Identity theft is the fastest growing crime in America, impacting more than 9 million people each year.

The more you know about this prevalent crime, the better prepared you will be to protect yourself. Identity theft can ruin your good credit.

Here's how it works:
Someone pulls together enough information about you to apply for a credit card in your name. Or maybe they come across your name and credit card number on a receipt you threw away. Then they go out and charge thousands of dollars worth of stuff on your credit cards and do not pay the bill. The delinquency goes on your credit report and it looks like you are the one who went on the spending spree. Most reputable credit card companies would not make you pay for bills you did not run up, but identity theft can still cost you – in time and aggravation if not actual dollars lost.

Identity thieves can get hold of your personal information in a variety of sneaky and illegal ways:

Your mail

They go through your mail and take your bank and credit card statements, pre-approved credit offers or tax information.

They complete a change of address form and re-route your mail to another location.

They call your credit card company and ask to change the mailing address on your accounts.
Then they run up the charges on your credit card. Because your bills are being sent to the new address, it may take some time before you realize what has happened.

Stealing your information

They steal your wallet or purse containing your personal identification and credit cards

They dumpster dive, rummaging through trash bins for your personal information such as unshredded credit card and loan applications.

They shoulder surf at ATM machines and phone booths in order to capture PIN numbers.

They use hand-held card readers called skimmers to steal your credit card data at a restaurant or store.
They send out phishing emails pretending to be a bank or online business and ask you to update your account information.

Buying your information from a third party

They buy your personal information from "inside" sources. For instance, an identity thief may pay a store employee for a copy of your credit application.

While pretending to be you, thieves

They use your name, date of birth and Social Security Number, to open a new credit card account. They use the credit card and don't pay the bills. Or, sometimes they make the minimum payment every month so that the activity can go on unnoticed for months.

They establish phone or wireless service in your name.

They open a checking account or apply for a job in your name.

They file for bankruptcy under your name to avoid paying the debts they've incurred as you.

Additional precautions to take

Do not carry extra credit cards, your Social Security card, birth certificate or passport with you unless needed.

When you order new checks, do not have them sent to your home. Pick them up at the bank instead. If stolen, your checks can be altered and cashed by identity thieves.

Only give out personal information over the phone if you initiated the call. Identity thieves may call, posing as banks or government agencies.

Shred your receipts, credit card offers, bank statements, returned checks and sensitive information before throwing it away.

Check with your employer, landlord and others who can access to your personal data to be sure that they are keeping your records safe.

Order your 3-in-1 Credit Report to make sure it is accurate and sign up for a credit monitoring service to be alerted to changes by email.

Protect your Social Security number with extra care. Don't have your Social Security number printed on your checks.

Follow your billing cycles closely. A missing credit card bill could mean an identity thief has changed your billing address.

File away a list of all your account numbers--with expiration dates and telephone numbers. If your wallet is stolen, you will be able to quickly alert your creditors.

When creating passwords or PIN numbers, use a random mix of letters and numbers. Do not use information that may be easily discovered by identity thieves

Here are ways to protect against identity theft:

Guard your personal information, especially your Social Security number and other common identifying information like your mother's maiden name.
Never lend your credit card to anyone.
Keep all credit card receipts and dispose of them properly.
Guard your trash and your mail. Identity thieves often steal "pre-approved" credit card letters from mailboxes. Tear these up and cut them into pieces. Also do this with any unsolicited credit cards you receive.
Don't give your credit card number to anyone over the phone or Internet unless you know whom you're dealing with.
Limit the number of credit cards you carry with you.
Keep your wallet or purse in a safe place at work.