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Identity theft affects people differently, but everyone who is a victim will be impacted in some way -- your retirement is no exception. To protect yourself from these issues, you need to learn some basic steps on how to prevent identity theft. Reviewing your credit report on a regular basis is one of those simple steps that could save your credit score and protect your savings account, which may allow you to retire on-time. The Retirement Effect Your credit score is how lenders and creditors will measure your credit worthiness for the rest of your life. If you are a victim of identity theft, your credit score could be damaged, and this might have a negative impact on your retirement plans. For instance, if you want to move to a new area when you retire, you may need to sell your home and purchase property in your desired location. Regardless of whether you purchase a house or a condominium in a retirement village, you will need a good credit score if you are applying for a loan. Your credit score will not only decide if you get approved for the loan; it may also dictate the interest rate on the loan. If you have plans to travel once you retire, these plans might also be impacted by identity theft. You may need to purchase a new vehicle so you and your partner can travel around the country. With a low credit score, banks will either deny your application, or approve you with a high interest rate. You may also be required to place a large down-payment before you can drive your new car off the lot. The effect of identity theft does not stop there, it continues on when you apply for car insurance. Your premiums may be determined by your credit score and driving record. High premiums may not be in your budget, and you might find your retirement plans unraveling -- all because a thief stole your identity, and destroyed your credit score. How to Handle the Theft You may be thinking: stolen identity, what to do? There are actions you can take to clear up your credit report, and help get your credit score back to its appropriate rating. You will need to contact all three credit bureaus (Experian, Equifax, and TransUnion) so each agency can place a fraud alert on your credit file. After you contact the credit bureaus, you will need to contact the police and report the issue. Make sure you obtain a copy of the police report. You will then need to contact the Federal Trade Commission and file an Identity Theft Affidavit. This affidavit will alert various law enforcement agencies around the world that the crime was committed, and put an alert on your credit file. It is important that you also contact your creditors to discuss the issue, and find out how you can dispute the charges that you did not make or authorize. Preventing Identity Theft You need to keep all of your personal and financial documents in a safe and secure location. It is not a good idea to have all of this information lying out in areas where houseguests or thieves have easy access. You should also limit the amount of information you share online. Monitor your credit on a regular basis. If you do not have the time to monitor your credit, hire a credit monitoring service to do it for you. The service will alert you any time an inquiry is made, and they will notify you of suspicious activity on your account. This is how to prevent identity theft. Spreading your retirement savings out between different banking institutions is also how to prevent identity theft from affecting your retirement. Make sure you ask the bank what type of protection features they offer, just in case someone tries to steal money from your account. Do not allow thieves to affect your credit and prevent you from living out your retirement as planned. Make sure you monitor your credit report for errors and fraudulent activity. If you are a victim of stolen identity, there are actions that you need to take immediately. You do not want to work hard all of your life, only to have a thief reap the benefits and ruin your retirement plans! Amy Johnson is an active blogger who is fond of writing articles on identity theft and advising people how to identify the theft signs and prevent identity theft. Follow her on Twitter to know more on how identity theft can spoil your credit score during retirement.
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