How to Protect & Monitor Your Credit and Identity

Identify theft is so common these days.  There are many steps you can take to protect your identity and prevent unauthorized loans and credit cards in your name.  It’s very time consuming and expensive to fix identity theft once you become a victim, so it’s worthwhile to take the appropriate steps to prevent it in the first place.

💡Fun Facts:

1) Approximately 15 million Americans have their identity stolen each year
2) Identity theft occurs once every 20 seconds
3) According to Javelin Strategy, identity theft cost business over $50,000,000,000

Monitor Your Reports

Nowadays, it’s important to know where you stand with the major credit reporting agencies and also to protect yourself against identity theft. Whether you need to apply for credit, or maintain what you already have, it’s easier than ever to keep tabs on what’s being reported, and just as simple to dispute any inaccuracies should something end up on your report that doesn’t belong to you or isn’t correct. 

Major Credit Bureaus

There are three major credit reporting agencies which include: Experian, Trans Union and Equifax. These agencies now make it easy to create an account where you can manage your credit, work to improve it, or even freeze your credit if you suspect you are a victim of unauthorized activity, or would like to avoid becoming one. With identity theft and scams on the rise, consumers also have the option to freeze their credit so no one can fraudulently apply for something in their name.

Freezing Credit

If you want to freeze your credit, the major credit agencies make it fairly simple. You can visit each site and sign up for a free account. From there you can put safeguards on your credit such as a freeze, so no one but you can unlock it when needed. It’s a good idea to do this, because it’s an easy way to safeguard your financial wellbeing from falling into the wrong hands. It’s a free and easy way to ensure no one can use your information and identity for nefarious purposes. 

Apps

There are also services which are free to join which will monitor your credit reports from the major bureaus and alert you if they detect any suspicious activity related to your identity. Credit Karma is one such free service which monitors your credit reports on TransUnion and Equifax. You can easily create an account to keep tabs on your credit history, activity and progress through the app or on your web browser. They will let you know if your score goes up or down, or if any activity related to your credit looks suspicious. They also have tips on improving your credit score and will show offers based upon what you qualify for should you be looking for a new credit card or loan.

Credit Wise is another free service which is offered through Capital One and works in a similar way. If you are a CapitalOne customer, you can sign up through the app or by logging into your account. They will monitor your credit report from TransUnion and show the elements which are affecting your score such as on-time payments, your oldest credit line, what percentage of your available credit you are using and if there are any recent inquiries or new accounts opened. It also shows your total credit line which is a combination of everything you have open. They have a decent alert system as well and will let you know if anything suspicious is detected in connection with your identity.

You can also monitor your FICO score directly through FICO by creating an account at myfico.com. Your FICO score is based on your three major credit scores and is generally what lenders will look at to see if you are a good credit risk. FICO offers a free plan and also has paid options, depending on what you would like to keep track of. The free plan gives your FICO score and monitoring from one of the three major bureaus. The paid plan gives a lot more and includes all three credit bureaus, identity theft insurance, updated versions of your score which are different for various types of financing such as an auto loan, insurance or a mortgage, as well as 24/7 monitoring of all credit related financial activity.

Identity Protection Services

If you have been a victim of suspicious activity, or have received notification that your identity was found on the “dark web,” you may want to consider a paid identity protection service. There are a number of reputable companies which will monitor your identity online and send alerts for anything out of the ordinary. They will also assist you if there is a breach with your information revealed, and some even guarantee coverage up to a million dollars in losses should you become a victim of such a crime while employing their services. They will also monitor your credit reports, home title, financial transactions and offer features such as safe browsing, and privacy settings for your internet activities. Some top names in the industry include Identity Guard, LifeLock™, IdentityForce and Aura. If you are considering a paid service, take a look at the services and customer reviews to see which is the right fit for your needs.

Shred, Shred, Shred

One of the easiest and most important ways to prevent theft is by shredding any and all documents that have your personal information, especially financial documents like bills, credit card offers and bank statements.  Home shredders are relatively inexpensive and can be very effective.

Credit Card Companies

Most major credit card companies now offer credit reports and monitoring services at no extra cost to their customers. This will show you, on a monthly basis, how much your score increases or decreases, or if it stayed the same in a 30 day period. You can also access your TransUnion report to monitor activity. They also include a credit simulator which can estimate how you can improve your score with a payoff plan or or how it will be affected with various types of purchases added to your credit line usage. 

OPINION

Identify theft is becoming more and more common, so it’s even more important that you take the right steps to protect your identity and financial information from getting stolen. There are “dark web” sites where stolen information is sold and there is a constant stream of large companies getting hacked and customer information getting stolen. Make sure all your passwords are unique and kept safe and use 2-factor authentication features when available. Definitely shred any type of personal and financial papers and mail that you receive. And avoid getting your tax refund stolen by going to the IRS website and activating their PIN security feature.

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