This article was written by John Ulzheimer, Credit Expert for CreditSesame.com.
Last year marked the 14th consecutive year that the number one consumer complaint to the Federal Trade Commission was identity theft. And given the recent high profile data breaches involving some well-known retailers, there’s nothing to suggest 2014 won’t mark the 15th consecutive year. However, you can follow these simple steps on how to avoid identity theft.
1. Shred, shred and then shred some more
Not everyone is clever enough to hack a database. But, anyone has the ability to rummage through your trash and steal sensitive documents like credit card bills and banking statements. A high quality cross cut shredder is cheaper than dinner for two and will make your garbage less attractive than your neighbor’s.
2. Don’t forget to check your mail
Identity theft isn’t always a high tech crime resulting from phishing emails and malware. True name fraud, where a thief applies for credit in your name, can occur simply by grabbing one of those credit card solicitations out of your mailbox. Don’t make it a habit of leaving your mailbox unchecked or it will undoubtedly fill up, quickly, with high value mail…high value to a fraudster, that is.
3. Opt out
If you’d like to minimize the risk of a credit card solicitation falling into the hands of a fraudster, eliminate the solicitations. You can do this through a process called “opting out.” The Fair Credit Reporting Act allows you to have your name removed, permanently, from any pre-approved mailing list sold to creditors by the credit reporting agencies. You can opt out at www.optoutprescreen.com. You won’t need a credit card because opting out is free. Give the process about 60 days and you’ll notice a significant reduction in the volume of mail you receive.
4. Free credit monitoring
You can, and should, take advantage of free credit monitoring services, like that offered by CreditSesame.com. Credit reports are ground zero for true name fraud and we’re all too busy to sit around and stare at our credit reports waiting for something to happen. Credit monitoring services passively track changes to your credit reports and notify you of any changes that are indicative of true name fraud. For example, if a new address, inquiry or account hits your credit report, it could be because of someone applying for credit in your name. Credit monitoring services will notify you via text message or email so that you can address the problem immediately.
5. Check or freeze your credit reports
If credit monitoring isn’t for you, then at the very least you should check your credit reports yourself for potential fraud. You can check your credit reports, for free, at www.annualcreditreport.com.
If you’re the type that would rather go one step further than credit monitoring, then a security freeze or credit freeze might be for you. Freezing your credit reports takes them out of circulation and no new lender can access them. And if a lender cannot access your credit reports, they’re not going to extend credit in your name. A credit freeze is free if you’ve been the victim of fraud in the past. If not, there’s a fee to place the freeze. The fee generally ranges from $3 to $15 per credit report, and is determined by the state where you live. Keep in mind that you’ll have to remove the freeze if you want to legitimately apply for new credit or your lender won’t be able to access your reports or your credit scores.
John Ulzheimer is a nationally recognized expert on credit reporting, credit scoring and identity theft. He is twice Fair Credit Reporting Act certified by the credit industry’s trade association and has been an expert witness in over 140 credit related cases to date. Since 2004 John has been interviewed and published over 3,000 times on the topics of personal finance and consumer credit. Formerly of Equifax and FICO, John is the only recognized credit expert who actually comes from the credit industry.
More from Manilla.com:
- 5 Ways Identity Theft Can Wreck Your Credit
- Avoid Identity Theft By Tracking Bank and Credit Card Balances Daily
- Avoiding a Financial Scare: How to Help Protect Yourself Against Identity Theft