True or false: If your credit score is below 580, identity thieves have no desire to steal your personal information.
If you said “true,” you’ve bought into a myth held by many Americans. According to a May 2017 survey by Experian, 9 percent of consumers believe they aren’t at risk of identity theft because they have bad credit or not enough money. Additionally, 72 percent believe fraudsters are only interested in stealing wealthy people’s identities.
These findings reflect consumers’ misconceptions about identity theft. While the stolen identity of a wealthy or high-credit consumer may be worth more to shady traders on the dark web, people with lower incomes and poor credit are as vulnerable as anyone else.
“It really doesn’t make any difference what socioeconomic class you’re from,” said Michael Bruemmer, vice president of identity protection at Experian. “It only requires someone’s Social Security number to begin the process of creating a synthetic identity.”
Born with a target on your back
Your Social Security number alone can be used to obtain fraudulent identity cards, bank and utility accounts and even some payday loans, whether you have bad credit or none at all. Even newborn babies aren’t safe from identity theft, since they can be issued Social Security numbers within days or weeks of being born.
Bruemmer said there are many cases in which an identity thief first opens a cellphone account using only a stolen Social Security number, then uses the established cellphone account to apply for credit. Once a thief opens a utility or credit account in your name, there’s a good chance he won’t pay the bills. Although utilities in many states are barred by law from reporting negative consumer data, an unpaid electricity bill could eventually show up on your credit report as a collection item.
Meanwhile, an unpaid balance on a fraudulent credit card or loan can send an already low credit score into the gutter. Many payday loans can be obtained without a credit check. And once a thief obtains a high-interest loan using your personal information, you’re left with a ballooning debt you may not even know exists until a bill collector comes calling.
“Just because your credit score or lack of credit is not useful to you … the thief doesn’t care,” said Eva Velasquez, president and CEO of the Identity Theft Resource Center. “The thief can still get high interest loans. They don’t care that it’s at 22 percent interest — they’ve got their couple of thousand dollars. That’s valuable to them.”
Don’t be afraid of bad news
It’s not unusual for a consumer with a low credit score to avoid checking his credit report out of shame or denial. But Velasquez noted that complacency affects consumers all over the credit score spectrum.
“There certainly are folks who are vigilant and take a lot of pride in checking and maintaining their credit score, but they’re a small segment of the population,” she said. “It’s not something you really see until you need it.”
However, it’s best to check your credit report at least once per month, whether it contains good news or bad news. If you discover a fraudulent account, there are steps you can take right away to clear it from your credit report. The longer the account remains open, the more damage a thief can do.
“Any thief would prefer to steal from someone who’s not paying attention, whether that means leaving their doors unlocked, the keys in the ignition, or, in this case, not routinely checking their credit report,” said Martin Lynch, director of education at Cambridge Credit Counseling. “Lack of attention makes it more likely that the thief won’t be detected for a while, which gives them enough time to open accounts and make use of them.”
Identity theft is difficult to prevent altogether. But minimizing your risk can give you peace of mind, and that’s a big advantage if you’re working to improve your credit score.
10 ways to protect yourself from identity theft
No matter what your financial situation, it’s important to be vigilant and take steps to protect your personally identifiable information. Here are 10 steps you can take to minimize the risk of identity theft:
- Monitor your credit report and your credit score.
You can check your credit score and your credit report for free at CreditCards.com. The three major credit bureaus also offer credit monitoring services for a monthly fee.
- Set up text message alerts on your bank and credit card accounts.
Most banks, credit unions and card issuers offer free transaction reporting that can alert you to erroneous purchases or money transfers. Experian’s Bruemmer noted that many fraud alert services allow you to set limits based on dollar amount and the ZIP code where the purchase took place.
- Protect your passwords.
Get creative when making passwords online — don’t use birthdays or names of pets, for instance — and avoid using the same password for multiple accounts. Password manager programs such as Dashlane, LastPass and LogMeOnce allow you to create a master password that randomly generates unique keys for each individual account you own.
- Don’t log in to your accounts on public Wi-Fi.
It can be difficult to avoid public Wi-Fi altogether, particularly if you travel a lot or work remotely. But you should never log in to your bank or credit card accounts while you’re connected to a free Wi-Fi account that anyone can access without a password. If you have a smartphone, consider setting it up as a “hot spot” and connecting to that instead. “Anything on public Wi-Fi can generally be viewed by someone else,” Bruemmer said.
- Don’t click on emailed links. Most web-savvy consumers know not to click on links they receive from sketchy email addresses or senders they don’t know. But Bruemmer recommends not clicking on any emailed link unless you’re on the phone with the sender and he tells you he’s sending a link via email. Otherwise, you could be exposed to ransomware, malware or viruses.
- Don’t post personal information on social media.
It can be tempting to celebrate family milestones like your child’s first driver’s license or work permit by snapping a photo of the document and sharing it on social media. Never post such photos, even if your social media account has strong privacy settings. “You can just say, ‘Yay, I got the job!'” Velasquez of the Identity Theft Resource Center said.
- Open all your mail — even the junk.
Banks and credit card issuers send many pieces of mail to consumers, and it can be easy to ignore anything that’s not a bill. That’s a potentially dangerous oversight. An envelope that looks like an unwanted promotional offer from a card issuer could be an attempt to confirm an account that was opened in your name. “It’s not fun and it’s tedious … but I’d rather spend a couple of minutes per week doing that than trying to clean up an issue that’s gone undetected,” Velasquez said.
- Treat your personal information like your jewelry.
Secure any documents that contain your Social Security number or financial information in a locked drawer or cabinet. This is critical if you ever let service providers such as handymen, cleaners or utility workers into your house.
- If it’s 3 months old, shred it.
Shredding utility bills and credit card or mortgage statements prevents clutter and keeps your information safe. “There’s no reason for you to keep any documents beyond three months, unless they’re for tax purposes,” Bruemmer said.
- Always assume that thieves are one step ahead.
Identity thieves are constantly adapting to fraud prevention techniques and technological changes. You can stay on top of new developments by tracking identity theft stories via Google Alerts or on Twitter and other social media outlets. “It never ceases to amaze me how thieves can figure out how to monetize personal data,” Velasquez said.
Editor’s note: This story, “Bad credit? You’re still a target for identity thieves” originally was posted on CreditCards.com.