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Protecting your credit is essential in today’s online landscape. Your credit and financial profiles are more than just numbers, especially as our financial landscape embraces all things digital.
Credit card fraud is the most common type of identity theft in 2025. In fact, there were 748,555 cases of identity theft reported in the first half of 2025, according to Motley Fool. This is at least 196,000 more cases than in 2024.
Credit fraud prevention is not a one-time fix, either. As we move into Holiday planning season, be sure your money is safe from scammers and criminals. Here are some actionable items to incorporate into your financial protection steps.
Experts agree that credit fraud prevention starts with awareness. Monitoring your accounts and your credit report can help you catch suspicious activity early.
Every person is entitled to one free credit report per year from the three major credit bureaus, according to federal law. The Consumer Finance Bureau recommends requesting one report every four months to monitor your credit throughout the year and create an informed baseline about your data.
When you’re looking over your reports, look out for:
If you spot anything suspicious, be sure to contact the appropriate credit bureau immediately. Catching a discrepancy early will limit the damage and could help restore your credit faster.
Data breaches can expose your personal information to hackers. When you receive a data breach announcement, this is a signal to secure your accounts and change your passwords.
The Office for Civil Rights, a part of the United States Department of Health and Human Services has a breach portal listed online. Visitors can look at a list of data breaches that have been reported over a 24-month period and are under investigation by the Office for Civil Rights.
Look out for data breach announcements from financial institutions, major retailers, healthcare providers, and government agencies.
A fraud alert requires creditors to take additional identity verification steps before issuing new credit in your name. It serves as a warning that your personal information may have been compromised, making it harder for someone to open unauthorized accounts in your name. These alerts don’t affect your credit score and are free of charge.
You can set up a fraud alert by contacting any of the three major credit bureaus. When one bureau is notified of a fraud alert, they are required to notify the other two. These alerts last for one year and can be annually renewed. If you’ve been a victim of identity theft, you may qualify for an extended alert, which can last up to 7 years.
Your financial accounts are only as safe as your strongest password. Experts recommend creating a unique password for each account that contains a mix of upper and lowercase letters, numbers, and symbols.
Two-factor authentication requires a user to provide two forms of identification to verify their identity. Even if your password is compromised, a hacker would still need the second verification code, which is usually sent to your phone. Without the second form of authentication, your account remains locked.
Phishing scams are designed to trick you into giving away your personal and financial information. You should always be suspicious of unsolicited requests for personal information. Instead of clicking unknown links or calling back the number in a suspicious message, use a verified contact method or visit the company’s website directly. Remember, no legitimate organization will ever ask for your Social Security number or login credentials via text message or email.
Many financial criminals test stolen accounts with small charges to see if they go through, usually only $1 or $2. Especially as you participate in Holiday shopping, check your balances often. If you notice any unfamiliar charges, report them to the bank or credit issuer right away.
Many financial institutions offer:
When you receive credit soliciting or medical bills in the mail, dumpster diver criminals can dig through your trash to find information about you. Shredding sensitive documents before you throw them away is a way of physically protecting your credit. Experts recommend using a cross-cut shredder instead of a strip-cut because the cross-cut makes it harder to piece together information.
You should shred any paper containing your personal information instead of tossing them with the normal trash or recycling. This can include credit card offers, bank statements, tax forms, and medical bills.
If your data has been compromised, don’t panic. First, change your account passwords immediately. If your password was leaked, changing it ensures hackers can’t log back in to do more damage.
Next, set up a fraud alert or a credit freeze. A credit freeze prevents others from accessing your credit report. Along with monitoring your credit reports and bank statements, you’ll have a more watchful eye on your information.
Finally, be sure to report any suspicious activity to the Federal Trade Commission. The Federal Trade Commission will take active steps to shut down the scammers and hold them accountable.
There is no fool-proof way to guarantee you’ll never be a victim of identity theft or credit fraud. Staying vigilant and taking proactive approaches can dramatically reduce your risk and allow for a faster bounce back to normalcy, should something go wrong.
Working with one of our Licensed Loan Originators helps you achieve your home financing goals. Although we are not credit repair specialists, we offer our borrowers credit and debt management assistance through a Fannie Mae approved platform. Ready to work with a mortgage lender that values your privacy? Contact us to start a pre-approval!
Homestead Funding offers exceptional customer service and a convenient mortgage process. Whatever your financing needs, our goal is to exceed your expectations.
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