In the December 2004 issue of Money magazine (page 45) there is an article about a woman’s experience of having her identity stolen. Like other stories I’ve heard, it chronicles the disastrous consequences, then explains that the perpetrator went free because there were no witnesses who actually saw the suspect filling out credit applications. That sounds sickeningly foolish and should be changed, but I’d just as soon avoid the whole experience to begin with. The article had some valuable suggestions for doing just that.

First off, don’t use your mother’s maiden name as a prompt if you forget your password. It’s too easy for an identity thief to figure out. Guard your social security number because once they get that, the doors of information are open up and they can get to a lot more. Other ways to protect yourself are to buy a shredder and shred all personal mail, remove your name from the phone book, watch your mail for bills that don’t arrive on time and to vary your passwords.

In a nutshell, be as vigilant as possible. The woman in the article got a letter very early on from Capital One asking if she had requested a credit application. She disregarded it thinking it was a mistake, but if she had investigated that one request, the majority of the theft might have been avoided.

It’s wise to regularly check your credit report for anything out of the ordinary so you can catch any fraudulent attempts as early as possible. You can get a 3-bureau report directly from credit scorer Fair Isaac for $38.85, and their Identity Theft Security service looks useful as well. However, before you spend any money you should be aware that according to the article, between now and September 2005 everyone will have access to a free, yearly credit report. Even if you’re not concerned about identity theft, it’s still a good idea to know your credit score, so that’s good news for everyone.

Eloan will tell you your current FICO score for free, and also offers a credit report from one bureau from for $34.95.

I was a member of Privista (which seems to have gone the way of the dodo) before you had to pay for their service. It was great while it lasted because it would e-mail me if anything on my credit report exceeded limits I had set. For instance, I could have them alert me if my credit card had a charge on it that was more than 50% of the total credit limit. I got used to being able to check my credit report and score regularly, but I have since learned that they only used Equifax, one of the three national credit reporting bureaus, instead of all three. From what I’ve seen, the little guy is Equifax and the other two, TransUnion and Experian are the big boys and have lots more information. If you get a report, make sure you get one that shows all three, and be forewarned that not all sites will have the same privacy safeguards in place as MyFico and the three agencies.

Oh and one last word of advice. Stay away from ClearCredit at all costs.