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.
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Mike Collins is obsessed with building new streams of income and achieving financial freedom so he can live life to the fullest with his wife and 3 amazing children. Read more about his adventures at 
One thing that’s become clear lately is that it isn’t just a matter of using strong passwords, but using a different username/password combination for each site containing sensitive information. When hackers get long lists of login information, one thing they do is try to enter those usernames and passwords into other websites like banks, credit card companies, email, etc. just to see if they’ll work. If you change just one character for each account, or have a base username or password (doesn’t need to be both) with something extra at the beginning or end it then it won’t work. You can choose something relevant to the site or account to make it easier, like using (base_password)_BoA for your Bank of America account and (base_password)_Chase for you Chase account. (Obviously (base_password) is a stand in for whatever your already secure password is.)
I always shred documents with my name, address, or other personal information on it.
When it comes to creating strong passwords – the length of the password is probably one of the most important factors for making a password really hard to break. The longer the better.
To help manage my passwords, I use LastPass, which is a great password management application.
The key with your credit reports is to check them on a four month revolving basis. Checking all three at once will definitely give you a good read on where you are, but then you’re ‘in the dark’ for another year. I have a reminder that pops up every four months, and I rotate between the three services so that we’re never more than a couple of months removed from knowing exactly what our credit report contains.
Quite interesting to note there is a few password management systems around. I’m in need of one to better protect myself online. Thanks for the tip.