Identity Theft 101: Learn How to Protect Yourself

What is identity theft?

Identity theft is a type of crime where someone's personal or financial information is stolen and used without their permission. It can wreak havoc on a person's financial situation and credit score for years to come, so it's important to remain vigilant to prevent having it happen to you.

What types of identity theft are most common?

Some of the most common types of identity theft to be on the lookout for include:

  • Account takeover — This is when someone takes over your bank accounts and uses them without your permission. Fraudsters will typically make purchases, withdraw money, or try to transfer money to their own account. Criminals can gain access to your accounts by stealing or guessing your login credentials. That's why good password practice is a must!
  • Credit & Debit card fraud — Credit or debit card fraud is when someone uses your card without your permission. This could mean using your physical card after stealing it or simply using your PIN, card number, and security code if they gain access to those.
  • Online shopping — If you store your credit or debit card information when shopping online, you could be putting your information at risk. All someone needs to do is gain access to your shopping accounts to make fraudulent purchases.
  • Social Security Number theft — Your SSN is one of the most desirable pieces of information fraudsters look out for. Gaining access to this can enable them to open up credit cards or loans in your name, which can have a lasting negative impact on your credit score.

How to prevent identity theft

Fortunately, there are several identity protection steps you can take to avoid becoming a victim, including:

  • Use good password practice — One of the simplest ways to protect yourself is to take a look at your passwords. Many people pick something easy to remember, but this just makes it easy for scammers to guess. Consider using a password manager which can generate secure passwords and store them for you. That way, you have strong passwords, but you won't have to remember them. 
  • Keep your SSN safe — Avoid taking your Social Security card out with you in your purse or wallet. Instead, keep it in a safe place. It's also a good idea to securely destroy any paperwork containing sensitive information that you no longer need. 
  • Regularly check your credit reports — The best way to deal with identity theft is to act fast. Many cases can occur without you realizing it for months. Staying on top of things by checking your credit reports is a great way to act fast if you see anything suspicious. There are many resources, like freecreditreport.com, that can help you keep track of activity on your credit report.
  • Learn about phishing — Many phishing emails look genuine these days, and it's easy to be fooled if you don't know what to look for. If you're not clued in about phishing, take some time to research how it works and how you can avoid it.

Identity theft FAQs

Will identity theft affect my credit?

Certain types of identity theft can have a huge effect on your credit. If a fraudster applies for any type of credit in your name, this leaves a footprint on your debt history — especially when those payments are missed. Even if the fraudster applies for a credit card and is rejected, this can negatively impact your score. 

How do I check for identity theft on my credit report?

Monitoring your credit report is a great way to watch out for potential identity theft. Any new lines of credit opened in your name will appear there, and you can easily check their authenticity. 

Things to watch out for on your report include unexpected credit rejection, unauthorized bank transactions, notice that your tax return has been filed without your knowledge, and authentication messages for accounts you don't recognize. 

If anything like this shows up on your report, it's best to check it out and follow the necessary steps below.

How do I report identity theft?

There are a few steps you can take if you're a victim of identity theft. It's best to report it immediately, starting by filing a police report. Make sure you get a copy of the police report, as you may be asked for it when you report the theft to your insurance provider or credit bureaus. 

The next step is to file an identity theft complaint with the Federal Trade Commission, which you can do online.

A final step to help protect your credit score is to place a freeze or fraud alert on your credit reports to prevent any further damage. 

Stay vigilant!

Prevention is definitely better than the cure when it comes to identity theft, so it's best to follow the above steps to protect yourself.

However, even the most vigilant people can still be affected by identity theft. Make sure you keep an eye on your credit reports and report anything suspicious swiftly.