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How To Protect Against Identity Theft

        Tech | How-to Tech

Know Your Credit
Some risks are hard to avoid. Every time you hand your credit card to a clerk or waitress, there's a chance he or she could steal the information.
Some risks are hard to avoid. Every time you hand your credit card to a clerk or waitress, there's a chance he or she could steal the information.
© iStockphoto/MarcusPhoto1

The first thing you need to do to protect your credit is to be vigilant about it. Look over all bank and credit card statements carefully, and look into any suspicious charges. Track down even small charges you don't remember making, because sometimes a thief will make small purchases at first to see if the account is still active. Be wary if a bill doesn't show up when it ought to - someone might be stealing your mail to read your account numbers.

It's also very important to check your credit score at all three of the major credit rating companies (Equifax, Experian and TransUnion) on a regular basis. Some experts suggest checking them every three months (source: Abagnale). The Federal Trade Commission requires each of those companies to provide you with one free credit report every 12 months.

Looking at your credit report isn't the same as understanding it. The credit rating companies don't intend for that information to be viewed by consumers -- their business is providing credit reports to banks, merchants and employers. The information contained in a report can be a little difficult to comprehend. The first part contains your personal information, like your address, Social Security number and so forth.

The second part shows your credit history. Each credit account you have is known as a trade line, and it might be represented by a string of numbers or a recognizable name. The same account might show up multiple times if you've changed addresses. The account will also be accompanied by an R number that looks like this: "R3." The number basically means the number of months late you usually are in paying that bill. R1 is on time, R2 is occasionally late, and anything higher than that is a black mark on your credit rating (R0 means they don't have enough information about your account yet). The bottom line is, this is the part to pay the most attention to. Make sure there aren't any lines of credit listed that you don't know about.

The last part shows all the times a check has been run against your credit report, either because you applied for a loan or because a merchant or employer initiated the check. Look this part over for any abnormal patterns that might indicate someone other than you has been applying for credit in your name.

In the next section, we'll tell you how to keep your identity safe online.