In today’s digital world, protecting your credit from fraud is more important than ever. Hackers are becoming increasingly sophisticated, as evidenced by a recent data breach that has left billions of Social Security numbers vulnerable.
Your credit profile is a vital component of your financial well-being, impacting everything from your ability to secure loans to the interest rates you pay. Here at CredEvolv, we not only help you improve your credit, but educate you about how to maintain and protect your credit over the long haul.
“How can I protect my credit from fraud?”
When your credit is compromised, the repercussions can be stressful and difficult to recover from. Read on to learn the 10 key steps you can take to protect your credit from fraud.
1. Monitor your credit reports regularly.
The first line of defense against credit fraud is to check your credit reports often. Federal law entitles you to receive free credit reports 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 unfamiliar accounts, incorrect personal information, and unauthorized inquiries. If you notice anything suspicious, report it immediately to the credit bureau in question.
2. Set up fraud alerts.
A fraud alert is a precautionary measure that notifies creditors to take extra steps to verify your identity before opening new accounts in your name. Setting up a fraud alert is simple and can be done by contacting one of the three major credit bureaus. Once you set up a fraud alert with one bureau, it will notify the other two, ensuring that all creditors are aware of the potential risk. Fraud alerts are free and last for one year, but they can be renewed if necessary.
3. Freeze your credit.
For an added layer of protection, consider placing a freeze on your credit. A credit freeze restricts access to your credit report, making it nearly impossible for fraudsters to open new accounts in your name. While this means you’ll need to unfreeze your credit when applying for loans or new credit cards, the peace of mind it offers is invaluable. You can freeze your credit by contacting each of the three major credit bureaus. It’s important to note that freezing your credit does not impact your credit score and can be lifted temporarily or permanently at your request.
4. Use strong, unique passwords and enable two-factor authentication.
Online security is a vital component of protecting your credit. Weak passwords make it easy for hackers to access your financial accounts. Use strong, unique passwords for each of your accounts, combining uppercase and lowercase letters, numbers, and special characters. Avoid using easily guessed information, such as birthdays or common words (especially “password”). Then, enable two-factor authentication (2FA) whenever possible. 2FA requires you to provide two forms of identification to access your account, typically your password and a code sent to your mobile device. This extra layer of security makes it much more difficult for fraudsters to gain unauthorized access to your accounts.
As data breaches become increasingly common, staying informed is among the best ways to be proactive about protecting your credit.
5. Be cautious of phishing scams.
Phishing scams are a common tactic used by cybercriminals to trick individuals into providing personal information, such as Social Security numbers and account details. These scams often come in the form of emails, text messages, or phone calls that appear to come from banks, credit card companies, and other legitimate sources. Be cautious of unsolicited communications asking for personal information, and always verify the authenticity of the request by contacting the company directly using a known and trusted phone number, email address, website, or mobile app.
6. Check your bank and credit card statements regularly.
Frequently reviewing your bank and credit card statements is essential for quickly spotting unauthorized transactions. Even small, seemingly insignificant charges can be a sign of fraud. If you notice any suspicious activity, contact your bank or credit card company immediately to report the issue and take the necessary steps to secure your accounts. Many financial institutions offer alerts for unusual activity, which can be set up to notify you via email or text.
7. Shred sensitive documents.
In the age of digital threats, it’s easy to overlook the importance of protecting your physical documents. Discarded bank statements, credit card offers, tax returns, and other materials can be used by criminals to commit identity theft. Invest in a shredder and make it a habit to destroy any documents containing personal information before disposing of them. This simple step can go a long way in preventing your information from falling into the wrong hands.
8. Utilize identity theft protection services.
These services can provide an additional layer of security by monitoring your personal information for you and alerting you to potential threats. These services often include credit monitoring, fraud detection, and identity restoration support. While there is a cost associated with these services, the protection they offer can be well worth the investment, especially if you have been a victim of a data breach.
9. Stay informed about data breaches.
As data breaches become increasingly common, staying informed is among the best ways to be proactive about protecting your credit. When news of a breach breaks, take immediate action to assess whether your information may have been compromised. Follow the guidance provided by the affected company, which may include changing passwords, monitoring your accounts, and setting up fraud alerts. The sooner you take action, the better equipped you’ll be to minimize the risks and consequences of fraud.
10. Educate yourself and your family.
Knowledge is one of the best defenses against credit fraud. In fact, it’s one of the most important things the certified, nonprofit credit counselors on the CredEvolv platform provide when you work with them. Whether or not you enroll in our platform, you should learn about the risks of identity theft and the steps you can take to protect your credit – and reading this article is one way to do that! You should also encourage awareness of any suspicious activity and stress the importance of online safety. By being vigilant and informed, you can help safeguard your credit and financial future.
Final thoughts about credit fraud
The recent data breach allegedly affecting every American serves as a stark reminder that taking proactive steps to protect your credit has never been more important. By taking the 10 steps listed above, you can minimize the risk of credit fraud and identity theft.
Remember, protecting your credit is not a one-time task, but an ongoing effort that requires vigilance and awareness. Luckily, you don’t have to do it alone. We’re here for you, whether you need to establish your credit profile, restore your credit score after it’s taken a dip, or keep your credit heathy after you’ve improved it.