Unfortunately, identity theft is often treated more like a natural disaster that cannot be prevented, than it is as a criminal act perpetrated by an individual; it is all about preparing for the inevitable and the cleanup that takes place after it happens. The villain is often times identified as the organization that allowed such an event to happen, sort of like blaming the weatherman for bad weather. As such, organizations are required to equip you with the tools necessary to clean up and defend your identity rather than help you find the individual that is attacking you.
But when you get right down to it, you are the only one that can protect your own information. And simply balancing your checkbook once a month is not enough to ensure that your financial identity is secure. It all begins with understanding how consumer reporting agencies financial institutions and creditors see you as a consumer. You need to take the time necessary to make sure that they all know you as the consumer you think you are.
Keeping track of your various credit reports
Close accounts and update information – Staying on top of your current financial status is important. Especially when it comes time for you to track down and prove that the accounts you know you have are the only accounts that should currently be listed as active. This will make tracking down fraudulent activity a much easier task.
Old addresses, unused credit card accounts, paid off loans and closed bank accounts can remain on your credit history for years. The big three credit reporting agencies that you will want to keep as up to date as possible are Experian, Equifax and TransUnion. Through each you can request a credit report to review and even dispute reported items that you feel are out of date, inaccurate, or possibly fraudulent. You will then need to follow-up with individual companies you once did business with to ensure that they each are accurately reporting your past accounts as being paid in full.
However, there is a limit to how many free copies of your credit report you can request each year. This will depend on how many legitimate disputes you have with each credit reporting agency. With each dispute, you can potentially get an updated report to prove that what you disputed has been set to rights. Each of the three services mentioned above that can help you clean up your credit report also have monthly subscription services. These services, which can cost anywhere from $15 to $30 monthly, allow you to access reported activity on an ongoing basis. Experian (Free Universal), Equifax (Free Universal) TransUnion (Free iPhone) each have mobile apps that when used in conjunction with their premium services, can be used to alert you when new accounts are created using your financial information. After you have all of your information in order, keeping it in order is a whole lot easier when using such a service.
Keep track of your existing accounts and balances
Tracking account balances – Another aspect of your financial identity comes in the form of maintaining the open accounts you do have. It can become a challenge to stay on top of all of your various checking, investment, and credit accounts on a day-to-day basis. That is where apps like iBank ($9.99 iPhone, $19.99 iPad) and Intuit’s Mint (Free Universal) can help. With each service you will be able to store the credentials necessary to access each of your accounts online. Once this is done, you can use their respective apps to log on to all of your accounts at the same time and get a report of what each accounts balance is. Noticing that your cash accounts are not as high as you thought they should be, or that your credit balances are not as low as you thought they should be, can help identify when someone has gained access to one of your accounts.
Direct account access and alerts – There are times when what you need is access to your account directly through the managing institution. Most financial institutions, banks and credit card companies now have their own mobile apps that allow you to access your accounts directly. These apps can be used for more than just paying your bills and depositing photos of your checks. The benefit to using such an app directly is that you can usually set up notifications with many of these apps that can assist you when it comes to monitoring your accounts. Discover is one such app (Free Universal) that you can use to set up alerts whenever there is a cash advance, a transaction occurs outside the U.S., there is a purchase in excess of an amount you set, or any time that Discover notices an activity on your account that is unusual.
Secure access with strong passwords
Choosing Strong Passwords – As you start to monitor your credit reports and financial accounts more frequently, it is equally as important to tend to your password “garden” as well. It is always a good practice to use what is known as a strong password with each of your online accounts, and especially where your finances are concerned, choosing a different, strong password with each account is essential. The Wolfram Password Generator ($0.99 Universal) is a good first place to start when it comes to evaluating how strong your chosen password actually is. With it you can measure exactly how strong each of your passwords are. The strength of a password is generally measured by how long if would take for a computer to enumerate through enough passwords in an effort to “guess” what your password is. Even the strongest of passwords are no good if someone knows what your password is.
Managing and Changing Passwords – Preventing others from accessing all of your passwords in as secure a manner as possible is the primary function of password managers. They work by keeping all of your passwords secure behind one master password. While keychain managers like iOS 8’s keychain can certainly remember your passwords, managing them is another matter entirely. Your collection of passwords should be though of more like a garden that needs to be tended to from time to time rather than just a collection of assets you need to lock away for long periods of time.
The Department of Defense recommends that passwords never be used for longer then one year, a frequency that universities like MIT also endorse. Password management apps like LastPass (Free Universal) can perform an audit of all of your passwords to see how often you repeat the same password and even test the strength of all of your existing passwords. LastPass even has the ability to auto-update your passwords for you. This can certainly save time, and ensure that you the weeds out of your passwords.