What is it?
Identity theft happens when someone else uses your personal information to open credit accounts in your name. Since the accounts are in your name, you can be liable for any charges made to them.
How does it happen?
Identity thieves take personal information from you out of your mailbox, your garbage, off of canceled checks, etc. Accounts can be opened with your name and address or your social security number.
How do I know if I've been a victim?
Checking your credit report regularly will keep you apprised of what accounts are being credited to you. While not every inaccuracy in your credit report is an indicator of identity theft*, keeping track of what is yours and what you don't recognize on your report will let you know if someone else is using your credit.
*Sometimes inaccuracies can just be due to poor record keeping on the part of the credit bureau. Yes, it does happen. The author of this article had her credit merged with a random man by the credit bureau.
What do I do if someone steals my identity?
Under the Fair and Accurate Credit Transactions Act (FACTA), credit bureaus are required to place a fraud alert in the file of a consumer who believes he or she has been a victim of identity theft. That person must request it. The fraud alert can last from 90 days to 7 years, depending on what you request. Once an alert has been placed on your file, no new accounts can be opened with your information while the fraud alert is active. That means no one can open a new account, not even you. Further, anytime anyone requests information about your credit, the bureau may block information and must inform the requester of the fraud alert.
When you discover or become suspicious that you are or may be a victim of identity theft, contact the credit bureaus and let them know as soon as possible. Do this to avoid being liable for charges made on accounts opened in your name by a thief.
Your credit is your reputation. Take good care of it. Guard it. While there are ways to fix problems with your credit report, monitoring it is a good way to prevent your credit from becoming a mess.
For more information concerning identity theft, how to prevent it, and how to handle it if it's happened to you, see:
How Safe Are You?
Wells Fargo Bank has a quiz on its website to test how safe you are from identity theft as it relates to your bank and credit card accounts. It can be found here:https://www.wellsfargo.com/privacy_security/fraud/protect/quiz/
Some basics on keeping your identity safe: