Picture this: you are diligently working on your finances, building wealth, establishing good credit, and doing all the right things — and then all of a sudden you become a victim of identity theft.
Overnight, you can be losing money and dealing with major headaches trying to quickly catch the fraudulent activity and can spend countless hours closing accounts or blocking accounts from being opened.If you aren’t actively following identity theft prevention tips and taking precautions, your finances and credit can be flipped upside down in a matter of minutes.
And it happens more often than you may realize, especially as more of our financial lives and information is online.
But don’t worry, with the tips below you can be protected in advance and slow down identity thieves before it becomes a big mess.
A Few Identity Theft Statistics
If you are fairly active online and maybe have an online only bank, you’ll be aware that hacking and identity theft is a real threat you face everyday.
Between using computers, our phones, and our personal information being leaked from credit companies, banks — it’s unfortunately way too common.
And once your information is out there on the “dark web,” there is not much you can do other than be diligent with your information.
This is not necessarily being written to cause you to panic, but it’s a serious problem that can cause you financial stress and concern. And to understand how rampant this problem is, take a quick look at a few identity theft statistics below.
- Cybercriminals continued hitting consumers hard in 2019, resulting in $3.5 billion in losses related to fraud recovery.
- 40% of takeovers happen within 24 hours of a criminal’s access to a victim’s account.
- 10% of Americans have been a victim of identity fraud, 21% of whom have been victimized more than once. Those numbers indicate that if you live in the US, you have likely been a victim of ID theft or known someone who has (whether they’ve admitted to it or not).
- According to the Identity Theft Resource Center, 1.3 million children’s records are stolen every year.
Let’s get into the identity theft prevention tips that will be useful for you to do immediately.
Identity Theft Prevention Tips
87% of consumers have left their personal information exposed while accessing emails, bank accounts or financial information.
As you can see by some of the statistics, identity theft is a huge problem and has only grown with technology.
Now does this mean you need to go completely off the grid? Well certainly it can be a lifestyle choice, but it’s more about being smart with what you do online and utilizing various tips to protect yourself from identity theft.
Below are some ways to prevent identity theft online and also quickly catch or stop if your information gets compromised.
1. Monitor Your Credit Diligently
One of the first identity theft prevention tips to start with is monitoring your credit. Before, you could request a copy of your credit for free once a year or pay for new reports.
However, thanks to Credit Karma, you can monitor your info for free and check in as much as you want.
Setting this up allows you to get real-time alerts, so if anyone applied for anything where a credit check was done you are instantly noticed. This lets you catch things immediately so you can take action on anything that was not done by you.
But Credit Karma also will show you things like your credit score, credit history, provide recommendations, and more.
It’s also important to note the scoring model Credit Karma uses, which you can learn more about over on Investopedia if you are interested.
2. Review Your Financial Accounts Often
While most people do this, sometimes it’s easy to not monitor or check financial statements for a bit. But that’s an easy way to miss issues, strange activity, or not realize your accounts have been taken over.
Review your bank statements often, check in and see the latest activity, and look for any weird payments or money transfers. Since credit card hacking is one of the top issues, definitely look at your credit card statements.
But it doesn’t stop there, if you have an investment account then you want to set up alerts and monitor this activity as well.
Typically, you’ll be putting quite a bit of money away in a 401k, IRA, or some variation and if this were to get compromised your future nest egg could be wiped clean.
3. Add Fraud Alerts or Freeze Your Credit
One of the smartest things I did in 2018 was put fraud alerts on my credit reports.
What’s great is this alert is good for up to one year and when you apply it to say Experian, they alert TransUnion and Equifax which also then has alerts in place.
The goal of this is that if someone were to apply for something where your credit is checked, that company is supposed to call and verify that it is legit before approving the application.
Now does every company follow that protocol? Well probably not, but this is a nice way to help safeguard your credit.
If you want to be even more protected or you already were a victim of identity theft, I’d highly recommend freezing your credit with three credit bureaus.
You Can Freeze Your Credit Here:
It’s completely free to do and only takes a few minutes of your time. The only challenge is you’ll have a unique pin for each (except Equifax) and when you go to apply for anything that checks your credit, you’ll need to remember to unfreeze your accounts first.
But this completely blocks any application that is fraudulent from being approved.
4. Use Identity Theft Software
If you are looking for more protection and insights into your information, paying for identity theft software might be a great idea.
Most offer various services like personal info monitoring, dark web monitoring, social media monitoring, protecting children’s information, to even helping your recover any financial damages.
Some of the best platforms in this space to consider using include:
| Identity Theft Software | Product Highlight | Get Started |
|---|---|---|
| Antivirus Features | Get Started Today |
| Credit Simulator | Get Started Today |
| $1,000,000 Coverage | Get Started Today |
 | Assisted with A.I. | Get Started Today |
There is no completely full-proof way to prevent identity theft completely.
Even if you were off the grid, your social security and info is most likely in the hands of the credit bureaus. And if they get hacked liked Equifax did not long ago, your info is out there for someone to use.
And while identity theft software won’t completely stop it, you now have additional protection which can give you detailed information and help you recover any major damages.
If you want to learn more about some of the platforms above, I dive into best identity theft software further.
5. Add Additional Login Credentials
Many times, the way thieves get your info or into your accounts is due to weak login protections. Since everything is going digital, this can cause your information to be phished or scammed.
There are a few things you can do that are quite common.
Two-Step Verification
First, you can add two-step verification to your accounts. This means besides entering your password on financial accounts, you’ll be sent a random verification number to your phone or email that you have to enter next.
While this can be a great feature, if your phone is also hijacked then the scammers and thieves can still get into your accounts. Typically this is called “sim jacking,” which is why I recommend using a pin code on your sim card too.
Unique Pin Code
Another option is on your account to add a unique pin code too. Not every account you have may offer this, but if they do then take advantage of this.
Yes, it sucks to have to remember passwords and now pins, but you’ll be glad you did it if your info was ever compromised.
For example, your cell phone plan can add a pin code to your account, which is required if anyone tries to make changes.
Recognized Device
The other thing you can also do, many financial accounts offer this is to use the “remember this device.” While I wouldn’t use it on a phone (in case your phone is ever stolen or hacked), it could be good for your home computer.
This limits which devices can login to your accounts, so if someone uses a different computer they are automatically blocked from access.
6. Avoid Public WiFi Without Using A VPN
Another identity theft prevention tip that many overlook is using public WiFi carelessly.
Hey, who doesn’t love access to free internet right?
Whether you are at a coffee shop, the airport, a hotel, etc. — public WiFi can leave you open to being hacked and people accessing your financial accounts.
I personally never login to banks, investment accounts, or other important sites with my information on public WiFi without the use of a VPN platform.
What VPNs do is re-route the IP address and then your online activity is encrypted, so you cannot be tracked. I also use this for my home internet as well, more of a precaution and it’s also a privacy concern in my opinion.
Two of my favorite VPN’s include ExpressVPN and NordVPN. I’d highly look into these if you tend to access public WiFi often or are concerned about your personal privacy.
7. Update Passwords On a Regular Cadence
One of the obvious identity theft prevention tips on this list is about having good passwords on your financial accounts and other personal information.
But not only is having a strong password important, but you should be updating them on some regular cadence.
I know, it can be a pain to not only remember all these passwords but then continually update them and remember the new ones. But this inconvenience can keep scammers and hackers out of your accounts.
Depending on how you feel, how often you update your passwords is up to you. I like to do this four times per year, or every quarter. However, you can do it every month or maybe every six months — whatever you’d like to do.
8. Avoid Clicking Odd Links In Texts or Emails
Often your financial accounts may send you information via email or text. However, it’s important you know the kind of emails and ways they will get in contact with you first.
The reason for this is many scammers or hackers will use a “phishing” technique where they create emails or texts that look incredibly legit with links that when clicked could install malware, capture account info, or even have a landing page that looks like the real one and you end up entering your personal info.
For example, there are some Venmo scams that include link phishing, where everything looks legit but it’s not. Pretty insane right?
I personally never click links in text, even on the legit ones and I tend to opt out of those communications.
With email, a great way to tell if something is real is to look at the “from address” you can usually spot that it’s fake immediately. If you are still unsure, do not click anything and reach out to the company to ask if it is legit or not.
9. Be Smart About Your Social Security Number
Unfortunately, your social security number is used for quite a bit and there are plenty of financial institutions that have your info on file.
The problem is, you can’t control what they exactly do with your info and if they end up getting hacked.
Case in point, the consumer credit reporting agency Equifax. I mentioned and linked about when they were hacked not too long ago and many people’s information and social security info was leaked.
And this was completely out of people’s control! Hopefully, these financial companies are held to higher security standards in the future, but I wouldn’t hold your breath.
The best you can do is to ensure your social security card is safe or locked away, refrain from saying it over the phone, sharing via email, or writing it down and forgetting it somewhere.
Most legit needs of your social security number will only require the last four digits, so if there is a request for the whole number you should be skeptical.
Final Thoughts
The above identity theft prevention tips will ensure you are protected and a step ahead of potential thieves.
Unfortunately, there is no full-proof method to preventing it from happening, but you don’t have to let it destroy your finances, credit, and personal info if you take the above precautions.
Are you safeguarding your finances, credit, and personal information to the best of your ability? Have you been a victim of identity theft? Do you have other prevention tips? Let me know in the comments below!