In the last few years, we've had data breaches at the IRS, grocery stores, retail stores and now a major credit bureau. After much thought, I've come to accept that my Social Security number is no longer private, and won't be for the rest of my life. In addition, because I care more about someone using my identity for financial gain than anyone else, it's up to me to monitor my financial accounts.
While I can't stop identity theft, I can take steps to minimize damage. Many strategies are available and each person must decide which strategies are best for them.
Monitor Your Credit Report
One of the best tools we have to spot identity theft is to check our credit reports. You need to check your report from each of the three credit bureaus for it to be effective. You can check them free once a year at www.annualcreditreport.com.
However, you may want to pay to see them more often. Each time you check, it will cost between $10 and $15. If you checked all three, three times a year, it would cost you about $100.
Paying for a credit monitoring service is an option but these services have both pros and cons. Credit monitoring systems will alert you to a change in your credit report. For example, if there's a request for a new credit card, the system will notify you.
The disadvantages of credit monitoring is it can be expensive: typically $120-$200 a year. Also, when you sign-up for a credit monitoring service you are likely giving the company permission to use your information for marketing purposes. And, remember they don't typically fix problems for you -- they notify you when changes happen in your credit report.
If your Social Security number is part of a data breach, you can place a 90-day fraud alert on your credit report. Report this to one of the credit bureaus and it will apply to all three. When you have an alert on your report, a business must verify your identity before it issues credit, so it may try to contact you. Plus, you get a free credit report from each bureau.
A credit freeze stops the credit bureau company from releasing your credit report or any information from it, except in certain exceptions. Credit freezes have advantages and disadvantages. Read more about this at my blog post, To Freeze or Not Freeze My Credit Report?
Beyond Credit Identity Theft
The above strategies help minimize the risk of someone borrowing money in your name. However, not all identity theft relates to credit. Thus, monitor all your financial accounts regularly, including saving and investing accounts. If you have any concerns, contact your financial institution.
Another effective strategy is to use text alerts to monitor your financial accounts. For example, I am notified by a text alert whenever a withdrawal happens (over a certain amount) from my checking accounts. Ask your financial institution if they provide this service.
Overall, stay alert with your finances!
For more viewpoints on this topic, visit Data Breaches, Credit Freezes, and Vigilance where Cooperative Extension is collecting resources.