How to protect your credit from fraud

Cybercriminals are always one step ahead of consumers and the rampant credit fraud they commit can impact your credit report for years, damaging your credit score and increasing the interest rate you receive for loans.

Consumers who have lower credit receive higher interest rates for auto, student and personal loans and even mortgages because they are a higher risk to lenders.

If you suspect credit fraud and want to view your credit history, view your credit score at Credible without negatively impacting it.

THIS IS HOW CREDIT MONITORING CAN HELP YOU BOOST YOUR CREDIT SCORE

Protecting your credit score from identity theft is important since this type of organized crime is often sneaky and the behavior can go undetected for several months.

Identify and credit card fraud is very common and is built into the business model of most financial institutions, said Michael Isbitski, technical evangelist at Salt Security, an API security provider.

"If a fraudster attempts or succeeds in compromising identity or credit card information, don’t fault yourself or get overwhelmed with guilt," he said. "At some point, every citizen and customer is targeted. Fraudsters are pervasive, persistent, cunning and often well-funded. They will use a large variety of attack methods to obtain and use the information for financial gain."

There are several ways consumers can protect their credit and credit card information from the dangers of fraud and identity theft.

WHY IS IT IMPORTANT TO HAVE GOOD CREDIT?

1. Avoid those robocalls from "credit card services" since they are all scams – hang up and ignore.

"You should never volunteer personal information or account data to a phone agent who calls you out of the blue," said Hitesh Sheth, CEO at Vectra, a provider of technology that applies artificial intelligence to detect and hunt for cyber attackers.

2.  Change your passwords regularly and don’t use the same password for multiple financial accounts, Sheth said.

3. Learn to recognize the fake phishing emails from banks, credit card companies or even credit scoring agencies. They are not hard to spot after a while - look for bad grammar and typos or hyperlinks that reveal weird, or unknown URLs when you mouse over the link, Sheth said.

"Coach the elderly in your circle to be skeptical of robocalls, cold calls and unexpected email attachments," he said.

4. Read your monthly credit card statements.

"It’s amazing how many people don’t," Sheth said. "Flag purchases you don’t recognize. Most banks make it easy nowadays to dispute a sketchy charge to your card."

5. Get a copy of your credit history annually, which is provided to you for free through the three credit bureaus: TransUnion, Experian and Equifax. Consistent credit monitoring could help you catch fraud and errors in a more timely manner.

"You may even find that some legitimately reported information is inaccurate and must be amended," Isbitski said.

You can improve your credit score through Credible’s partner product Experian Boost by choosing and verifying a positive payment history that you want to add to your credit file.

6. Sign up for text and email fraud alerts for each bank and credit card account so you are notified as new charges are made. Ideally, set thresholds, so you don’t create alert fatigue for yourself, he said.

"Fraudsters will often test the waters with small transactions of roughly $1 to see if stolen card information is valid and whether the bank’s fraud prevention systems catch it," Isbitski said.

HOW OFTEN DOES YOUR CREDIT SCORE CHANGE?

7. Enroll in multi-factor authentication at each bank and credit card company. This can be email or texts.

"These mechanisms provide some account login protection, making it more difficult for fraudsters to access or modify your bank information online," Isbitski said.

Make sure passwords are not your only security control, said Joseph Carson, chief security scientist at Thycotic, a provider of privileged access management solutions.

"One way criminals steal your identity is by taking over your accounts," Carson said. "Do not make it easy for them. Use strong access controls to protect your most important accounts using a password manager and multi-factor authentication."

8. Limit the number of cards used online to a single card – if there is a fraud issue, there is only one card to replace, said Brandon Hoffman, chief information security officer at Netenrich, a provider of IT, cloud and cybersecurity operations and services. The damage is reduced significantly, Carson said.

"Being a victim of card fraud is generally not a big deal thanks to many of the protection laws and processes implemented by card issuers and processors," he said. "However, identity fraud can quickly become a nightmare that can entangle a person for years to come."

Consumers can get credit for phone, utility and streaming bills they’ve been paying all along via Credible’s partner Experian.

Credit card fraud occurs often and nearly everyone becomes a victim at some point. Don’t be afraid to ask for tips and help from friends and experts, Carson said.

Have a finance-related question, but don't know who to ask? Email The Credible Money Expert at moneyexpert@credible.com and your question might be answered by Credible in our Money Expert column.