3 Free Things You Should Do to Protect Your Identity

Having your identity stolen can turn your financial life upside down in an instant and take years to undo. By applying these three strategies, you’ll help keep yourself from falling victim.

Written by Caish Echols AFC®, CFP® / June 7, 2022

Quick Bites

  • Your social security card should never be in your wallet.
  • Protect sensitive information—like your social security number, account numbers, addresses, birthdays, etc.—by shredding your mail with a diamond-cut shredder.
  • Use a password manager and don’t reuse passwords.
  • Freeze your credit as well as your minor children’s credit at all three credit bureaus.

One of the most iconic scenes from The Office is when Jim comes to work impersonating Dwight. I laugh every time I see it. “Identity theft is not a joke! Millions of families suffer every year.”[2]

Laughs aside, though, Dwight was right. According to statistics from the Federal Trade Commission, over 1.4 million Americans had their identities stolen in 2021.[1] Isn’t that scary?

Because we live in a digital age, now more than ever, it’s easy for others to gain access to your personal information and use it to pretend to be you. This can take many forms. Most commonly, it looks like credit card fraud, or people opening new accounts or loans in your name. Sadly, these things can quickly destroy a person’s credit and then take years to repair.

If you want to protect yourself, these three steps are the best way to start!

1. Protect your Social Security number and other sensitive information

Your Social Security number is one of the most crucial numbers in your life. It basically makes you “you” to the government. If you want to open a new account, receive retirement benefits when you’re older, file your taxes, etc., this is the only way the government can verify you are who you say you are.

If someone gains access to this number, they can more easily create a new identity—using other pieces of your information to match it. Because of that, it’s important to keep your social security number and other identifying information secure. Here are a few ways you can make sure you protect yourself:

  • Never carry your Social Security card in your wallet. Ever. Keep this in a secure place in your home.

  • Be extremely cautious whom you give your Social Security number to. If someone calls you and asks for your SSN, chances are it’s a scam. If you’re unsure whether the request is legit or not, hang up, find the phone number for the organization requesting the information, then call back and inquire whether it was an actual request from them. Most of the time, it’s not.

  • Use a diamond-cut shredder to dispose of all documents that have identifying information on them (things like bills, tax notices, bank information, etc.)

If you’re in a situation where you feel uneasy about someone requesting your SSN or you’re unsure whether or not you should shred a piece of mail, always err on the side of caution.

2. Utilize a secure password manager

Most people have heard the rule “don’t reuse the same password.” And it makes sense. Just imagine your email password is the same as your bank account password and someone hacks your email password… well now they have access to your bank account,too.

Even though it seems obvious not to do, it’s hard to follow when you have to remember a different password for every site you use. But using a password manager can be a game changer.

Tip: If you become a victim of identity theft, you should report it to the Federal Trade Commission. If you suspect someone was trying to steal your identity (even if they didn’t successfully) you should report this fraud to the Federal Trade Commission as well.

A good password manager should securely store all your usernames and passwords as well as generate secure passwords each time you create a new login so that you make sure your passwords aren’t the same. It makes it so you don't have to keep adding exclamation points to the end of your “Password1!.”

My favorite password manager is Lastpass. With Lastpass, you create one really secure “master password” that you’ll remember, and then it does the rest of the work for you—remembering all your other passwords and creating new unique passwords when you create new logins. There is a paid version with more benefits than these, but I’ve found the free version to be enough for my situation.

Ultimately, you want to make sure people can’t access your information online, and to prevent that, you need secure passwords stored in a safe place.

3. Freeze your credit at all three credit bureaus

This last tip is the best thing you can do to protect yourself and your credit.

Freezing your credit does exactly what it sounds like—it makes it so that no one can open an account, or apply for a loan/credit card using your name and Social Security number. And, it’s completely free to freeze and unfreeze!

To freeze your credit, you’ll need to go to each of the different credit bureaus: Experian, Transunion, and Equifax. Once there, you’ll verify who you are and create your account and password (this would be a great time to generate and store a secure password using your Lastpass or whatever password manager you choose).

Some of the bureaus require you to set up a long PIN in addition to a password. These are easy to forget, so make sure you save them in your password manager as well. You can freeze your credit for a certain period of time, but I recommend doing it indefinitely.

Tip: If you have minor children, freeze their credit at all three of the credit bureaus as well so no one can use their information to open accounts.

In the future, if you want to get a new credit card, a car loan, or mortgage, all you have to do is log back in and unfreeze your credit before you apply. You can unfreeze indefinitely, or my preference is to temporarily unfreeze. With the temporary option, you decide if you want to remain unfrozen for a day, a week, a month, etc. At the end of that time period, the credit bureau will automatically refreeze your credit again.

When you keep your personal information secure, you create a safer financial future for you and your family.

About the Author

Caish Echols

Caish Echols AFC®, CFP®

Caish has worked in the financial planning industry for over 5 years, including working for one of the pioneer financial planners who brought fee-only financial advice to Millennials. She loves making the complexities of finance simple to understand and helping people follow their own paths.

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