Protect Yourself From Identity Theft

Every year millions of people have their identities stolen.  If you are one of the unfortunate victims of identity theft, it could take you months or years to repair the damage.  Identity theft can destroy your finances, ruin your credit, and prevent you from achieving your goals.  Here are a few tips to help you keep your identity safe from scammers and thieves.

Use Strong Passwords

I don’t think there is such a thing as an unbreakable password.   If a hacker is skilled enough and determined enough he will probably be able to crack your password eventually.  But that doesn’t mean you have to hand it to him on a silver platter.  You should avoid choosing a password that is easy to guess.  That includes names of loved ones or your favorite sports teams, birth dates and anything else that someone could easily discover.  And please don’t tell me your password is the word “password.”

Instead, choose a random combination of numbers, letters, and symbols that would be impossible to guess.  To make it easier to remember you can come up with a short phrase using the first letter of each word as part of the password.  This type of password will be much harder to crack.  Just don’t leave a list of your passwords next to your computer!

Shred Sensitive Documents Before Tossing Them

As high-tech as our world has become, the old scam techniques are still used as much as ever.  Dumpster diving is one of them.  If you’ve never heard of it, dumpster diving is when thieves sift through commercial or residential trash in the hopes of finding something with sensitive information on it.

There’s not much you can do about commercial sites that may store your information.  You just have to hope they are following protocols to keep your information safe.  And of course you should be doing the same at home.  That means investing $50 or so on a reliable paper shredder to destroy documents before you throw them away.  Shred all junk mail and documents that include sensitive information such as account numbers, birth dates, PIN numbers, passwords, and Social Security Numbers.  Make sure you shred all those pre-approved credit card offers too before a scammer uses one to open an account in your name.

Monitor Your Credit Report

Everyone knows they should periodically check their credit report but how many people actually do it?  Monitoring your credit report will help you spot phony charges, unauthorized accounts or other evidence of identity theft before the damage spins out of control.  The earlier you can catch the suspicious activity on your credit report the better.

There are actually three different credit monitoring agencies (Experian, Equifax, and Trans Union) and you should order copies of your credit report from each once a year.  If you go to AnnualCreditReport.com you can get a free copy of each agency’s report once per year.  This is a government run site and not a scam, but there are many similar-sounding sites that promise free credit reports and then hit you with hidden charges so make sure you are actually on the correct site before signing up for anything.