If you want to avoid identity theft, you need to know how to catch it early. These tips can help you spot the red flags and protect your ID.
Protect your ID
There’s a reason most experts suggest keeping your sensitive information private. They recommend choosing online passwords no one can guess. And security consultants don’t advise making your credit card numbers easily available either. If the wrong people get the right information, you could easily become a victim of identity theft and spend years dealing with the aftermath.
What is identity theft?
Identity theft is a complex crime that can unfold in many ways. But the goal is the same. Thieves steal your personal information to drain your accounts. Or they may impersonate you to get credit or obtain medical services.
Unfortunately, identity theft can take on a life of its own if you don’t spot the signs early and control the damage. A thief with your Social Security number and other sensitive details can take out loans in your name. He or she may file tax returns in your name, stealing your refund. Thieves can also run up huge account balances that could haunt you for years.
Related: How to Repair Your Credit After Identity Theft
How to spot identity theft
If you want to avoid identity theft, an ounce of prevention really is worth a pound of cure. Here are some important red flags to watch out for and protect your ID.
Keep an eye on your bank accounts
The Federal Trade Commission (FTC) says to check your bank statements for withdrawals you don’t recognize. Do the same for your credit cards. Unauthorized transactions indicate that someone has their hands on your account details — a major red flag for identity theft. If your credit card or bank account is compromised, report the fraud immediately to the card issuer or bank.
Question debt collectors
Don’t just block debt collectors or throw out those notices because you don’t recognize the debt. Collection attempts for accounts you don’t recognize could mean someone’s trying to con you out of information. You’d be right not to provide identifying details they can use to steal your identification.
But a legitimate collection you don’t recognize could be more sinister — indicating that someone’s already stolen your ID. The ID thief has already opened accounts in your name and defaulted on them. So verify the debt with the original creditor, because it might be real. If you fail to detect and stop this quickly, identity theft could ruin your credit score and your finances.
Scrutinize medical bills
Medical ID theft takes place when someone uses your personal details and health insurance information to receive care in your name. If you receive medical bills you don’t recognize, it’s likely you’re already a victim.
You might not pay much attention to your medical paperwork, especially if you have good insurance coverage. But medical theft could cost you more than money — someone else’s information in your file could cause medical errors and cost you your life! You might, for example, receive a medication you’re allergic to, if the person masquerading as you received it with no problems.
Review your credit reports
You can avoid identity theft and spot fraud early by reviewing your credit report regularly. To comply with US law, credit reporting agencies must provide you with a free copy of your credit report each year. By requesting a report every four months from one of the major credit bureaus — Experian, Equifax, and TransUnion — at AnnualCreditReport.com, you can track your credit at no cost.
Alternatively, you can hire a service to monitor your credit for you. Credit monitoring services alert you any time someone applies for credit in your name or alters an account — for instance, an address change.
With credit monitoring, you’ll know right away if accounts are being opened with your name and personal details. Armed with this information, you have the right to dispute incorrect information and have it removed from your credit reports. You can freeze your credit report, change your passwords, and protect yourself from further harm.
Make sure you receive all your bills
Missing bills are another sign your identity may have been compromised, notes the FTC. This could mean someone has changed your billing address, which is a sign fraud is in play. If you get your statements online, contact your creditors if statements go missing. A thief could have changed the email address associated with your account.
Pay attention to data breaches
If you learn about a data breach, check to see if you have done business with that company. It should contact you if you’re affected. However, not all companies do this all the time. If a breach occurs, take special care to protect your ID. Keep a closer eye on your accounts. In addition, you may be eligible for free fraud monitoring after a breach. This service was granted to consumers after the Equifax data breach of 2017, which affected more than 148 million people.
Related: FICO and Vantage Scores in 2019 (How They Affect Your Loan Interest Rates)
Avoid identity theft: just pay attention
Identity theft can wreak havoc on your financial life and your credit score. However, you can minimize the damage if you catch it early. Fortunately, it’s not too hard to spot identity theft if you’re paying attention.
Keep all your personal data private, and watch over all your accounts to ensure you catch fraudulent charges right away. Also take advantage of any security features you may have access to, including password protection, multi-factor authentication, and software products that can protect you from fraud on your home computer.
If you notice changes or charges that don’t seem right on your accounts, notify your bank, medical provider or credit card issuer right away. And if all of this vigilance gives you a headache or you’re just too busy to do it, no problem. Get a credit monitoring service. Alternatively, you can freeze your credit reports (from all bureaus) so that nobody — not even you — can open any new accounts in your name.
