Understanding the Risks of Identity Theft and How to Avoid Them

Identity thieves use a variety of tools to steal personal information. Some are low-tech. For example, they might take bank and credit card statements, medical documents, or tax forms from your mailbox.

Other methods include stealing your child’s social security number to obtain credit and even synthetic identity theft, in which criminals use a patchwork of stolen identity data to create a new fictitious person. Warning signs needing identity theft help include unauthorized charges in your financial accounts and debt collection notices in your name.

Monitoring Your Credit Report

There are different types of identity theft. For example, criminals can use stolen credit card or bank account information to make fraudulent purchases or apply for loans in your name. They can also use your Social Security number to file false tax returns and claim bogus refunds. They can even obtain your medical records to commit healthcare fraud.

Financial identity theft can be hard to spot. Still, some warning signs include unexplained charges on your credit card or bank statement, new cards you didn’t open, and calls from debt collection agencies about accounts you didn’t open. The most severe cases of identity theft can cause you to lose out on loan opportunities and damage your credit rating.

To prevent identity theft, be cautious when giving out personal information and always shred paperwork that contains sensitive data like PINs for debit or credit cards or your bank account. You should also avoid carrying your Social Security number in your wallet or writing it on checks.

Changing Your Passwords

Using different passwords for each account helps reduce your risk of identity theft because hackers can’t access multiple accounts with just one piece of stolen information. Create strong passwords by adding numbers and letters, making them more difficult to guess, and by using a phrase that’s easy for you to remember (changing the words of a popular song or poem, like “the quick brown fox jumps over the lazy dog” into something such as “tqbfjotlditb,” for example).

Thieves can use your information to take over existing credit cards and bank accounts, open new accounts, make purchases, and even commit criminal activities in your name. Often, you won’t know you’re a victim until you receive a bill for items you didn’t buy or a call from debt collectors regarding an account you didn’t open.

Limiting the amount of personal information you provide online and checking your social media privacy settings are also recommended. Documents containing sensitive information, such as tax forms, ATM receipts, credit card and bank statements, and pre-approved credit offers, should also be destroyed.

Using a Password Manager

Fortunately, there are ways to help mitigate the risks of identity theft. You can monitor your credit report, avoid public WiFi networks, and shred any documents that contain personal information before throwing them away. You can also use password managers to store secure passwords and authenticator apps to protect your online accounts.

You can also prevent physical identity theft, like carrying your credit card and ID in a pouch or wallet under your coat or under your desk at work. Using passwords with a mix of alphanumeric characters, special symbols, and capital letters helps protect against data breaches. Installing software that guards your computer against viruses and other dangers is another way to keep it safe. It is still possible for scammers to target you with phishing emails and other dangerous assaults, so exercise caution when opening files or clicking links in emails. Additionally, they can set up a keylogger on your device, which logs all keystrokes and provides hackers access to your account numbers and passwords.

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Keeping Your Information Safe

Identity thieves use phishing attacks, malware, skimming devices, and old-fashioned dumpster diving tactics to steal personal information. They can then use this information to commit fraud. Recovering from identity theft can cost hundreds, even thousands of dollars, and take months to resolve. It can also damage your credit score and affect your ability to get jobs, loans, and housing.

To help prevent identity theft, review your credit report regularly and check bank statements and credit card accounts for unauthorized charges. Avoid oversharing your information on social media, and don’t click on suspicious-looking links in emails or text messages. Keep your passwords private and change them often. Also, shred old financial documents and pre-approved credit offers before throwing them away. Lastly, ensure your trash is secured if you have roommates or employ outside help to collect it. Also, consider signing up for an identity protection service that can monitor your credit and statements for suspicious activity.

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