6 Steps To Avoid Identity Theft Without a Service

There were almost 1.4 million cases of identity theft in the United States in 2020, with people using stolen identities to sign up for credit cards, collect fraudulent unemployment benefits and countless other scams. Cleaning up from identity theft can be a real pain and can drag on for years.

Identity theft protection is an easy counter to this problem. You pay for a service and they keep your identity safe. However, that protection comes at a price. What are your options for keeping safe from identity theft without paying for a protection service? The answer: Keep it simple.

A key part of protecting yourself against identity theft is to remember that scammers aim for easy targets. If you take a few simple steps to ensure that you don’t fall prey to the simplest scams, identity thieves will move on to another target.

In this article

    6 simple identity theft prevention strategies

    Read your bank and credit card statements carefully

    Whenever you receive a bank or credit card statement, review it carefully, line by line. Make sure you recognize every transaction. If you find transactions that don’t make any sense to you or that you can’t trace, contact the financial institution immediately.

    If you conclude that someone was using your account without your authorization, request to have that charge removed and also request to have a new card issued to you. In some cases with bank accounts, you may also want to change your account number.

    Don’t click on email links

    If you receive an email that has a clickable link on it and you want to follow up on whatever that email is about, don’t click on the link. Instead, independently go to the website for the business and find the information yourself. Don’t even trust links that appear to be from friends, as scammers can easily fake email addresses. Ask friends to put in the subject line information unique to them so you know it’s legitimate, or confirm with them by text that they sent you that cute puppy You Tube video.

    Why do this? Often, links in emails will look like one thing but actually take you to something else. You may end up at a web form or a sign-in prompt that looks completely legitimate but is actually a fake site so that when you sign in, you give that information to a scammer.

    This can take a bit longer, of course, but this simple step alone protects you from a wide array of email tricks that can steal your identity.

    Don’t give out personal information on the phone 

    The same policy works with unsolicited phone calls, too. If someone calls you, never give them your personal information no matter what they tell you. Hang up and contact the company in question directly if you feel that there is something important that you should follow up on.

    For example, don’t give information about yourself to a person on the phone claiming to be from your bank or claiming to be from the IRS. If you’re contacted by someone claiming to be from those organizations, use the actual website of the organization to look up the correct number, then call them back. If they don’t know what you’re talking about, then you know someone was just trying to scam you.

    Have a password on all of your devices

    Every computer and mobile device that you own should be password protected, ideally with something complicated enough that it can’t easily be guessed. You should have it set to automatically lock with a password every time you leave the device unused and every time you restart it. This is a very simple way to make things just a little bit tougher for a thief.

    Choose a password that is not just a sequence of numbers (if possible) and isn’t a single word. A good strategy is to combine the two – use a word and a number you remember and alternate between the two. For example, I might use the password Trent and the number 2084 to create the password “T2r0e8n4t,” which is very difficult to crack but fairly easy to remember. 

    Pass-phrases are particularly effective, such as: “My H4sb@nd Is A R0ck St@r!”. Some security experts recommend using a favorite song for inspiration. Have a unique password for each account; don’t recycle. 

    Check your credit reports regularly

    The three major credit bureaus (TransUnion, Equifax and Experian) collect your credit habits from lenders; potential lenders use them to assess your creditworthiness. These reports are also used to generate your credit scores. Check your credit reports from the credit bureaus for free once a year. One trick is to check one report every four months, alternating between the three, so that you are monitoring your credit more closely.

    Once you’ve grabbed your credit report, go through it line by line to make sure you recognize the information. Contact the lenders first to get information corrected. The credit bureaus will not change accurate information. Reach out to the credit bureau about personal information such as your name, aliases, address or employer.

    Use a password manager

    A final tip: Use a password manager to keep your passwords safe. A password manager is software that keeps a heavily encrypted file of all of your passwords that can only be accessed by you. This allows you to have different, very complicated passwords for each of your financial services and other accounts, meaning that if one is hacked, the hackers won’t have access to any other accounts.

    As long as you memorize a single very secure password for your password manager, it will manage secure passwords for all of your needs. There are many software packages out there that provide this service, such as 1Password and LastPass.

    What if you still want a service?

    If you still feel more comfortable using a service, The Simple Dollar recommends several identity theft protection services. These can provide peace of mind, but they work best in conjunction with using the other steps in this article.

    What do these services do? Identity theft services monitor personally identifiable information in credit applications, public records, websites and other places for any unusual activity that could be signs of identity theft, according to the Consumer Financial Protection Bureau. Premium packages from these services offer additional features that help you fix identity theft problems and offer proactive help, such as letting you know if your bank has been hacked before it impacts you specifically.

    What about credit monitoring? Credit monitoring is a part of identity theft services. Alone, it’s usually much less expensive, but it typically just watches your credit report.

    We welcome your feedback on this article. Contact us at inquiries@thesimpledollar.com with comments or questions.

    Trent Hamm

    Founder & Columnist

    Trent Hamm founded The Simple Dollar in 2006 and still writes a daily column on personal finance. He’s the author of three books published by Simon & Schuster and Financial Times Press, has contributed to Business Insider, US News & World Report, Yahoo Finance, and Lifehacker, and his financial advice has been featured in The New York Times, TIME, Forbes, The Guardian, and elsewhere.