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How to Protect Yourself Against Identity Theft

Given all the attention that identity theft has been getting from the mainstream media, I thought I'd spend a little time talking about steps that you can take to protect yourself against identity theft. Yes, it's mostly just common sense, but we can all use a reminder now and then.

Use strong (and unique) passwords

Use different passwords for every account, and avoid using easily available information such as your mother's maiden name, your birthday, part of your social security number, your phone number, your street address, a series of consecutive numbers, etc.

You should also make your passwords lengthy - 8 characters minimum, even better if it's 12+. And be sure to combine upper and lowercase letters, numbers, and symbols. Using letters and/or numbers only makes it easier to break, and thus you need to make it even longer if you choose to do so.

If you're curious about what makes for a good password, check out one of these password checkers: Microsoft or Surveillance-Video (there are many others). And don't write your passwords down! Yes, they're hard to remember. That's why I use a password encryption program to store everything on my laptop.

Secure your personal information

Keep sensitive information away from prying eyes (roommates, service people, potential buyers when selling a home, etc.). Lock up financial statements and other sensitive documents in a filing cabinet, drop off outgoing mail that contains sensitive info in a secure USPS mailbox, and be sure to pick up your mail promptly.

Opt out of everything that you can and, when traveling, have your mail held until you return. Shred your credit card receipts, all credit offers (tearing them up doesn't necessarily work), insurance paperwork, bank statements, etc.

Think carefully before writing a paper check to unknown individuals, don't include unnecessary information on your checks, and take care when ordering new checks.

This should go without saying, but don't give out personal information on the phone or over the internet unless you're the one that initiated the contact. Don't respond to unsolicited offers. If you're interested in a particular solicitation, confirm that you are dealing with a legitimate entity - manually type their URL into the address bar of your browser (it's easy to cloak web addresses in e-mails) or call customer service using a known contact number (from your statement, the back of your credit card, etc.).

Don't carry your social security card in your wallet, and do not give out your SSN unless absolutely necessary. Ask to use something besides your SSN on your driver's license and insurance cards, and don't include your SSN or driver's license number on checks. Don't carry extraneous credit cards when you go out, and don't leave your purse our wallet lying around (like at work).

On the computer

Keep your operating systems, anti-virus software, and anti-spyware programs up-to-date. If you want to avoid many of the headaches associated with viruses and spyware, use a Mac. I'm only partly kidding when I say this - I use a Mac and pretty much never have to think about such things (though that might eventually change). Use a firewall, or even turn off file-sharing to prevent network access to your computer. Only submit sensitive information over secure connections (look for the little lock icon in your browser window) and don't allow your browser to save your important passwords - instead, store them in a secure encryption program.

Monitor your credit report

As many of you know, you are now entitled to one free credit report per year from each of the three major credit bureaus (go here for immediate access). I recommend spreading these out over the course of the year and checking one every four months such that you can detect problems as they occur. I personally wouldn't bother with any of the paid credit monitoring services out there.