My Financial Healthcheck

Identity theft is when someone uses your personal information to open up financial accounts, including with banks and credit cards. The instances have been increasing over the past few years, particularly with more and more criminals getting online, and consumers becoming more comfortable sharing their information on the web.

So is the answer to avoid the internet? Maybe, but probably not very practical – and in the next 3 or 4 years, as more common services become available online, maybe not even possible – and at a minimum not convenient.

So here are some things you can do to prevent it.

To start, be proactive about the security of your brith date, social security number, and credit card numbers (including expiration and security codes). Don’t just blurt this stuff out anywhere. Shout personal details over the phone on a crowded bus or some other public place may get that bill collector off your back, or save you from having to return a call. But in the long run this is where most criminals make their easy money.

Ok, that’s simple enough, but often not all that it takes to keep your information safe.  To get in front of identity theft hassles before they happen, we reccomend the following 3 steps.

All three credit bureaus offer credit monitoring for about $15 a month. That includes unlimited access to your report and notifications of any changes to your credit file, plus a few fancy extras. There are a few monitoring services online geared toward folks who want to maintain visibility as it relates to fraudulant credit activity, some of them even offer insurance should your identity be stolen while on their watch.

I have to say that this is all well and good, but really these services only let you know if you’ve fallen victim, and offer help once you’re in trouble. Personally, I’d rather focus on avoiding it in the first place.

Step 3. Credit Freeze
This is the nuclear option. It is basically like having an “unlisted” credit report. It blocks potential creditors, employers and landlords from seeing your credit report, and prevents any new accounts from being opened.  The down side is that you can’t open new credit accounts with the Freeze on, which may be inconvenient, as it takes 3 days to un-freeze your accounts.

These are the basics. Take it seriously to avoid being caught in the long and painful process of undoing identity theft. If it does happen there are steps you can take. You can learn more about these in our article Has your identity been stolen? (we hope not)