10 Ways to Protect Yourself from ID Theft

Shredding documents is a first step, but there's a lot more that you can do.

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Identity theft can be as simple as losing your Facebook account to a phisher, or as serious as having someone assume your entire identity. It is a real and serious problem. According to the Javelin Strategy & Research, this problem affected over 11 million Americans in 2009. This means you have a better chance of getting your identity stolen than winning a lottery jackpot.

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If you're lucky, it won't cause you anything more than a few phone calls to fix the problems. But more likely, it would ruin your credit score and finances, and cause you time and money. The simplest way to shield you against identity theft is to just enroll in a credit monitoring service or an identity protection service to—but they cost money. Fortunately, there are many simple things that you can do to reduce your chance of becoming a victim.

Mind your purse and wallet

I know some people like to carry everything they could in their purse or wallet. It might be convenient, but this can easily turns into a nightmare if you lose your purse or wallet with your "entire life" in it. Don't carry more than you need to in your purse or wallet. For example, don't carry around your Social Security card or your social security number, don't carry more than one or two credit cards at a time, and don't carry around PIN numbers for your ATM and credit cards.

Avoid questionable stores and online merchants

I often see super good deals from stores or websites I have never heard of before. But before you jump on the deal, check them out on sites such as the Better Business Bureau. You should also search for the store name and add the word "complaints", "problems", or "scam."

Protect key information

Your Social Security Number and birth date can unlock a lot of information and give thieves a great deal of access to your personal and financial lives. To help you protect these information, never give them out without understanding why it is necessary to do so, never use them as part of your username or password, and avoid using your real birth date on various social websites.

Regularly review your credit report and scores

You can get one free credit report per year from each of the three credit bureaus through AnnualCreditReport.com. You can also easily get your free credit scores from many websites. The things to look out for in your credit reports include suspicious accounts, activities, and addresses that you do not recognize.

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Review your credit card statements and bank statements

Reviewing your statements won't protect you from identity theft pros who open brand new accounts and have the statements mailed elsewhere. However, it is still a good idea to review your credit card statements, because it will help protect you against petty theft -- someone using your credit card information to make purchases.

Cross-shred any document that contains sensitive information

One thing I always keep handy in my office is a good cross-shred paper shredder. You should never throw any paper containing sensitive information out along with your normal trash, because someone can dumpster dive and take your information. The best way to get rid of these is to cross-shred them and recycle the confetti. These documents include credit card solicitations, loan applications, tax forms, bills and invoices -- anything that contains personal information.

Keep a list of all your account numbers and contact information in a safe place

Invest in a document safe to keep all of your important documents in one place. Also, make a list of your account numbers, e.g., for your credit, debit, and ATM cards, with the phone numbers. If you lose your purse or wallet, you can easily use the list to call all the banks and credit card companies to put your accounts on hold.

Mind your mails

You should remove mails from your mailbox daily. If you are living in a densely populate area, you should consider getting a mailbox that could be locked and only accessible by you. Yes, it's a federal crime to steal mails, but that won't stop identity thieves from doing it anyway.

Use strong usernames and passwords

In addition to not using personal information as part of your usernames and passwords, you should also learn how to create strong usernames and passwords. Also, avoid using the same username and password for all your online accounts.

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Do not click on links included in email

One of the most popular techniques to extract you from your online identity is called phishing. With this method, phishers send you an official looking email with masked link, asking you to log in to your account. When you click on the link, you're taken to an official looking website but at a different URL. When you enter your username and password, the thief has the information needed to access your account. Do not click on links included in email, especially when the URL is different from the site you expected. It's better to visit the site by typing in the URL manually.

Of course, there are more things you can do, but these should save you from 99 percent of the problems. If you have more tips not listed here, please share them in the comment section below.

Pinyo is the owner of Moolanomy Personal Finance Blog, which covers a wide range of personal finance  and investing topics, with features that include reviews, comparison guides, and Q&A sections.