What do identity theft and your credit have in common? As a victim of identity theft, your credit can be ruined often times before you even realize you are a victim. The goal of an identity thief is to use your personal information for their economic gain. Once an I.D. thief has access to information such as your name, address, phone number, drivers license number or social security number many different accounts can be opened in your name. Common types of accounts opened are bank credit cards, store credit cards and utilities such as electricity or phone. Once the accounts have been opened the thief will then purchase goods or services without any intent of paying for them. When bank or store credit accounts are opened a common practice is for the thief to purchase items that can easily be resold such as jewelry or electronics. Since there is typically a grace period of approximately three weeks after the close of the billing cycle before payment is due, it can take eight or more weeks before letters and phone calls begin arriving from the creditor demanding payment. This may be your first indication that there is a problem. If the account was opened using an address other then your own, then statements or past due notices will not reach you that would have alerted you to the problem. Unfortunately you may not discover that you credit has been damaged until you try to open a new credit account and are declined.
Imagine what this would mean if you are trying to purchase a home or car. In the case of a home mortgage you will be outright declined with today's strict lending standards. When it comes to an auto loan you can plan on paying a sky high interest rate meaning you'll be driving less of a car for the money. If utility accounts are opened in your name it is likely that the identity thief has already had payment problems with a utility, otherwise they would have been more likely to open the account in their own name. It is entirely possible that the monthly bills will be paid until the I.D. thief moves to a new residence and then decides to not pay the final bill. After trying to collect payment for approximately 60-90 days the utility will turn the account over to a collection agency. Any account that goes to collection and is reported to the credit bureaus will have a significant negative impact on your credit. Again you may never know about this until you try to open a new account and are declined or are monitoring your credit. Who is most likely to steal your identity? Despite all of the publicity regarding identity thieves stealing company laptops or hacking in to computer systems containing personal account information of customers and employees the sad truth is that you are more likely to have your identity stolen by a family member.
Family members have much easier access to your credit/debit cards and online account passwords or pin numbers. Any unauthorized purchase using your personal account is a form of identity theft. How do thieves steal identities? Family members simply have to look inside your purse or wallet for account numbers and then either guess your online password or know where you have it written down. This makes it very simple to make unauthorized purchases. Professional identity thieves use many different sources to gather your personal information. They may hack into a company's computer system and steal thousands of files containing employee social security numbers or customer account information. Other methods to steal identity information include buying the information from a bank employee or a restaurant employee who uses a reader to scan your card. There are many ways for a determined thief to gain access to your personal information. Your best defense is to be alert to unusual credit activity and to monitor your credit. What is your identity theft risk factor? What steps do you take to protect your personal information?
Good habits to practice: Closely review your credit card and bank statements each month? Check bank and credit card statements for any unusual activity and question transactions you do not recognize. It has become more common for thieves to process small charges, under $10.00, on stolen credit cards with the hope that the card holder will ignore the charge. These small charges multiplied over hundreds or thousands of accounts can add up to lot money for the thief. Use a shredder for papers with personal information. A cross cut shredder is recommended. Shred all documents that contain any type of personal information even name and address. It may seem unnecessary but why give a potential thief anything easy to get. Use a cross cut shredder rather than a strip shredder. Cross cut shredders turn the papers into confetti sized pieces and make it very difficult to reassemble the pieces. When ordering new checks from your bank, have them mailed to your local bank branch rather than your home. A box of new checks sitting in your mail box is an invitation to have your checking account drained. It could be days or weeks before you realize that they were stolen since you didn't know they had arrived. When your bank receives your check order they will call you to let you know and also have you sign a log book that you picked them up.
Don't let mail build up in your box. Collect the mail from your mail box as soon as possible after it is delivered. Mail can be an easy target for someone looking to steal your identity. Mail containing insurance, medical, credit card or bank statements, utility bills, payroll checks or stubs and government correspondence such as Medicare can have valuable personal information. If you are going to be away from home and not available to pick up your mail in a timely manner simply have the post office hold it for you until you return.
Do not carry your social security or debit card pin number in your purse or wallet. Social Security numbers are the Holy Grail in the identity theft world. Never carry your Social Security card in your purse or wallet because if the purse or wallet is lost or stolen thieves will have a much easier time destroying your credit profile. Also, do not write down your ATM pin number and carry it with you for the same reasons.
Turn off receiving preapproved credit card offers. Preapproved credit card offers are like gold to an identity thief. To stop unsolicited credit offers go to http://www.optoutprescreen.com and follow the instructions. It can take 2 to 3 months for the offers to stop arriving in your mail box. This will not affect your ability to open a new credit card account but simply stop the offers being mailed to you.
Do not give personal information over the phone or internet. If you receive a call, email or text from anyone saying they need to verify account numbers, passwords etc DO NOT provide the information. Your bank or credit card company will never contact you and ask for this type of personal information, they already have it. The same holds true for any business you have a financial relationship whether they are an online or brick and mortar company. The best tactic to take is to never give personal information unless you initiated the contact. This way you can be sure who you are talking to.
Signs you may be a victim of identity theft:
* Statements no longer arrive as before. The thief may have changed the account address. * Unauthorized credit card purchases or bank withdrawals occur. *You begin receiving calls from creditors or collection agencies regarding accounts you did not open. * You are denied credit do to negative factors such as past due accounts when you know all accounts are paid on time.
What to do if your identity is stolen:
* File a police report
*Notify you bank if bank accounts have been compromised. You will likely need to close the existing account and open a new one. *Notify any creditors of affected accounts. Again, you will likely need to close the existing account and open a new one. *Issue a fraud alert with the credit bureaus. Contact any one of the three credit reporting agencies to initiate a fraud alert on your file. The bureau you contact will then notify the other two. *Closely monitor your credit on an ongoing basis. The easiest and most effective means to monitor your credit profile is to enroll with a credit monitoring company.
What will likely happen to your credit profile? You have worked long and hard to build you credit. A single 30 day late on your credit can lower your score by as much as 100 points. Multiple 30, 60 or 90 days late will hurt your credit even further and will make future borrowing either not available or very expensive. You will need to contact the credit bureaus in writing to dispute any entries on your profile for accounts you did not open. This is when a police report can be helpful to document the unauthorized account activity. The bottom line is that it is better to be overly cautious when it comes to protecting your identity and doesn't really take that much time or effort. Do not give out your personal information to anyone you did not initiate contact and shred, shred, shred.
Identity Theft Facts Identity Theft By Family And Friends Identity Theft - 5 Ways You Can Become a Victim - Identity Theft Protection and Credit Card Fraud Five Myths Concerning Identity Fraud A Review of Krolls Identity Theft Shield Program The Urgency of ID Theft Prevention
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