How to reduce the risk of identity theft

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• Identity theft is often a crime of opportunity, so reducing risk goes a long way to protect against identity theft.
• Protect your identity by securing personal information and keeping complex, unique passwords.
• Identity theft services and credit monitoring services can automate these for you and give you peace of mind.

The consequences of identity theft can be steep. There are various forms of this illegal activity and can be used to open credit cards, buy cars, or steal your tax refund. 

Identity theft is often a crime of opportunity in that you may be a victim because your information was an easy target. On the flip side, closing those vulnerabilities will mean that an identity thief is more likely to move to the next guy with more gaps in their cybersecurity. These steps to protect your identity will go a long way in preventing any incidents.

How to reduce the risk of identity theft

Eva Velasquez, president of the Identity Theft Resource Center, says it’s best to take multiple steps to secure your identity. However, your identity will never be completely theft-proof. There’s still a possibility that a hacker sneaks through layers of protection.

“There’s no guarantee to prevent identity theft from happening. What you can do is engage in practices that significantly reduce your risk, but you can do everything right and still become a victim,” says Velasquez.

1. Monitor your credit

Credit monitoring is the process of checking your credit report to ensure that it is free of errors and suspicious activities. You can employ credit monitoring services to do this automatically, notifying you of any changes to your credit report. Many of the best identity theft protection services include some credit monitoring capabilities.

Of course, you can manually monitor your credit by regularly reviewing your credit reports. You can request to view your credit report from the three major credit bureaus for free through AnnualCreditReport.com. Until the end of 2023, you can request these reports each week as a result of the pandemic. However, you’re normally only able to see these free credit reports once per year. 

While this doesn’t necessarily prevent identity theft, it does mitigate any potential damages as a result of identity theft. With regular monitoring, you’ll catch any suspicious activity early.

2. Keep your personal information secured   

Another way to prevent identity theft is to keep your personally identifiable information, also called PII, from prying eyes. Fraudsters can’t impersonate you if they don’t have any information on you.

Velasquez adds you should have all personal information, whether physical or digital, in a place that you have exclusive access to so “you’re not leaving your personally identifiable information out and easily accessible for anyone coming into your house,” Velasquez says. This can include your social security card, financial documents, and medical records.

In addition to properly storing personal documents, you should properly dispose of personal documents. Any physical documentation that isn’t important or outdated with your personal information must be shredded immediately before throwing it in the trash. Leaving those documents intact creates an opportunity for identity thieves to recover these documents and use them against you, Velasquez says.

3. Maintain good password etiquette   

There are so many online accounts to keep up with nowadays, from personal to professional. It’s tempting to use the same password repeatedly or use personal names or birth dates but think of it like an apartment building where all the units use the same lock. Someone with a working key could open every single apartment.

This kind of attack, called a credential stuffing attack, is common. Hackers find a pairing of login credentials in a data leak or off the dark web and plug it into various sites to see if it works. 

Similarly, easily guessed passwords can also lead to a breach in your cybersecurity. Passwords with a complex string of numbers and symbols with varying letter cases will be harder to crack. Hints or recovery questions should also be difficult to answer by anyone but you.

A password manager or a simple physical list of usernames and passwords (provided you’re following step 2) can serve as reasonable solutions to multiple passwords. Multi-factor authentication can add another layer of protection to your online accounts.

4. Freeze your credit

A credit freeze is a service offered by the three major credit bureaus — Experian, Equifax, TransUnion — that seals your credit reports from third parties. This means that lenders, for example, can’t pull a hard inquiry when extending a line of credit. With your credit reports frozen, “even if a thief has all of the data needed to open new financial accounts in your name, they still won’t be able to do it because the issuers of credit can’t get access to your report,” Velasquez says.

Equifax credit freeze: Freeze your credit with Equifax on its website, or over an automated phone line at 800-685-1111, (800-349-9960 for New York residents). If you’d rather talk to a human, its customer care number is 888-298-0045. You can also freeze your credit through the mail by submitting its Fraud Request Alert Form.

Experian credit freeze: Freeze your Experian credit report using Experian’s online Freeze Center. You can also call 888-EXPERIAN (888-397-3742). Experian does not have a request form, but you can mail a written request to Experian Security Freeze, P.O. Box 9554, Allen, Texas 75013.

TransUnion credit freeze: You can request a TransUnion credit freeze through its online portal. You can also add a freeze by calling 888-909-8872. You can also print, complete, and submit TransUnion’s Security Freeze Request Form. 

5. Watch what you post or click online  

Cybercriminals often use phishing attacks to trick victims into certain actions, including sending personal information or clicking on links containing viruses. If family, friends, or even people who you haven’t talked to in a few years message you asking for money or information, use an alternative method to confirm their identity, such as calling them.

Posting personal information on social media can also make you an easy target for identity theft. Through social media and online platforms we’ve created a roadmap for criminals to hack our brains so be wary of who you speak to online, Velasquez says. “People give the same level of weight to an online interaction as they do face-to-face interactions, and you really don’t know who you are talking to,” she says.

Reducing identity theft risk frequently asked questions (FAQ)

How do I place a fraud alert and should I?

A fraud alert is another good measure to prevent people from using your information to open a new line of credit. When you place a fraud alert on your credit report, that encourages lenders to verify your identity before extending a line of credit based on your credit report.

Unless you’ve been the victim of identity theft already, fraud alerts last one year before you have to renew them. However, you only need to call one of the three major credit bureaus. 

What do I do if I’m the victim of identity theft?

If you don’t recognize a line of credit on your credit report, there are several steps you can take. Be sure to do this as quickly as possible, as many of these steps are time-sensitive. 

Report the fraud to involved companies: You should first notify the companies involved in the identity theft. For example, if someone opens a Discover card in your name, you should go to Discover and tell them that the credit line is fraudulent. As long as you do that within the allotted time since the fraud occurred, usually 60 to 90 days, you won’t be held financially responsible for anything. 

Create an identity theft report: You should also report the incident to IdentityTheft.gov. Once you complete this process, you will be given an identity theft report, which you need if you want to place an extended fraud alert on your credit report, which lasts for seven months. You can report identity theft over the phone; however, you will not receive an identity theft report.

Report fraud to credit bureaus: You should also notify one of the three major credit bureaus. You only need to report to one credit bureau, as that bureau is required by law to inform the other two bureaus.