5 Ways to Protect Your Credit

Take these steps to safeguard your personal information.

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Hacker
Getty ImagesTo protect your accounts, make sure to create complex passwords that don't include your Social Security numbers or date of birth.
By Jenna Lee

Sometimes it feels like the only stories in the news these days are about data breaches. Just this week alone, the Identity Theft Resource Center has reported a whopping 480 breach cases, a 21.5 percent increase over the same period last year. Between breaches of major retailers such as Neiman Marcus and Michaels, to financial institutions like American Express (AXP), millions of consumers' social security numbers, credit card numbers, account details, passwords and other forms of personal information have been stolen, costing merchants billions of dollars and creating countless headaches for the unfortunate victims of fraud.

More importantly, identity theft can ruin your credit history and cause you to be unfairly denied for credit or have to pay outrageous rates and fees that you don't deserve.

Since data breaches probably won't stop anytime soon, now's the time to proactively protect your credit before irreversible damage occurs. Here are some strategies to maintain your good name:

1. Secure your devices and online accounts. While mobile devices often make our lives easier, they're also great opportunities for thieves to steal your information. With this in mind, limit the chances of your identity being compromised by password-protecting your devices and taking advantage of the auto-lock function, no matter how annoying it may be to input a code each time you want to access your device. Keep your malware protection software updated, and constantly run tests to ensure your computer is virus-free.

You've probably heard this countless times, but one of the best ways to secure your online accounts is by choosing strong passwords. Password123 may be easy for you to remember, but it's also super easy to guess. Instead, build long, complex passwords that include different letter cases, numbers and symbols and don't include parts of your Social Security number, date of birth or other identifying information. Even better, use a program like LastPass to generate random and ultra-secure passwords for you. Also change your passwords regularly -- not just when you hear of a data breach.

Lastly, get into the habit of logging out after you've completed your session, even if you're using your own device (and especially if you're using someone else's or a public computer). This can help prevent others from snooping around, and it only takes a second!

2. Shop safely online. With 24/7 access, no crowds and variety, online shopping is often a convenient alternative to brick and mortar stores -- that is, if you're careful about where you shop. Internet scams are becoming more elaborate, so do your research before entering your personal information online. In particular, look for these signs that may help indicate a site is trustworthy:

It encrypts your personal information. If the company's URL begins with "https" and/or has a padlock icon next to it, it indicates that it has security measures in place to prevent others from accessing your personal information.
Other people trust it. Visit the company's Better Business Bureau page or read reviews and complaints to see how they've treated previous customers.

Keep in mind that no matter how secure a site is, your information may still be vulnerable if your Internet connection is not secure. Public Wi-Fi is fine for casual browsing, but hold off on important tasks like paying bills and purchasing items until you're on a private network.

3. Shred documents that contain personal information. It may seem old-fashioned, but this standard piece of advice still rings true. If thieves sort through your trash or recycling bin and find forms, bank statements, credit card bills, receipts or other documents that contain personal information, they could easily piece together enough data to create fraudulent accounts in your name. Buying and using a shredder to destroy confidential material is a quick and easy way to minimize this possibility.

4. Proactively guard key information. A huge part of protecting your identity comes down to you. While it's great to see the best in people, adopt a skeptical mindset when it comes to sharing your personal information. Question why someone is asking for it, and withhold as many details as you can. Did you know that providing your ZIP code, phone number or email address to retailers isn't typically mandatory? Merchants usually just use this information to create a profile of you. Financial institutions also seldom solicit sensitive information via email. If you receive a legitimate-looking email asking you to click on a mysterious link or requesting your Social Security number or password, call the official customer service number or go directly to the site, just to be safe.

Another way to protect yourself is to limit what you bring with you. While carrying around all of your credit cards and login information may feel easy and convenient, your life could easily turn into a nightmare if someone steals your wallet or purse and your identity disappears along with it. Do yourself a favor, and carry only what you need.

5. Check your credit and financial accounts regularly. While this technically won't help prevent identity theft, monitoring your credit report information, account balances and financial transactions regularly may be one of the best ways to quickly catch fraud and stop it before it gets out of control. There are many great services that can help you keep an eye on your finances for free; CreditKarma.com offers a free credit monitoring service that will notify you when something significant changes on your credit report. Mint.com allows you to easily see your financial accounts all in one place. And pulling and scrutinizing your credit reports from the three major credit bureaus each year from AnnualCreditReport.com is highly recommended to help you spot and dispute errors to keep your credit history accurate.

The Bottom Line: Your credit score is an extremely important factor that may affect whether you're approved for credit and how much you'll pay to borrow. Don't wait until identity theft happens to you -- by putting time and effort into protecting your information today, you may save a lot of hassles in the future.

Jenna Lee is the social media manager for Credit Karma, a free credit monitoring website that helps more than 22 million people access their credit score for free.


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3 Comments

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k4jlp

# 6
Force Congress to pass a law that says health insurance companies actually have to pay claims. They put a 3 grand deductable on my policy 1 year BEFORE Obama Care passed.
My premiums have also gone up the last 5 years. So what I have now is this:
The first 3 grand comes out of my pocket, THEN they pay 80%. Then it all starts over again at the start of a new year.

August 24 2014 at 2:53 PM Report abuse rate up rate down Reply
alfredschrader

Says on here Jell-O sales are sliding. Probably are but Gelatin sales are good.
That tiny box that makes 2 cups of product and contains two tablespoons of sugar, a dash of gelatin, and a pinch of color is not worth 79 cents.
People will buy a lot of things but they're not idiots.

August 23 2014 at 7:33 AM Report abuse rate up rate down Reply
alfredschrader

Your credit report is much more important than for borrowing. Many employers do credit checks on potential new hires. If your credit history is a train wreck, how could they trust you with their valuables and funds ? They wont hire you. Many insurance companies run routine credit checks on new customers. Not all but as a general rule people with lousy credit have lousy everything else in their lives including how they drive or how responsible they are.
Who wants to insure a guy who doesn't care what it costs to fix a wrecked car or even worse doesn't care about other people's cars.
Not all people with bad credit are risks, but for example, if you had two identical people applying for a job at your bank and one had good credit and the other had train wreck credit, which one would you hire ?

August 22 2014 at 12:15 PM Report abuse rate up rate down Reply