.com. As I have already stated, I suggest pulling it more often. Currently, this may cost you about $35 for a tri-merged report. Note: Lots of credit monitoring companies will charge an annual fee for their services. You can save a few bucks by joining. This will allow you to pull your own reports as often as you like.
   
   What you’ll want to look for are accounts that belong to you. If you find indications that your identity may have been stolen, don’t panic. Use the “credit repair” methods to challenge any accounts you know aren't yours. It could just be a mistake.
   
   The next step is to look for inquiries. If you notice many inquires and know that do not belong to you challenge this too. You can also put a fraud alert on file with the credit bureaus.
   
   Make sure your report is as clean and tidy as possible. This will help should you decide to make a major purchase at any time. Cleaning up your credit can take 30-90 days. Also I would like to point out that under “UNIVERSAL DEFAULT” it is becoming an industry practice to raise rates on existing credit card rates if other credit lines go delinquent. Once a credit card company raises your rate, it is difficult to get them to lower it again, even if your credit report has been corrected.
   
   The items you will want to look on your credit report:
   1. Late pays – are they accurate (you can challenge them if they are not accurate wink*wink*)
   2. Old credit (like closed accounts, old delinquent marks) on your report that should come off? Credit lines which have been closed or had no activity for 7 years should not be on your report, including derogatory credit.
   
   Secure your paperwork. Most of the time identity thieves are your closest friends or family. You can secure paperwork in a locked file cabinet or rent a safe deposit box. A safety deposit box is not as convenient as a file cabinet but it is the best way to protect your privacy.
3. Remove your name from mailing list. You can find out how under the Junk Mail drop down in this Section.

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