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Protect Your Credit

by John Katalinich

Your credit rating is one of the most important assets you possess. And in these times of increased identity theft, you must go to great lengths to protect it. Having good credit can be the difference between having financial freedom and not. It can be the difference between opportunity offered and opportunity denied. In all other systems in this country, you are innocent until proven guilty. Not so with your credit. A creditor needs only to report that your payment is delinquent and it goes on your credit report. Unfortunately, It is your responsibility to prove conclusively that your payment was, in fact, not late. If you have no proof, you cannot change what your creditor reported.

This fact is especially frightening if someone steals your identity, because even if you are innocent, it will cost you time and money to straighten everything out. Your creditors cannot be held liable as there is no way they could have known you were a victim of fraud. If, in the unlikely event you can find and identify your identity thief, chances are slim you will be able to recover costs from him/her for your efforts to clear your name. In other words, because of the high cost of correcting any problems after identify theft has occurred, it is worth the effort to take precautions to help avoid it in the future.

An important weapon in this war against identity theft is a personal shredder. Shredders can cost only about $25, but can save you thousands of dollars in legal fees and other expenses. Buy one. Use it religiously. It is the cheapest and easiest way to protect your privacy. Shred any paperwork containing personal information before you throw something away. Dumpster-diving, the practice of looking through trash for personal information, is the most common method that identity thieves use to get personal information. Therefore, shred:

  • All of those credit card applications you get in the mail
  • Any credit card receipts
  • Pay stubs
  • Bank statements, deposit receipts
  • Utility bill stubs
  • Old tax returns
  • Anything containing your SSN number

 

Additionally, you should obtain a copy of your credit report at least once each year. Copies of credit reports should be free. Several credit bureaus even offer services you can pay for to watch your credit report. If major changes occur within your credit report you will be notified. The cost for this service can range from $60 to $125 per year. Oftentimes this is money well spent as an early detection of fraud.

Also, t ake your name off of mailing lists. The fewer credit applications and "preapproved" offers mailed to you the safer your credit will be. Some identity thieves don't wait for those applications to get into the trash. They steal them right out of your mailbox so make sure you check your mailbox daily.

Just when you thought it was safe to go back into your Inbox, there's a new form of identity theft called phishing.What is phishing? Phishing is a type of deception designed to steal your identity. In phishing scams, thieves try to get you to disclose valuable personal data by holding themselves out as an employee of your financial institution, a government agency, a credit reporting agency, etc. Phishing schemes can be carried out in person or over the phone, and are delivered online through spam e-mail or pop-up windows. Phishing schemes can use a website that looks nearly identical to that of your financial institutions to collect data. If someone should ever call you unsolicited claiming to be from your financial institution and ask for your credit card number, social security number, pin number, or any other password you should be leery. Your financial institution should already have all of this information and will not request it from you.

Secure your important paperwork. Buy a file cabinet and lock it or rent a safety deposit box. Paperwork to be kept secure includes:

  • Any credit card receipts
  • Pay stubs or W-2 statements
  • Bank statements, deposit receipts
  • Utility bill stubs
  • Old tax returns
  • Anything containing your SSN number

 

Identity thieves are getting more creative and more motivated. Because consumers bear almost all of the risk, it is important to take steps to protect your credit before it gets damaged. Shred what you don’t need and keep all other sensitive financial information secure. Review your credit report regularly and use common sense.

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