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What Can I do to Avoid or at Least Detect Financial Identity Crimes?

Financial identify fraud and financial identity theft are increasingly common crimes. A person can be a victim of these financial identity crimes without knowing about it for days, weeks or months. Once a victim of these crimes, it can be very costly and time consuming to get one’s credit and financial situation in the same position it was in prior to the crime.

One way to check and see if your identity or financial accounts have been stolen is to check your credit report. What many people are not aware of is that you can get a copy of your credit report for free once a year. If you want to obtain a copy of your credit report more often than that, you can for a fee. However, it is important to note that there are three companies that maintain credit information- Experian, Equifax and TransUnion. If you want to have a thorough picture of your credit situation, you need to see your credit report from each of the three companies. Why? Well, if someone steals your identity and orders a new credit card with it, that credit card company may check your credit through Experian. Therefore, if you only see your credit report from Equifax, you will not be aware of the fraudulent credit card on the Experian credit report. So, the best course of action is to stagger your order for one free credit report from each company every four months. If you want to order your credit report, go to www.annualcreditreport.com.

Unfortunately, ordering your credit report and seeing an unauthorized entry on there obviously will not prevent your identity or financial information from being stolen; it will just alert you to that fact and allow you to start the process of restoring your credit. One way to try and prevent financial identity fraud or theft is to place a fraud alert on your credit file, which is free. You only need to do this with one of the three credit bureaus as they will notify the others. This will alert the credit bureaus to contact you for verification if anyone applies for credit under your name. Fraud alerts need to be renewed every 90 days.

Another way to try to avoid becoming a victim of financial identity theft or fraud is to place a freeze on your credit file. This effectively freezes your credit file so that new credit accounts cannot be opened. It also prevents some people, such as landlords ad employers, from viewing your credit report. This must be done with each of the three credit bureaus. The problem with freezing your credit file is that you may want someone to have quick access to your credit file or you may need quick access to new credit which would not be possible until you lift the freeze on your credit file. It also costs a fee (often $10) each time you freeze your credit file and lift the freeze with each credit bureau.

Financial identify theft and financial identity fraud are very common crimes that can have lasting, cumbersome and expensive effects on people. It may not be possible to completely eliminate the risk of being a victim of financial identity crimes, but there are things that can be done to reduce the risk and become aware if you are a victim. At a minimum, checking your credit report on a regular basis is a good start.