Identity Theft Prevention: What to Keep and What to Shred


Your shredder is one of your best defenses against identity theft. Identity thieves often look for documents containing personal information in trash cans, since many people unknowingly throw away information that can be used to open credit card accounts in their name or enable other forms of identity theft.

But at the same time, it’s a horrible feeling to realize you actually needed to save a document just as it is being cut into tiny pieces. Shredding a document too soon can also have significant financial ramifications, so you want to ensure that you retain tax records and related financial documents for a minimum of seven years in the event of an audit, as recommended by Consumer Reports.

Things to Save

Major Life Event Documents – According to the Federal Trade Commission (FTC), certain documents that are related to major life milestones should be saved forever. These include birth certificates, adoption papers, social security cards, citizenship papers, passports, marriage certificates, divorce papers and death certificates. Since the FTC recommends keeping these items forever, if these items are misplaced or shredded, you may want to get replacements since it is likely that you will need to present this information in official form in the future.

Tax Returns – The IRS recommends keeping tax returns for a period of time ranging from three years to indefinitely, depending on the situation. However, the FTC recommends taking a conservative approach and saving them forever. Since the ramifications of not having a tax return when you need it can be high, it makes sense to err on the side of caution with tax documents.

Things to Shred

Credit Card Offers – These are a gold mine for thieves, since they contain personal information such as your name and address.

Bank Statements – Although many banks cloak the account number, this document still gives identity thieves enough information to get started. Most experts suggest shredding bank statements after one year, but you could save yourself the trouble and  sign up for electronic statements instead.

Credit Card Statements – In addition to personal information and credit information, statements also contain a large amount of data about your whereabouts and habits. As with bank statements, the Center for Identity Management and Information Protection (CIMIP) suggests going paperless and opting for electronic statements to help safeguard your information.

Receipts – If a receipt has your credit card information or bank account number visible, it is especially important to shred this information.

Safeguarding your personal information is a key to preventing identity theft. By taking the time to destroy documents which can be damaging in the wrong hands, you can decrease your odds of becoming a victim of identity theft.

Closing Credit Card Accounts: Positive or Negative for Your Credit Score?

Is increasing your credit score on your list of goals? If so, you may immediately think cutting up your cards and closing your accounts is the first step on the road to a higher score. But before you pick up the phone, it’s important to understand the ramifications of closing accounts on your credit score.

Many people think that when they cut up a card the account is closed. However, you have to actually contact the credit card company to close out the account. If you are concerned about continuing to use the card, then cutting up the card to prevent usage while paying off the balance can be an effective strategy.

The reason closing accounts can impact your credit score is that a large portion of your credit score is calculated based on your debt-to-available credit, or credit utilization percentage. Most experts say 30 percent is a good debt-to-credit threshold, and the lower the better.

For example, you have the following credit cards: 

  • Card with $5,000 limit and $2,500 balance
  • Card with $7,000 limit and no balance

You have a 20.8 percent credit utilization, which is within the target range.  However, if you close the account with the $7,000 limit, then your credit utilization score changes to 50 percent, which above what experts recommend. Instead of having the intended effect of increasing your score, you may very likely cause your credit score to be lowered.

The Smart Way to Close Credit Cards

When considering closing accounts, use the following tips to potentially lessen the impact on your credit score:

  • Calculate your credit utilization percentages and carefully think through the impact of closing specific cards on your debt-to-available credit ratio. Determine which card makes the most sense to close based on the impact on your credit utilization score.
  • Consider paying off the credit cards you are going to keep open before cancelling any cards. This may lessen the impact on your credit utilization score.
  • After each card is paid off, check your credit report to ensure that the zero balance has been reported to the credit bureaus, which will also reduce the impact.
  • If you decide to close an account, contact the credit card company and follow procedures for closing the account. Different banks have different procedures ranging from completing a form to simply making a verbal request over the phone.

Increasing your credit score can take time and effort. By making sure you are not inadvertently making financial moves that cause a step back in the process, you can continue on the road to a healthy financial future. 

The Real Cost of Identity Theft


The Real Cost of Identity Theft
It is no secret that having your identity stolen is something you should actively protect yourself against. Resolving an identity theft is time consuming, may cause you to have credit requests denied, and leaves people feeling personally invaded. However, many people do not realize that their finances could take a significant hit after one’s identity is stolen, often in surprising ways. Every situation is different and much of the damage is not easily quantifiable.  When thinking about the potential cost of having your identity stolen, consider the following factors:
  • Time – When your identity is stolen, there is a long list of tasks you must complete immediately, including filling out an identity theft report, freezing your credit and requesting copies of your credit report. This takes time, often a lot of time, which takes away from other activities, such as spending time with family or possibly working. You will also need to carefully review your credit report regularly for the next few years to make sure new instances of fraud do not show up.
  • Higher interest rates – Identity theft victims may see their credit scores drop over time after a thief hasused stolen personal information to open a loan or new credit account and thendefaulted on payments.  In the meantime, this means that if your car is totaled in an accident and you apply for a car loan, you may end up paying a higher interest rate due to your damaged credit score.
  • Loss of Opportunity Costs – In some cases, your credit may be so damaged that you cannot even get a loan after an identity theft, according to a survey conducted by the Identity Theft Resource Center. This means you may not be able to buy the renovated condo down the street that is a fantastic deal, but instead pay a higher price next year for a unit in need of an update.
The bottom line is that each time your identity is stolen, you will face unexpected costs, both in dollars and hours. The best solution is to take steps to protect your identity. And spending a small amount each month to help keep your identity secure and prevent widespread damage if fraud is detected can end up saving you a lot of time and money in the long run.

Back to School Tips for Keeping Your Identity Safe

As students get ready to head off to school, perhaps for the first time, it’s important to keep in mind that just because someone is your roommate, it doesn’t mean they’re immediately your trusted friend. An FTC report from earlier this year shows that there were almost 12,000 victims of ID Theft under the age of 19 in 2013. We’ve previously addressed tips for protecting yourself from ID Theft (and we’re certain that most people have heard the basics like ‘don’t save your social security number on your computer,’ ‘don’t share your passwords,’ and ‘don’t leave credit cards lying around’ dozens of times).
Here is a pair of non-traditional tips that incoming students may not consider:
  •   Empty your pockets when you’re doing laundry- For many, dorm living is the first time that they have to do their own laundry. Make sure that important documents (driver’s license, student ID, etc) don’t end up stuck in the spin cycle.
  • Don’t let sticky fingers ruin your day- While it’s nice to think of the community spirit of dorm life, the reality is the some folks are a little less scrupulous than others. Here’s a great article on protecting your devices. 

Large Scale Breach Reported

A security firm based in Milwaukee has announced finding of a massive, 1.2 billion record breach, although it is unclear from the reports just which companies were affected. Also, the company who found the breach seems to be under fire for charging to find out if you were a victim of the breach.

And finally, since the breach seems to have hit e-mail and passwords, here’s a satirical look at creating strong passwords (our actual advice can be found here).

A Phishing Scam is Targeting Netflix Customers

There are currently reports of an online scam targeting Netflix customers. In short, while surfing the web, people are seeing a pop up (or received an e-mail with a link) that looks an awful lot like the Netflix log in (there is messaging saying something along the lines of ‘please log in, your account has encountered suspicious activity’).

Upon trying to log in, people are being directed to a customer service number, and the alleged representative is offering some sort of “suspicious activity resolution tool” in the form of a download. 

The download actually is a desktop sharing tool, which gives the perpetrator full access to a computer’s hard drive. Any info stored there (credit cards, passwords, picture, etc… any number of items that can expose people to identity theft) is suddenly available to thieves.

Keep an eye out for the scam.

My Personal Experience With PrivacyGuard’s Credit Monitoring Service

I wanted to blog about my own recent experience with PrivacyGuard’s credit monitoring service.  I will state that in this particular instance, it was not my intention to go out and “test” the performance of the service in any way.  I had already used PrivacyGuard to check my credit report and score and to verify that all of my credit information was correct, so I liked the service and I knew that it worked well for me.  However, I didn’t realize how efficient PrivacyGuard’s service could be until this most recent event.

It was Saturday, Dec 28 at about 4:30 pm when I was in a well known department store exchanging a couple of shirts that I received as Christmas presents and picking up a few more items courtesy of a gift card that Santa left under the tree for me. While at the checkout counter, the very friendly and helpful sales associate informed me of a sale on men’s shirts and told me that if I used the store’s credit card to charge the small balance of the purchase, I would receive an additional discount over the current sale price (which was already discounted almost 50%, mind you).  So, I whipped out my store card, blew the dust off and handed it to the associate who asked me about the last time I had used the card.  “About 2 years ago” was my response and she told me that I would probably have to renew the card in order to use it.  I agreed and it was all taken care of right there on the computer terminal at the checkout area.

Of course, I was careful about giving my information to the associate, but I was comfortable as I was able to input all of my own personal information into the system myself via the card keyboard and there were no other people around to “look over my shoulder” or listen to any of the dialogue that I had with the sales associate.  My credit was approved, the items were paid for and I realized further discounts on my merchandise, life was good.

Afterward, I got my goods and browsed through the mall for a bit, on the lookout for any other after-Christmas bargains.  I was able to pick up a few things here and there, and went back home satisfied and happy with my clothing and other purchases.  By now, it was probably about 6:30 pm and I looked forward to heading out to a small get-together with a few friends.

The next morning, Sunday, December 29, 2013, at 10:01 am, I received a text message alert and an e-mail alert from PrivacyGuard informing me of the following:

Attention….,
Member Number: XXXXXXXX
We have detected activity on your credit report.
Log in to your account at PrivacyGuard.com and view your updated score.
Understanding this notification
Your PrivacyGuard membership includes daily monitoring of your Experian,
Equifax, and TransUnion credit files.
Certain changes have been detected that may or may not be an
indication of fraud.

It’s important that you review the details of this notification immediately.
Our goal is to keep you better informed on your credit.
You can rest easier, knowing PrivacyGuard is working 24/7 to help protect your credit and identity

If you have any questions on your recent alert, please contact the Credit Information Hotline at 1-800-270-3819, Monday – Friday, 9:00 a.m. – 9:00 p.m. and Saturday, 10:00 a.m. – 7:00 p.m. (ET).

For questions on your membership account details, please contact us at 1-800-270-3819 or go to www.PrivacyGuard.com/secure/MyProfile.aspx

Sincerely,


PrivacyGuard Customer Service


When I saw the e-mail, I immediately thought of the transaction at the department store and I knew that they had probably made an inquiry into my credit report in order to approve the renewal of my store card.  The e-mail alert was direct enough to get my attention, yet balanced enough that it served to alert me of activity and not alarm me into any sort of panic situation.

However, since I had used my credit cards quite a bit over the preceding two weeks, I started to wonder if something else had triggered the alert.  Well, upon logging into my PrivacyGuard account and reviewing the recent activity, I verified that it was indeed the store card inquiry into my credit report that set off the alert.

I was very impressed with the PrivacyGuard service, as this notification reached me less than 24 hours after there was activity recorded on my credit report.  The service responded quickly, accurately and through multiple communication channels.  In this case, the activity was completely justified and there were no unauthorized transactions or activity that could have harmed my credit.  However, if this had been a some more nefarious, like a case of someone trying to open up a credit account under my name or social security number without my knowledge, I would have known about it less than 24 hours later and I could have taken the appropriate action to protect my good credit standing.  This is the very reason that many of us use credit monitoring as a credit protection tool. 

Please visit PrivacyGuard.com today to review their credit monitoring and identity theft protection services. I happen to work as a contractor for Affinion Group, the company that runs PrivacyGuard, but that hasn’t affected my opinion in any way.