Identity theft happens someone uses your name and Social Security number, without your permission.
There are many different instances of identity theft.
- Tax and wage related identity theft - Most common type and occurs when someone uses your personal information to file a fraudulent tax return in your name or when someone uses your identity to earn and collect wages.
- Financial identity theft - Using your information for financial gain. Opening credit cards in your name and gaining fraudulent access to your bank account.
- Medical identity theft - using your identity for fraudulent doctor visits.
- Child identity theft - This is easy because children have clean credit files and most parents do not check their children’s credit. Most times, relatives are the thieves.
- Driver’s license identity theft - This occurs when a thief uses your driver’s license number instead of his/her own. Car accidents, speeding tickets, or wrecking a car are some examples that you could face being liable for if your driver’s license information is taken.
- Criminal identity theft - A thief could use your information in a more serious crime.
Credit score is primarily what lenders look at when evaluating your application for credit. Identity theft can affect your score. Credit scores are based on a few factors including payment history, how much available credit you are using, the age of your credit accounts, the types of credit you are using and how often you apply for new credit. Your score can lower if a thief is opening new accounts in your name. However, the quicker you catch fraudulent activity, the quicker you can clean up your credit.
If your identity is stolen, act quickly to minimize your damages. Here are some steps to safeguard yourself.
- Put a fraud alert on your credit reports - This notifies lenders and creditors to take extra steps to verify your identity before extending credit. When you place a fraud alert, you are entitled to a free copy of your credit report from each of the three agencies (Equifax, Experian and TransUnion). Another more effective option is to place a security freeze on each of your credit reports. This prevents new creditors from accessing your credit report(s) at all. If you have a security freeze, there are extra steps to take if you are applying for new credit. You need to contact each credit reporting agency individually to place a freeze on your reports.
- Contact any institution directly affected - If any of your credit cards or bank information was stolen, report the theft to your credit card companies and bank.
- File a police report - Contact your local law enforcement office and report the theft. Get a copy of the report and/or the report number.
- Protect your Social Security number - If it was or may have been compromised, contact the Social Security Administration and the Internal Revenue Service.
- Contact the Post Office - If you have reason to believe the thief may have submitted a fraudulent change of address to the post office or used the U.S. mail to commit fraud against you.
There are more steps to complete if your identity has been stolen but this list helps to start the process of clearing your name.
If you think that you are at risk of having your identity stolen, then be proactive. Do not carry your Social Security card in your wallet. Be very cautious about who has your Social Security number. If you are not applying for credit, keep it private. Never give out your SSN over the phone (unless you are certain about the caller’s identity) or via email. Avoid phishing emails. Always verify the source of the emails, and double check the URL on any website before logging in or entering personal details. Do not log into bank accounts or use your credit card online, if you are using public Wi-Fi. Use complex, unique passwords and change them regularly. The passwords you create should include letters, numbers and symbols.
Being a victim of identity theft is not fun. However, the more proactive you are, the better equipped you are to prevent it from happening to you.