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With recent mass email hacks and network outages, identity theft is a pressing concern that can have disastrous financial implications. For the 11th year in a row, identity theft was the number one consumer complaint sent to the government in 2010. We’ve started banking on our smartphones, which means our financial information could be available to anyone who gets their hands on our phone. With the information stored in your phone, a thief could open a credit card in your name, putting your credit reputation at risk.
In light of all of this, take these simple steps to monitor your finances, and ultimately safeguard your identity and your credit.
1. Check your credit report and monitor your credit score.
Your credit report is a record of all of your financial activity, from opened credit accounts to derogatory marks such as foreclosures. To make sure your credit activity is accurate and not fraudulent, you’ve got to know what’s in your credit report.
You’re entitled to one free credit report a year from each of the three credit bureaus, Equifax, Experian, and TransUnion. Stagger these free reports so that you can check your credit report every four months.
During the months when you can’t check your credit report for free, monitor your credit score and watch for any unusual fluctuations. If you suspect a mistake or fraud, make sure you know your rights when it comes to filing disputes and repairing your own credit.
If you find that your credit has been compromised due to identity theft, put a security freeze on your credit report. A security freeze can be initiated at all three credit bureaus and locks access to your credit file against anyone attempting to open a new account.
2. Check your credit card statements.
Monitor your credit and checking accounts regularly by signing up for online statements.
Being able to check your accounts daily will help you catch fraud faster and limit your losses. Go through each transaction and make sure they are accurate and initiated by you.
If you see any fishy transactions, take action. Some credit card issuers will allow you to put a temporary freeze on your credit card to stop any transactions being made while you investigate your statement.
3. Protect your accounts.
Use your home computer, instead of public computers like the ones at libraries or cafés, to check your online bank accounts and statements. Because public computers are used by many individuals, anyone can see your information saved in the computer’s internet history. Set up a secure password to your home internet connection and online banking by using these common secure password creation tips:
- Make it at least eight characters long
- Don’t use any form of your name
- Use both letters and numbers
- Use both uppercase and lowercase
- Don’t use any recognizable dates, like your birthdate or wedding date
- Use symbols, if possible
- Don’t repeat a past password
Don’t give anyone access to your account, and make sure your password is not automatically saved on your computer. Always manually type in your password. If you suspect someone has accessed it, change your password immediately. Also, don’t open any suspicious emails. If you’re unsure whether an email came from your bank, contact the bank’s customer service before you open the email or click any links. A trustworthy bank won’t ask you to send personal information via email.
4. Protect your cards.
Always use bank ATMs, which have security precautions in place that most small ATMs at corner stores and markets generally don’t have.
If your bank offers it, get your photo placed on your debit card for additional identification and write “See ID” instead of your signature on the back of your credit cards.
5. Set up automated monitoring.
Most banks will allow you to set up fraud alerts on your accounts. If a withdrawal from your account is made over a set amount, or if information, such as an address, changes on your account, your bank will notify you.
Also, before you travel anywhere, contact your bank to let them know where you’ll be and for how long. The bank won’t be suspicious of activity at your travel destination, but will red flag any local activity while you’re away.
It’s easy to remain unaware, but monitoring your finances can help you keep track of your spending and make sure no one else is spending on your dime.
Want to learn more about credit monitoring and identity theft protection services. Check out this article, which includes recommendations for free and paid credit management service that provide free credit scores, personalized savings recommendations, and financial education.