How Credit Monitoring Protects Your Financial Assets

With identity theft in the news every day, so many people are rightfully wondering how they can protect themselves. It's actually pretty simple. Credit monitoring can make all the difference, because it's one of the few ways to tell if you’ve become a target of this criminal activity. Otherwise, you’ll have no way of knowing, other than being surprised by a mysterious reductions in your account balances and credit score.

Why you should monitor your credit

The Federal Reserve Bank of Boston reports that 80% of identity theft victims never knew how the thieves got their information. Credit monitoring won’t necessarily stop the crime from happening, but at least the information from the credit reporting agency can alert you to any suspicious activities so you can take corrective action.

Be wary of inquiries from your own bank and even your credit reporting agency!

Among the many methods for acquiring your personal information, thieves can steal mail that contains your account numbers and other vital data. They can also cleverly copy essential information from your computer using virus-driven programs designed for that very purpose. Perhaps their most insidious method is to “spoof”, or imitate your own bank, credit reporting agency or some other official business entity that you would otherwise trust, like eBay or PayPal. Using the phone, e-mail, or regular mail, they can pretend to be performing some routine function, and ask you to supposedly verify your identity by having you provide your name, address, phone number, account number, PIN, or some combination of these items. In most cases, legitimate businesses will not ask for this type of information, so DO NOT respond to the inquiry.

You have to stay on your toes because identity theft isn’t always such a sophisticated scheme. Many victims are shocked to learn that the perpetrator was someone they knew, and who simply had access to their information. It could be:

• A roommate
• A landlord or building manager
• The cleaning service
• Your bookkeeper
• Anyone hired to work near your records

Sadly, it could even be a beloved family member, which is more common than you might think.

Monitor your credit reports to stay ahead

As with many other aspects of life, sometimes the best solution is to seek expert help. In most cases, a professional credit monitoring service will continually keep an eye on your credit history through the principal credit reporting agencies and report any notable events. The alternative is to monitor the agency reports yourself, but if you follow the experts’ advice and only check it once a year, that leaves plenty of time in between checks for the thieves to do their damage. A service that acts as a credit monitor receives reports from the credit reporting agencies on a regular basis, and in turn alerts you (usually via e-mail) of any significant changes in your profile. If such a change were caused by the unauthorized action of an identity thief, you’d have a chance to react before the damage became too great.

Since their inception, credit monitors have foiled a lot of identity thieves before they could do any real harm. In the long run, they really are worth the price of the small subscription required for their use. The amount you might pay them would certainly be far less than the losses you could face without their continual monitoring of your credit records. Compared with stealing your money and ruining your credit and possibly your financial future, subscribing to such a service is a simple low-cost solution.

Credit card photo courtesy of Lotus Head

• Call local law enforcement Call the police as soon as you discover any form of credit theft. If it happened while you were out of town, call the police in that location. Make sure to write down the number of the police report and the official contact person within the police department. You'll need that information as you speak to various entities while trying to clear up your credit.
  

• Call the credit card company Most creditors have a dedicated phone number to report stolen credit cards. When you call this number, your card(s) will be canceled immediately. Make sure to request that the accounts have “closed at customer request” indicated on the records. When you get new credit cards, protect them with all new passwords that are hard to guess. Mixing random numbers and capital letters in with the password will help make them harder to guess.
  

• Call the three credit reporting agencies It's critical that you call the three major credit bureaus as soon as you know there's been a theft. This will help you prevent damage to your credit score. It's also important to have the agencies flag your accounts immediately with what is called a “fraud alert.” This will place a hold on your accounts and cause an extra level of scrutiny if someone tries to open new accounts in your name.

Here are the contact numbers for the three major credit reporting agencies:

Experian: (888) 397-3742
Equifax: (800) 525-6285
TransUnion: (800) 680-7289

• Put all your notes in folder Document the details of all conversations about your stolen identity. Write down the names and phone numbers of the businesses, the dates and times of your calls and the names and titles of anyone who helps you. Also, keep copies of your written correspondence, whether in print or e-mail form, along with postal receipts.

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