2015 has been an eventful year in the world of credit. With a number of big data breaches, it's more important than ever to protect your personal information and be vigilant when it comes to your credit reports. While some hard lessons were learned about credit security, there were some useful takeaways too, as more Americans are getting their credit back on track.
1. Mind Your Credit Accounts
Keeping an eye on your wallet is one thing, but that shouldn't be your only concern when it comes to your credit card. Company data breaches can also be a big problem. For example, in 2015, someone hacked into the Hilton database and nabbed customer credit card information. If you used your credit card in a Hilton restaurant or gift shop at any time since 2014, your information may have been compromised.
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Lesson: Review your credit card statements at least once a month for unauthorized purchases. Have your card provider send you email alerts for out-of-country charges and purchases over $100. If a company you buy from is hacked, notify your credit card company immediately.
2. Protect Your Email
In October 2015, the world learned that CIA Director John Brennan's email was hacked — apparently, by teenagers. If the head of the CIA isn't immune to having his password hacked, it's a major lesson for the rest of us to be extra attentive to potential credit card problems. Having your email account compromised can expose you to a host of serious problems. For example, if someone goes to your banking website and clicks the "Forgot Password" button, he could have access to your bank account within seconds, and lock you out.
Lesson: Use random letters and numbers for your passwords instead of words or names. The longer the password is, the harder it is to hack, so use 12 or 16 characters instead of the minimum of eight.
3. Strengthen Your Passwords
Ashley Madison wasn't the only company that had its customers' login credentials compromised in 2015. The list included health-care providers, universities and hundreds of banks. While passwords are usually encrypted, they are still at risk of being compromised. If you use the same password for all of your accounts, you make it much easier for hackers to gain access to your personal information, leaving you exposed to theft and identity fraud.
Lesson: Use a different password for every service you sign into. If you find out a service you use has been hacked, change your password immediately.
4. Safeguard Your Social
As it turns out, not even the federal government is immune to data hackers. In June 2015, two separate massive computer data breaches compromised the personal information of roughly 21.5 million current and former federal employees and contractors, when the United States Office of Personnel Management (OPM) was the victim of a cyber attack8. In this case, the data included names, Social Security numbers and even 5.6 million fingerprints collected for background investigation databases.
With just a name and a social security number, criminals can apply for jobs and file fraudulent tax returns in your name, as well as apply for credit cards. As a result, the government provided victims with three years of credit monitoring, identity monitoring, identity theft insurance and identity restoration service.
Lesson: Review your free annual credit report every year for suspicious activity. If you find inquiries or transactions from companies you don't recognize, contact one of the 3 major credit bureaus to place a fraud alert on your report.
5. You Can Start Fresh
Not all the news in 2015 was disheartening. It was a very good year for millions of Americans, if the March 2015 report from the U.S. Federal Courts is any indication. Personal bankruptcy filings declined this year for the fifth straight year, by a margin of 12 percent compared to 2014. If you have poor credit, review your free annual credit report and look for ways to begin improving it.
Lesson: It's never too late to start building your credit. If you don't qualify for a standard credit card, try applying for a secured credit card. Because you’re asked to put a deposit down on the card beforehand, secured credit cards are much easier to get. By making regular payments, the card can help you rebuild your credit.