As new graduates climb down from the ivory tower (diploma in hand), many will be facing “real world” transactions for the first time, and they are at risk. Identity-related crimes, bad deals and credit score pitfalls pockmark the road ahead. And for those new grads who are thinking, “It can’t happen to me,” prepare to say “Hello” to reality.
Data breaches and the identity theft cases that stem from them have become certainties in life, right behind death and taxes. There are things you can do to better protect yourself, detect the problems and lessen the damage when the inevitable occurs. However, if you think a compromise to your credit or identity won’t cost you much in actual dollars and cents, consider the emotional upheaval and hours of frustration spent dealing with it that are non-refundable.
The bottom line for new grads: Your identity and your credit are incredibly valuable assets. And while it may be a wee bit early to be thinking about your investment portfolio, you already have two investment-grade portfolios that you should be managing: your credit portfolio and your identity portfolio.
Here are some general rules of the road for protecting your identity that, if you follow them, could make life a tad easier for you.
When you’re new to credit cards, it’s easy to make some rookie mistakes that can threaten your identity.
First, be careful where you share your credit card information. You are your worst enemy when it comes to credit card fraud if you’re not doing your due diligence to make sure the websites, companies and even friends with which you’re sharing your credit card information are secure. And while your account numbers can be stolen any number of ways, it doesn’t hurt to be extra-vigilant if you also happen to live with roommates.
You should check your account statements regularly, daily even, for unauthorized purchases. If someone steals your credit or debit card number and goes on a shopping spree, and you don’t discover it soon enough to stop the damage, you could be in a world of financial pain.
Monitor your credit reports and keep tabs on your credit scores. This will let you make sure all the accounts listed are yours. Often the first indication that you’ve become a victim of new account fraud comes from these reports. Knowing can allow you to address the issue long before a collection agency comes asking for money you never spent. You can check your credit reports for free once a year from each of the three credit reporting agencies through AnnualCreditReport.com. You can also monitor two of your credit scores for free with a Credit.com account – if you notice an unexpected drop in your credit scores, you should check your reports for any problems, including fraudulent accounts.
So, what’s to know about utilities? You call a customer service representative who takes down your name, address and phone number, and when your bill comes at the end of the month, you pay it. It’s so simple, really anyone could do it—which is precisely the problem. Identity thieves are more than happy to steal electricity in your name, and because it can be so easy for them to do it, you may not know about it until you get a notice from a collection agency for unpaid utilities and your credit score takes a hit.
What you can do: always scrutinize your bills and immediately check on any questionable items, always pay your bills on time, (consider enrolling in a direct debit program), protect your personally identifiable information (which means guarding your Social Security number from all but the select few who need to know it), and bear in mind that tracking your scores and checking your reports regularly can alert you to a problem sooner rather than later. There’s no such thing as being too paranoid when it comes to monitoring.
|Applying for Jobs|
Many new graduates don’t realize that a significant number of companies and institutions will check credit reports (not credit scores) before making an offer of employment. They’re required to get your consent (usually in writing) before checking your reports and most companies will ask for your Social Security number, a major asset in your identity portfolio, in order to do so.
Of course, make sure the employer is legit, and if you’re nervous about providing your Social Security number to a prospective employer, do a little research before you hand it over. Most fake job scams will ask for your SSN upfront, before you even interview.
|Doing Your Taxes|
For some college graduates, taxes have neither been a part of their lexicon nor their lives. Either their parents filed for them, or they’ve not yet worked at a job that made it necessary.
If you’re dealing with your taxes for the first time, there’s something you should know: Not everyone who offers to help will be trustworthy. There are thieves out there, so do your homework before hiring an accountant or a tax preparation service. Tax-related identity theft is another reason you should be very careful about who has access to your personally identifiable information. If a fraudster files a tax return in your name before you do, you’ll spend six months or more waiting for the IRS to correct the mistake and send your refund.
A Final Note About Protecting Your Identity
In the world of personal finance, so many are poised to take you for a ride, steal your personally identifiable information and potentially wreck your credit. They see new graduates as fresh meat. After all, most new grads have a clean credit history and may not be aware of the potential identity thieves lurking in the real world. However, if you properly manage and vigilantly monitor your identity portfolio, it will be a resume and not a rap sheet.
Adam Levin is chairman and co-founder of Credit.com and Identity Theft 911. His experience as former director of the New Jersey Division of Consumer Affairs gives him unique insight into consumer privacy, legislation and financial advocacy. He is a nationally recognized expert on identity theft and credit.