How to Protect Your Financial Information

Published

Data breaches hit an all-time high last year, which means the chance of getting your personal information stolen is rising, too.

How to Protect Your Financial Information

According to IBM’s annual global study, the average data breach costs companies $4.24 million. This is the highest it’s been in the 17-year history of IBM’s report.

This research and other studies like it always frame these breaches from the hacked company’s perspective. But what happens if you’re one of the customers whose data is exposed in a breach?

While there are fail-safes in place to insulate you from the financial consequences of fraud, it can take months (or even years) to erase it from your records. And until that happens, you might sport bad credit that interferes with how easily you can qualify for online loans and lines of credit.

A bad credit score may even stand in the way of a job, new apartment, or auto insurance. Like online direct lenders, an employer, landlord, or insurance company might check your credit to make decisions about your character.

With so much on the line, an ounce of prevention is worth a pound of cure when it comes to fraud. You’ll want to follow these tips to keep your financial information under wraps — whether you’re banking, borrowing money, or shopping online.

Don’t Share Your Information Often

Your personal information is confidential. Only legitimate retailers, online direct lenders, schools, and government entities should ever see this data. And they should only ever access this information under specific circumstances.

When it comes to borrowing money online, you’ll have to share your personal information in an online application form. However, you don’t need to send financial details to a lender before this stage. Only send this information after checking the lender in question has a robust security policy.

You can safely comparison shop for a personal loan or line of credit without ever having to reveal your personal information. In fact, you should browse these details while incognito.

Don’t Repeat Passwords

Reusing the same email and password combination for all your financial accounts makes you even more vulnerable to fraud. If a data breach affects one account, it exposes your login credentials for all your financial accounts.

By making a unique password for each account, you’ll isolate your exposure to that one account. This can make recovering from identity theft easier.

Better yet, create a unique passphrase for each account. A passphrase can be a sentence or a collection of unrelated words that contain special characters. This string of words is statistically harder to crack than traditional passwords.

Review Your Statements Carefully

Every year, you have three chances to check your credit report for free. Check out this link to find out how to do that.

When you do, read your credit report carefully, line by line. You’ll want to keep an eye out for any inaccuracies or errors. Even a small spelling error in your name could result in problems down the line.

Check each credit account under your name to ensure its payment history and balance owing match your records. You’ll also want to look out for any payday cash advances you don’t recognize in your file.

Some payday cash advance lenders will approve loans without checking credit. This makes them easy to get as a fraudster posing as you, so they’ll try these fast loans first.

If you see anything that looks suspicious in your file, reach out to the credit bureau that generates the report. You may also want to visit IdentityTheft.gov to learn about your next steps.

The Takeaway

Fraudsters target the biggest financial institutions because of all the information they have on their customers. While major corporations have a legal obligation to safeguard the data they collect from you, sometimes their protocols aren’t enough. A talented hacker can get past their defences.

That’s why you should do what you can to protect your information whenever you share it. Subtle changes to the way you browse online, manage passphrases, and review your accounts can reduce a data breach’s effects on your finances.

Photo of author

Lucy Bennett

Lucy Bennett is a Contributing Editor at iLounge. She has been writing about Apple and technology for over six years. Prior to joining iLounge, Lucy worked as a writer for several online publications.