How fraud-protection pros keep their identity airtight

Bethany RamosCredit Score, Finance, Home Buying, Homeowners

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What does self-care in the digital age look like? It looks a little like fraud protection and a lot like strengthening your online identity.

With some footwork, you can beat the “fraud odds” that affect 16.7 million people and cost over $16.8 billion. Here’s how it’s done.

Why you should make data protection a daily habit & 9 ways to do it

Adopting a few new daily practices can help to protect your identity. And, some of these tips can also improve your online presence:

1. Check your credit score regularly.

Nearly a third of people admit to not knowing their credit score. Knowing the current state of your credit can help you identify any potential errors, stay on top of fraud, and define a clear action plan for maintaining or improving credit for the future, Steven Millstein, Certified Credit Counselor (CCC) and editor of CreditRepairExpert, says.

2. Get an EIN for online work.

This one goes out to all the freelancers (or anyone who’s taken their side hustle online). Instead of using your social security number for any freelancing or independent contract work, get an Employee Identification Number (EIN) instead. “This is absolutely free to do within your state and has no impact on your taxes,” R.J. Weiss, Certified Financial Planner and founder of The Ways to Wealth, a personal finance media company, says. “However, it does significantly protect your social security number from being floated.”

3. Keep making payments on time.

With payment history making up 30 to 35 percent of your credit score, Milstein considers late payments to be the most common mistake credit card holders make. Even one late payment can drastically affect your credit score. So, it’s important to always pay on the scheduled date.

4. Look for the green padlock every time you pay online.

You’d be mistaken in thinking that all sites use the same level of security, Will Craig, Managing Director of LeaseFetcher, a dedicated car leasing comparison website in the UK, says. Businesses also struggle with the shape-shifting nature of cybercrime. Experian’s 2018 Global Fraud and Identity Report found that nearly two-thirds of companies surveyed reported the same or higher level of fraud loss in the past year. An easy way to tell which sites have optimal security is by looking for a green padlock symbol in the toolbar of the website. “This is a sign that the website has an Extended Validation certificate (e.g., it’s very secure and follows high security standards).”

5. Make sure your secured and unsecured loans are in balance.

Having the right mix of secured (protected by collateral, like a car loan or a mortgage) and unsecured loans (not connected to collateral, like credit cards, personal loans, and student loans) supports an excellent credit score, Milstein says. He suggests ensuring that your secured loans make up the majority of your total borrowing.

6. Request a credit limit increase.

Try calling your credit card company and asking for an increase or see if you can request an increase online. If you call, be prepared to provide reasons for your request — a raise, job change, or solid track record of payment history. If your request is denied, stand firm, reference your loyalty or length of time as a customer, mention the limits of other credit card offers received in the mail, and ask to be transferred to the Retention Department. Once transferred, repeat your request and also use this time to ask for an interest rate decrease.

Successfully raising your credit limit and then spending the same amount you usually do means you’ll have a lower “credit utilization” percentage, a positive credit scoring factor. “Every month, when the credit bureaus check your spend versus your limit, you’ll see an increase in your credit score as long as you keep the percent utilized low,” Stacy Caprio of Fiscal Nerd says.

7. Sign up for email/text alerts.

One of the easiest ways you can protect yourself against identity and credit theft is to just pay attention when you’re billed each month. “Watch out for any deductions that don’t fit into your ordinary financial cycle and alert your bank,” says Craig.

If you don’t report fraudulent credit card charges right away, you could be liable, if only for the $50 maximum, Robert Siciliano, Security Awareness Expert and Safr.Me CEO, explains. Some credit card providers may have a “zero liability” policy that will get you off the hook entirely. But fraud liability on a debit card could range anywhere from $50 after two days, to $500 within 60 days, to full liability beyond 60 days, according to Regulation E of the Electronic Fund Transfer Act. Siciliano says, “You’re protected by federal law against unauthorized charges, but you have to dispute.”

8. Stay simple when it comes to credit.

A credit card is meant to be used — but not fully relied on. Millstein says charging your credit card too much is a mistake. Taking out too many credit cards at once can also flag you as a high-risk borrower since multiple hard inquiries, or “pulls,” will negatively affect your credit. Having a healthy balance of two to three credit cards is the norm, though Credit Karma noted an average of almost five cards among its members.

It’s important to point out that, while it doesn’t pay to shop around for credit cards, all mortgage-related hard credit pulls are counted as a single inquiry within a 45-day period to protect your credit when comparing lenders.

9. Stop using the same password already.

There are a few things that should go without saying — like using a combination of letters, numbers, and special characters; switching up your passwords; and not sharing them with anyone — but many of us do it anyway. In fact, 35 percent of people never proactively change their passwords and only update when prompted.

“You don’t have a single key for your car, house, and office, do you?” Craig says. “Having the same password for every account that you have makes it incredibly easy for a hacker to access your account. All they need to do is break one account to get into all of them.”

Don’t prequalify just anywhere

Talk about online security. You can use the LoanFly app to keep your mortgage moving as you set your mind at ease. Get prequalified in minutes, search up-to-date MLS listings, and upload secure loan documents on the fly. Download our free, secure app and find out how much house you can afford to buy.

For educational purposes only. Please contact your qualified professional for specific guidance.

Sources are deemed reliable but not guaranteed.

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