How to Protect Your Finances From Identity Theft

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With Black Friday and Cyber Monday right around the corner, you’re sure to be entering your credit card info online a heck of a lot more than usual. As you do so, how can you be sure you’re not opening yourself up to credit card fraud and other kinds of identity theft? Having your identity stolen can be a nightmare that damages your finances and credit score. Fortunately, there are steps you can take to help protect yourself.

How to protect your finances from identity theft

Monitor your accounts

Carefully monitor all of your financial accounts on a regular basis. This is good advice all year, but especially during the holidays. Watch for any suspicious activity, such as purchases you don’t recognize.

If you see something suspicious, contact your payment method’s fraud department immediately. Here’s our guide to when you might need to dispute a credit card charge versus file a fraud complaint.

It’s a good idea to review your credit card and bank statements thoroughly each month, and to check your credit report at least once a year for accounts you don’t recognize. On that note…

Check your credit report

Get a copy of your credit report from each of the three major credit bureaus once per year. You can do this at any time at no cost through Equifax, Experian, and TransUnion. Scan the reports for any accounts you don’t recognize as your own. This helps you catch fraudulent activity in your name faster.

Set up alerts

Many banks and credit card companies allow you to set up alerts to notify you of certain account activity. For example, you can be alerted for any charges over a certain amount or when a withdrawal is made. These alerts allow you to take quick action if fraudulent activity occurs.

Use strong passwords

Create unique, strong passwords for all your financial accounts. Avoid common or easily guessed passwords that identity thieves could crack. Use a mix of letters, numbers, and symbols. And if you upgrade your passwords to be as random (aka strong) as possible, you don’t have to worry about constantly changing them.

Still, changing your passwords is especially important if you receive word your information has been compromised in a data breach, Make sure change your password at any sites where you use the same login information—and stop reusing passwords already!

Freeze your credit

If you suspect fraud, placing a freeze on your credit prevents new accounts from being opened in your name without the freeze being lifted. This makes it harder for thieves to open fraudulent accounts. Just remember to lift the freeze when applying for legitimate new credit.

Be wary of scams

Don’t fall for phone calls, emails or texts asking for your personal information. Banks and financial institutions will not contact you asking for sensitive data like passwords or social security numbers. Avoid clicking links or downloading attachments from sources you don’t know. And yes, even in the digital age, ATM card skimming still happens. For more, read up on all the ways your credit card information can be stolen.

Being proactive is the best way to thwart scammers and other bad actors. Monitoring your accounts, using strong passwords, and checking your credit are essential steps. With proper precautions, you can help secure your finances. For more, stay up-to-date with Lifehacker’s scam coverage here.

Meredith Dietz

Senior Finance Writer

Meredith Dietz is Lifehacker’s Senior Finance Writer. She earned her bachelor’s degree in English and Communications from Northeastern University, where she graduated as valedictorian of her college. She grew up waitressing in her family restaurant in Wilmington, DE and worked at Hasbro Games, where she wrote rules for new games. Previously, she worked in the non-profit space as a Leadership Resident with the Harpswell Foundation in Phnom Penh, Cambodia; later, she was a travel coordinator for a study abroad program that traced the rise of fascist propaganda across Western Europe.

Since then, Meredith has been driven to make personal finance accessible and address taboos of talking openly about money, including debt, investing, and saving for retirement. Outside of finance writing, Meredith is a marathon runner and stand-up comedian who has been a regular contributor to The Onion and Reductress. Meredith lives in Brooklyn, NY.

Read Meredith’s full bio