Sometimes I long for the days of old, the days when we could trust the people we deal with and never question their integrity. Unfortunately, if we choose to use the internet consistently, we must be prepared to be extremely careful when we deal with anyone. When it comes to protecting our credit, we must be even more careful than ever.



In this age of information, credit fraud is not a difficult crime to perpetrate. The idea that a thief could gain access to your account information or personal data is not as implausible as you might think--social security number misuse has increased over the last two years, resulting in a variety of credit-related crimes.

Fortunately, you can fight back against credit fraud by learning how credit fraud and identity theft occur, and by actively monitoring your credit report for unauthorized account use on a regular basis. Your credit report will list any new activity on accounts you haven't been using, as well as new accounts that you did not open.

One of the best ways to keep track of new information that is added to your credit report is the CreditCheck Monitoring Service, which provides Online Monthly Monitoring Alerts to inform you of new derogatory information, recent inquiries into your credit, and several indicators of possible credit fraud.

To have credit report information at your fingertips is the best way to shut an identity thief down--you can begin the process of notifying your creditors of the fraud, changing your passwords, and closing down fraudulent accounts before they wind up in the hands of collectors and compromise your good credit.

How Credit Fraud and Identity Theft Occur

Specific personal data, such as your Social Security number, home address and mother's maiden name, can be all a thief needs to obtain a fraudulent driver's license, take over existing bank or credit accounts, divert card statements to a different address, or even apply for new credit card accounts under your name. Thieves can obtain this information in variety of ways, including fishing through trash for account statements, lifting cards from lost or stolen purses, wallets and briefcases, or through telephone or Internet scams.

How to Prevent Credit Fraud and Identity Theft

Customers may be in a position to prevent potential identity theft by closely guarding their personal data. For example, never give out your Social Security number over the phone unless you know the company you are dealing with and have initiated the call.

Similarly, if your mother's maiden name is not likely to be a secure password, consider changing it to something a little more difficult for a thief to obtain. Also, carry only the cards you are actually going to use, and leave official documents like Social Security cards, passports and birth certificates at home or in a safety deposit box.

Account Takeover Fraud

Credit card account statements contain a lot of sensitive information that you don't want thieves to get a hold of, and even store receipts will frequently have your credit card number printed on them. Sometimes an account number is all a thief needs to make charges and obtain cash advances. It's a good idea to shred all financial documents before discarding them.

A thief in possession of sensitive information about you may also be able to go one step further, and commit account takeover fraud, simply by calling your creditor, reading off your account number, a partial Social Security number and your mother's maiden name, and asking them to change the mailing address on the account. For this reason, if you don't receive a credit card statement on time, you should call your creditor immediately to verify that the address has not been changed.

Pre-Approved Credit Offers

Another source of potential credit fraud is pre-approved credit offers. A thief who intercepts one may fill out the application and change the address to obtain a credit card in your name for which you will never receive a statement. (To combat this, some creditors will not issue a card to a new address on a pre-approved offer certificate, but this policy isn't universal.) This makes checking your credit report especially important, because it will show you if there are accounts being reported in your name of which you are not aware.

The thief may even make the minimum payments for a while, until such time as the card is maxed out. Then the account would eventually be turned over for collections--in your name, and listed on your credit report.