Reaping the rewards of fiscal responsibility takes discipline and a clear understanding of your financial goals. But even the most dedicated efforts can be derailed through no fault of your own. 

Falling victim to an identity thief can result in unexpected challenges when the time comes to finance the purchase of a vehicle, open a new bank account or apply for a mortgage. Extreme cases can even lead to the loss of substantial amounts of money or ownership of property. Fortunately, one of the simplest ways to minimize the consequences of identity theft is a proactive approach. 

Types of Identity Theft

When most people think of identity theft, it’s the common financial offenses that come to mind. However, stolen or fraudulent credit cards, unapproved access to bank accounts, and illicitly-approved loans are just one way that this crime can impact you. 

Among the most common ways that a person’s identity is hijacked is through a stolen driver’s license. In addition to sometimes being the first step to financial crimes thanks to the personal information it provides, an individual using your license can result in unwarranted traffic violations on your record and increase your insurance rates.  

Your medical insurance can be another prime target for identity thieves. Fraudulent claims using your medicare or other providers can be difficult to spot and hard to sort out after the fact. More recently, there has been a focus on stealing children’s personal information since it is less likely to be noticed until they are older. Acquiring your social security number or tax ID numbers can also lead to an attempt to file a tax return without your knowledge. 

Prevention Steps

With so many ways that your information can be compromised, you must take steps to protect your personal data. 

  • Don’t make a habit of keeping your social security card in your wallet or purse, and only carry the credit or debit cards you plan to use. 
  • Shred paperwork that contains account numbers or other sensitive information before disposing of it. 
  • Check your mailbox each day and suspend service if you plan to be out of town to discourage mail theft. 
  • Ignore unsolicited requests for personal information via phone, email or otherwise, even when it appears to come from a business you recognize. Contact their customer service department if you have questions about the legitimacy of any attempt to communicate. 
  • Rely on complex passwords for your online accounts rather than obvious or easy-to-guess subjects, such as the names of loved ones or meaningful dates. 
  • Place a fraud alert on your credit report with one or more credit bureau to create an additional layer of protection before a new account can be opened. 

Monitor and React

Despite your best efforts, your information may still fall into the wrong hands thanks to a single mistake or the hacking of a third party that you trusted to keep your data private. That’s why it’s essential to monitor your credit report and financial statements for signs of fraud. 

If you see an account you don’t recognize, transactions you didn’t make or receive a notice that seems suspicious, react immediately. You must contact the appropriate organization to notify them of the error and prevent it from getting worse. In an upcoming article, we’ll cover how to make sure you’re doing everything possible to recover from identity theft and return your credit status to the level it deserves.

Open Mortgage is the lending partner that cares about your financial goals as much as you do. Visit OpenMortgage.com for the advice and resources that can prepare you for your next mortgage keep your financial future on track.

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