Protect Your Identity

Every week I hear about a security breach that could lead to identity theft, and sometimes it's from big companies I've done business with. What can I do to make sure my identity doesn't get stolen?

The frequent security breaches show how easily your personal information can be stolen, even if you've made big efforts to protect yourself. Here's what you should do if you've been affected by a security breach:

Monitor your credit card statements and contact your card company immediately if you find any suspicious charges. Check your balances online, so you don't need to wait for the monthly statement to arrive. If your statement doesn't come one month, contact the card company just to make sure that an identity thief hasn't replaced your address with his.
Check your credit report frequently. You can order a free copy of your report from each of the three credit bureaus every year at AnnualCreditReport.com. Stagger your requests so you'll get one free report every four months.
Some security breaches are more dangerous than others. If your social security number and name are stolen, contact the three credit bureaus (Experian, Equifax and TransUnion) and put a fraud alert on your account, which requires lenders to verify your identification before extending credit in your name. The initial fraud alert lasts 90 days and entitles you to a free credit report from each of the bureaus.
If your ID is stolen, call the Federal Trade Commission's ID Theft Hotline (877-438-4338) and visit the FTC's identity theft page, which includes instructions for reporting ID theft. Fill out the identity theft affidavit to close accounts that ID thieves have used or fake accounts that have been opened in your name.
File a report with your local police. Get a copy of the report (or at least the number) and send it to your creditors.

For more advice, see the Identity Theft Resource Center and the Privacy Rights Clearinghouse, which includes details about each of the data breaches.

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As the "Ask Kim" columnist for Kiplinger's Personal Finance, Lankford receives hundreds of personal finance questions from readers every month. She is the author of Rescue Your Financial Life (McGraw-Hill, 2003), The Insurance Maze: How You Can Save Money on Insurance -- and Still Get the Coverage You Need (Kaplan, 2006), Kiplinger's Ask Kim for Money Smart Solutions (Kaplan, 2007) and The Kiplinger/BBB Personal Finance Guide for Military Families. She is frequently featured as a financial expert on television and radio, including NBC's Today Show, CNN, CNBC and National Public Radio.