How to protect your financial data

Data breaches have reached an all-time high over the past year, which means the likelihood of your personal information being stolen is also increasing.

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

This research and other similar studies always present these security breaches from the perspective of the company being hacked. But what if you’re one of the customers whose data is exposed in a breach?

While safeguards are in place to protect you from the financial consequences of a scam, it can take months (or even years) to erase it from your records. And until that happens, you may have bad credit that prevents you from qualifying for online loans and lines of credit.

Bad credit can even get in the way of a job, a new apartment, or auto insurance. As with direct online lenders, an employer, landlord, or insurance company can check your credit score to make decisions about your character.

With so much at stake, an ounce of prevention is worth a pound of cure when it comes to cheating. Follow these tips to keep your financial information private—whether you’re banking, borrowing money, or shopping online.

Do not give out your information often

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

When it comes to borrowing money online, you need to provide your personal information in an online application form. However, you do not need to send any financial details to a lender before this stage. Only send this information after verifying that the lender in question has a robust security policy in place.

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

Do not 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, your credentials for all of your financial accounts will be exposed.

By creating a unique password for each account, you isolate your exposure to that one account. This can facilitate recovery from identity theft.

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

Check your statements carefully

You have three opportunities each year to check your credit report for free. Check out this link to find out how to do it.

If you do, read your credit report carefully, line by line. Check for inaccuracies or errors. Even a small misspelling in your name can cause problems later.

Check each credit account under your name to make sure their payment history and balance owed match your records. You should also be on the lookout for payday cash advances that you don’t see on your file.

Some cash advance lenders will approve loans without a credit check. This makes them easy to get as a scammer posing as you, so try these quick loans first.

If you see anything suspicious in your file, contact the credit bureau that is preparing the report. You can also visit to learn more about your next steps.

take that away

Scammers target the largest financial institutions because they have all the information about their customers. While large companies are required by law to protect the data they collect, sometimes their logs fall short. A talented hacker can overcome their defenses.

That’s why you should do everything you can to protect your information whenever you share it. Subtle changes to how you browse online, manage passphrases, and verify your accounts can reduce the impact of a data breach on your finances.

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