Managing Your Online ID Could Help Personal Finances

Manage Your CreditConsumers know that good debt management skills and a strong credit score can go a long way when applying for that next big bank loan, promotion, or job. However, a new report suggests that consumers' online identities could pose a barrier to these goals if proper precautions aren't taken against Internet threats.

Social networking sites, such as Facebook, MySpace, and Twitter, are growing increasingly popular, making it even more important that consumers monitor the information they make available online. Proper financial planning requires more than just debt and credit monitoring –– it requires an awareness on how these new tools can impact finances.

"Just because you spent $500 at Amazon doesn't mean your loan will be denied, but some online activity could have a make–or–break element," Jacob Jegher, senior analyst at Celent, a financial services research firm, told CNN. "Tweeting about losing your job might be filtered out of all the social networking noise."

In a survey of employers, 75 percent said they've used social media when evaluating a job applicant, and 70 percent say they rejected or failed to promote an employee based on their Internet presence, according to the report. Consumers can increase the safety of their personal information by adjusting privacy settings on social networking sites. Most social networking sites give users the option to block certain users and control how much those with access can see.

Embarrassing posts aren't the only threats social networking sites pose to finances.

The report suggests consumers should try to limit personal data. Even the simplest fact can cause serious harm when placed in the wrong hands. Birth dates, favorite movies, and mother's maiden names are all simple facts that financial institutions use to help verify consumer identity, but they're also commonly found on online profiles.

These may seem like innocent details, but in the wrong hands, they can provide answers to security questions that will allow intruders to penetrate through layers of financial protection.

Consumers should exercise care when entering vital financial information into unsecured sites or in response to suspicious e–mails, because a misplaced credit card PIN or Social Security number could lead to identity theft.

"Identity theft and credit fraud are the fastest–growing crimes in America," says Samuel Ambrose of National Credit Report. "Paying attention to cybersecurity is a smart step in securing not only one's own safety, but preventing the headaches of dealing with an identity theft situation."

Identity theft can cause big damage to credit scores, especially when it passes unnoticed, which can cause years of hard financial work to evaporate overnight.

The number of victims affected by identity theft in the U.S. topped 11 million in 2009, a 12.5 percent increase over the previous year's figures, according to a recent report by Javelin Strategy and Research. The report estimates that over this span, thieves stole more than $54 billion dollars.

The survey suggests simple protective steps can ensure the safety of your finances. Of the survey respondents, 75 percent of the victims of identity theft had experienced a stolen or misused credit card.

Identity thieves can use this information to open new accounts and make purchases with credit cards, causing missed payments and damaged credit scores. The road to recovery from identity theft can also be long for consumers, requiring hours of paperwork and costly procedures.

The problem has become so pervasive that President Barack Obama labeled October 2010 National Cybersecurity Awareness Month to raise consumer awareness of risks on the Internet. Throughout the month, organizations will provide programs and fact sheets to teach consumers how to properly secure their private information and protect their families from various types of online fraud.


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