Learn How to Prevent Identity Theft

June 16, 2025 

In today’s digital age, identity theft has become one of the most prevalent financial crimes affecting millions of Americans each year. According to the Federal Trade Commission (FTC), there were 5.7 million reports of identity theft and fraud in 2023, with losses totaling over $10 billion [1]. Understanding what identity theft is and how to prevent it is essential for safeguarding your financial health and personal information.

What Is Identity Theft?

Identity theft occurs when someone steals your personal information—such as your name, Social Security number, financial account numbers, or credit card information—and uses it without your permission, typically for financial gain. Identity thieves can use your information to open new credit accounts, file fraudulent tax returns, make unauthorized purchases, or even obtain medical services in your name. 

The Consumer Financial Protection Bureau (CFPB) identifies several common types of identity theft [2]: 

• Financial identity theft: Using your information to access existing accounts or open new ones 
• Medical identity theft: Using your identity to obtain healthcare services or insurance benefits 
• Tax identity theft: Filing a fraudulent tax return using your Social Security number 
• Social identity theft: Taking over your social media accounts or creating fake profiles in your name 
• Child identity theft: Using a child’s clean credit history to open accounts and take out loans 

Warning Signs of Identity Theft

According to the National Cybersecurity Alliance, you might be a victim of identity theft if you notice any of these warning signs [3]: 

• Unfamiliar charges on your bank or credit card statements 
• Bills for products or services you didn’t purchase 
• Calls from debt collectors about debts that aren’t yours 
• New accounts appearing on your credit report that you didn’t open 
• Medical bills for services you didn’t receive 
• Notification that your information was compromised in a data breach 
• Unexplained drops in your credit score 
• Missing mail or email, particularly financial statements 

How to Prevent Identity Theft

Protect Your Personal Information

Be cautious about sharing personal information, whether online, over the phone, or in person. The Identity Theft Resource Center recommends never providing sensitive information unless you initiated the contact and are certain about who’s receiving it [4].

• Shred documents containing personal information before disposing of them 
• Use a secure mailbox for sending and receiving mail 
• Remove personal information from old devices before disposal or recycling 
• Be wary of unsolicited requests for personal information via phone, email, or text 

Practice Good Password Hygiene

According to the National Institute of Standards and Technology (NIST), strong password practices are crucial for preventing unauthorized access to your accounts [5]: 

• Use unique, complex passwords for each account 
• Consider using a reputable password manager to generate and store passwords securely 
• Enable multi-factor authentication (MFA) whenever possible 
• Change passwords immediately if you suspect a breach 

Monitor Your Financial Accounts and Credit Reports

Regular monitoring is essential for early detection of identity theft:

• Review bank and credit card statements monthly for unauthorized transactions 
• Check your credit reports regularly—you’re entitled to one free credit report annually from each of the three major credit bureaus through AnnualCreditReport.com 
• Consider credit monitoring services that alert you to suspicious activity 

Secure Your Digital Life

The Cybersecurity and Infrastructure Security Agency (CISA) recommends these digital security practices [6]:

• Keep your devices, operating systems, and applications updated with the latest security patches 
• Use antivirus and anti-malware software on all devices 
• Be cautious when using public Wi-Fi networks—consider using a VPN 
• Adjust privacy settings on social media accounts to limit the personal information you share 
• Be wary of phishing attempts through email, text, or social media 

Consider a Credit Freeze

One of the most effective ways to prevent new account fraud is to place a security freeze on your credit reports. According to the FTC, a credit freeze restricts access to your credit report, making it more difficult for identity thieves to open accounts in your name [7]. You’ll need to contact each of the three major credit bureaus—Equifax, Experian, and TransUnion—separately to place a freeze.

Use Identity Theft Protection Services

While no service can completely prevent identity theft, identity theft protection services can help monitor your personal information and alert you to potential issues. These services often include:

• Credit monitoring across all three bureaus 
• Dark web monitoring for your personal information 
• Identity recovery services 
• Identity theft insurance 

What to Do If You Become a Victim

If you notice unusual activity on one of your accounts or if you do not recognize a new account on your credit report, then you may be a victim of identity theft. If you suspect you’re a victim of identity theft: 

1. Act quickly: Report the theft to the FTC at IdentityTheft.gov and change online passwords for impacted account 
2. Place a fraud alert on your credit reports 
3. Contact companies where fraud occurred and notify them of the fraudulent reports 
4. File a report with local police and provide a copy to each company where fraud occurred 
5. Follow the FTC’s personalized recovery plan provided through IdentityTheft.gov 

Everyone experiences financials challenges, including identity theft. If you are facing a financial challenge and need some extra money, Courtesy Finance’s local branch employees are here to help you figure it out. We work to understand your situation and look beyond your credit score. Our personal installment loans have clear terms, fixed rates, and fixed monthly payments. Call or visit your local branch to discuss your options with a member of our team.