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.