Those credit card offers, insurance policies and other financial documents piling up in your home are more than just inconvenient; they're a potential identity theft and fraud risk.
Keeping certain documents around for longer than you need increases your risk, plus it clutters up your home. There are certain financial documents you should always shred to protect your privacy – and save space.
Identity theft is a growing risk, and it can be financially devastating. Consumers reported losing more than $12.5 billion to fraud in 2024, a 25% increase to the fraud reported in 2023, according to Federal Trade Commission (FTC) data. The FTC received 1.1 million reports of identity theft in 2024 alone.
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Many financial documents include most or even all the information needed to steal your identity, like your name and mailing address, email address, bank account numbers, insurance policy numbers and more.
The financial documents you should always shred
Shredding these financial documents once you no longer need them can help keep your information safe:
- Tax returns. Tax returns contain personal and financial information, including your Social Security number. While it’s important to keep your tax returns for at least seven years in case of an audit, you can shred tax returns older than seven years.
- Bank statements. It's recommended to keep your bank statements for up to three years in case of any discrepancies, but older statements should be shredded once you no longer need them. Bank statements often contain details like your account number, transaction information and your name and address, and thieves could potentially use them to gain access to your account.
- Credit card statements. Your credit card statement is full of personal information, from your name and address to your account number. It also contains transaction details that thieves can use to understand your buying habits. Unless you need your credit card statements for your taxes, keep them for a year and then shred them.
- Credit card offers. In addition to shredding your statements, you also need to shred any credit card offers you receive. A thief who accesses one of these offers may be able to apply for credit in your name, especially if they've been able to access other personal details like your Social Security number.
- Investment statements. Since investment statements may include your contact information and details about your accounts, it's important to keep them secure. It's suggested to keep the statements for at least one year. Be sure to check with your accountant, too, since you may need to hold onto certain investment statements for seven years for tax purposes.
- Pay stubs. Many pay stubs include your contact information, but some also list details about your bank account and retirement investments. It's recommended to keep your pay stubs for at least a year, but be sure to shred them once you no longer need them.
- Insurance documents. Health, car and home insurance documents are full of personal and financial information. It's ideal to keep insurance documents for as long as the policy is active. Once the policy has expired and all claims have been paid, you can shred your insurance documents.
- Utility statements. Utility statements often feature your personal information and some details about your payment method. Keep these statements if you need them for taxes or your business records, then shred any documents you no longer need.
In addition to these financial documents, consider other types of documents that might include information a thief could use to steal your identity.
For example, your medical records may include your name, address, age, Social Security number and other identifying information. Thieves could potentially use that information to take out a credit line in your name.
Generally speaking, if you don't need a document, it's safest to shred it to protect your privacy.
How to safely store financial documents until you can shred them
Since you need to hold onto certain items, like tax returns and mortgage documents, determine a way to safely store your financial documents. For example, you might invest in a locked filing cabinet or a fireproof safe for your home and keep the documents inside.
If you prefer to keep the documents offsite, you can rent a safe deposit box at a bank to ensure they're secure.
Tips for shredding financial documents
If you have just a few documents to shred at a time, you can purchase a shredder for your home and do the work yourself. Be sure that the shredded documents are illegible and dispose of the shreds in several different trash bags so that they can't possibly be pieced back together.
For larger shredding jobs, consider using a professional service. Retailers like the UPS Store, Staples, FedEx and Office Depot all offer paper shredding services and can handle larger shredding jobs.
You may also be able to find free or low-cost shredding events. Check with your town hall and local businesses like banks and recycling companies for information about any upcoming shredding events in your community.
Shredding financial documents is an excellent first step in protecting yourself from identity theft and fraud. In addition to shredding documents, make sure you safely store and protect any documents you need to keep.
If you haven't done so already, consider freezing your credit with all three credit bureaus to help prevent anyone from being able to apply for credit in your name. These extra steps can help protect your privacy and give you valuable peace of mind.
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