Top Credit Habits to Adopt in Your 20s: Helping to Protect Your Credit From Identity Theft
Having your identity stolen can be financially devastating, and a record 15.4 million Americans were victims of identity theft in 2016. Learning how to take steps to help protect your credit can help you avoid being blindsided.
Earn big‑time cash back that never expires.
If you’ve followed along with this series on credit habits to adopt in your 20s, you’ve also read Organize Your Financial Life, Build Your Budget and Track Expenses, Get to Know Your Credit Report, and Be Selective About Credit Card Choices. Wrapping up this series on the top credit habits to adopt in your 20s is a primer on how to help protect your credit information.
Help Protect Your Credit: Know the Signs of Identity Theft
Safeguarding your personal information begins with knowing how identity thieves get access to your personal details. As just a few examples, an identity thief can:
- Steal your purse or wallet
- Access your information using stolen bills, financial documents or receipts
- Solicit your information via phone or email scams
- Use hacking software to steal your information over an unsecured wireless network
If an identity thief is able to get your name, Social Security number, birth date or other personal information through any of these methods, they could potentially use it to try and apply for a credit card (or other financial account) in your name.
You may not realize your credit has been compromised until you start getting collection calls for a credit card balance that someone else has run up in your name. By that point, the damage to your credit score has already been done.
Other signs that could indicate a stolen identity include:
- There are bank account transactions or credit card purchases you don’t recognize
- New credit inquiries or accounts you don’t remember opening show up on your credit report
- Some of your mail goes missing or you’re getting mail from billing agencies you don’t recognize
- You’re denied for credit, even though you believe you have a good credit score
How to Help Protect Your Credit
Figuring out how to help protect your credit isn’t rocket science. It really comes down to how you manage your personal information. With that in mind, here are some tips for helping to keep your credit safe:
1. Protect Your Information Physically
First things first — make sure your financial documents aren’t accessible to identity thieves. Keep your Social Security card and your birth certificate stashed away where no one can get to them. Opt for paperless statements from your bank, credit card company or anyone you pay bills to. If you can’t go paperless, consider regularly using a shredder, so you’re not leaving a paper trail that an identity thief could use to wreck your credit.
2. Go Low-Key When You’re Online
Social media is commonplace for 20-somethings, but when it comes to sharing, it’s possible to have too much of a good thing. Posting things like your mother’s maiden name or the name of your first pet on Facebook may seem harmless, but identity thieves are on the lookout for those kinds of details. It goes without saying that you shouldn’t be broadcasting things like your Social Security number on social media either.
3. Protect Your Devices
Nearly 70% of Millennials rely on mobile banking to manage their dollars and cents, and 42% of Millennials use their smartphones to comparison shop and 24% are making purchases from their mobile device. If you rely on your phone or tablet to check your bank account balance, pay bills or shop, take care to use secure connections when getting online. Steer clear of using public Wi-Fi and lock your devices with a unique password. If you’re using a laptop, make sure your malware and antivirus protection are up-to-date.
Earn big‑time cash back that never expires with Discover it®.
4. Set up Account Alerts
Setting up account alerts is a relatively easy way to detect identity theft. For example, you can set up an alert with your credit card company or bank to notify you when a transaction posts that’s over a certain dollar amount. If someone steals your credit card number and uses it to make a purchase, getting an alert can help you stop them in their tracks sooner rather than later.
5. Keep an Eye on Your Credit Report
Your credit report includes a list of your various credit accounts. If you’re checking your credit report on a regular basis, it should be obvious if there’s a new account or inquiry for credit showing up that you don’t remember applying for. In terms of how often you should be checking your credit report, it’s good idea to pull your credit reports from all three credit bureaus at least once a year; check out the free resource AnnualCreditReport.com.