This article was originally published on August 28, 2024, and was updated as of August 4, 2025 to reflect timely credit information.
Key takeaways about credit fraud:
- In today’s digital landscape, protecting your credit is not optional – it’s essential.
- Credit fraud and identity theft can wreak havoc on your financial health.
- These 10 proactive steps will help you defend your credit and recover faster if fraud occurs.
- Credit protection isn’t a one-time action. It’s an ongoing process of awareness and vigilance.
In the age of digital everything, your credit profile is more than a number – it’s your financial passport. It impacts your ability to buy a home, secure a car loan, get a business line of credit, or even land certain jobs. That’s why credit fraud is such a serious threat. And unfortunately, it’s more common – and more sophisticated – than ever before.
Identity theft has affected many Americans, with credit fraud topping the list of complaints. Add to that the constant stream of data breaches and hacks that expose Social Security numbers, bank account details, and personal information, and it’s clear: protecting your credit isn’t just smart – it’s essential.
At CredEvolv, we don’t just help consumers build credit and qualify for loans. We help them protect it. Here are 10 critical steps you can take to protect your credit from fraud and build a stronger financial future..
1. Monitor Your Credit Reports Regularly
The foundation of credit fraud prevention starts with awareness. Monitoring your credit report helps you catch suspicious activity early – before it becomes a bigger issue.
You’re entitled to one free credit report per year from each of the three major credit bureaus: Equifax, Experian, and TransUnion, which allows you to keep a close eye on any unusual activity.
Look for:
- Accounts you don’t recognize
- Hard inquiries you didn’t authorize
- Name or address changes you didn’t make
- Delinquencies or balances that look off
If you spot anything suspicious, dispute it immediately with the credit bureau. Acting quickly can limit the damage and help restore your credit faster.
2. Set up fraud alerts
Think of a fraud alert as a red flag to lenders. When it’s in place, creditors must take additional steps to verify your identity before issuing new credit in your name.
To set one up, contact any of the three bureaus – they’re required to notify the others. Fraud alerts last for one year and can be renewed annually. If you’ve been a victim of identity theft, you may qualify for an extended alert (7 years).
Bonus Tip: Fraud alerts are free and won’t affect your credit score.
3. Freeze Your Credit for Maximum Protection
A credit freeze is one of the most effective tools to prevent credit fraud. It restricts access to your credit report, making it nearly impossible for identity thieves to open new accounts in your name.
Unlike fraud alerts, credit freezes must be placed separately with each credit bureau – but the protection is worth the extra step.
✅ Free to place and lift
✅ Doesn’t affect your credit score
✅ Can be lifted temporarily when applying for new credit
While a freeze won’t stop someone from using your existing credit cards fraudulently, it does stop them from opening new ones.
4. Use Strong Passwords and Two-Factor Authentication
Your online financial accounts are only as safe as your passwords. And many people still use ones like “123456” or “password1.”
Here’s how to lock down your digital life:
- Use a unique password for each account
- Include a mix of uppercase/lowercase letters, numbers, and symbols
- Avoid names, birthdays, or common words
- Use a password manager to keep track
- Enable two-factor authentication (2FA) whenever available
With 2FA, even if a hacker gets your password, they still need a second code – usually sent to your phone – to gain access.
As data breaches become increasingly common, staying informed is among the best ways to be proactive about protecting your credit.
5. Watch Out for Phishing Scams
Phishing scams are designed to trick you into giving away personal or financial information. They can look like:
- A fake bank email asking you to “verify your account”
- A text message about a suspicious login attempt
- A phone call from someone pretending to be the IRS
Always be suspicious of unsolicited requests for personal information. Instead of clicking links or calling back the number in the message, go directly to the company’s website or use a verified contact method.
And remember: No legitimate organization will ever ask for your Social Security number or login credentials via email or text.
6. Check Your Bank and Credit Card Statements
Credit fraud doesn’t always start with a bang. Many criminals test stolen credit card numbers with small charges first – often just $1 or $2 – to see if they go through. That’s why checking your bank and credit card statements regularly is crucial.
If you spot unfamiliar charges, report them to your bank or card issuer right away. Many financial institutions offer:
- Real-time alerts for purchases
- Notifications for unusual activity
- Account lock options via mobile apps
Setting these up gives you a real-time line of defense.
7. Shred Sensitive Documents Before You Toss Them
It’s easy to focus on digital security and forget about physical credit protection. But dumpster diving is still a tactic some identity thieves use to steal:
- Credit card offers
- Bank statements
- Tax forms
- Medical bills
Buy a cross-cut shredder (not just strip-cut), and shred any paper containing personal information before tossing it in the trash.
8. Consider Identity Theft Protection Services
If you want extra peace of mind, you might consider a credit monitoring or identity theft protection service.
These services often include:
- Continuous credit report monitoring
- Alerts for suspicious activity
- Dark web scans for your SSN or account numbers
- Assistance recovering stolen identity or fraudulent charges
Many banks and credit cards offer free credit monitoring. But premium services offer more comprehensive protection – and often include identity restoration assistance if something goes wrong.
9. Stay Updated on Major Data Breaches
A single data breach can expose your personal data to hackers – and they might wait months or years before using it.
Stay on top of data breach announcements from:
- Your financial institutions
- Major retailers
- Healthcare providers
- Government agencies
If your data has been compromised:
- Change your passwords immediately
- Monitor your credit reports and bank statements
- Set a fraud alert or freeze your credit
- Report any suspicious activity to the FTC
Being proactive can make all the difference.
10. Educate yourself and your family.
The best credit protection begins with education. Knowing how identity theft happens – and how to avoid it – is powerful.
At CredEvolv, our nonprofit credit counselors don’t just help clients improve their scores – they teach people how to protect their credit for life.
Even if you’re not enrolled in our platform, you can:
- Read up on the latest credit scams
- Teach your kids and elderly family members to spot phishing attempts
- Encourage regular password changes and digital hygiene
- Share resources like this blog to raise awareness
Fraudsters prey on what people don’t know. The more informed you are, the safer your credit will be.
Final thoughts: Protecting Your Credit is an Ongoing Commitment
There’s no way to 100% guarantee you’ll never become a victim of credit fraud or identity theft. But by following the steps outlined here – and staying vigilant – you can dramatically reduce your risk and bounce back faster if something does go wrong.
Here’s the good news: You’re not in this alone. Whether you’re just starting to build credit, working to rebuild after setbacks, or protecting what you’ve worked hard to earn – CredEvolv is here to help.
Our platform connects you with certified, nonprofit counselors who can support you every step of the way – from improving your score to implementing credit security best practices that will serve you for years to come.