We've all heard the horror stories about identity theft, but is it really likely to happen to you? According to the non-profit Identity Theft Resource Center, everyone has a chance of becoming a victim. You can greatly decrease the risks by following a few simple tactics to make yourself virtually identity theft proof.

It's just common sense that you shouldn't carry around your social security card or bank PIN number in your wallet, and that you should lock up or shred any financially sensitive documents like credit card or bank statements. Yet, criminals are still able to gain access to these key pieces of personal identifying information and use them for their own illegal gain. Contrary to popular belief, the majority of identity theft does not start online. It comes from stolen mail, dumpster diving, and lost or stolen wallets.

Armed with your personal information (your name, address, birth date, etc.), the thief can commit check or credit card fraud, and even obtain a loan in your name. When the financial institution checks the personal information against the data at a national credit bureau, it sees no problem. The data the thief provided matches the official records.

Here's how you can defend against basic identity theft, where the criminal steals your identity and then uses it to open a new credit account for their personal gain. Place an "Initial Fraud Alert" on all three of your credit reports (TransUnion, Equifax, and Experian). This can only be done if you feel your personal information has been compromised. The Initial Fraud Alert requires that lending institutions call you at the phone number listed on your credit report to confirm any new transactions. That should stop a thief from getting money in your name, but unfortunately the Initial Fraud Alert only lasts for 90 days.

Another form of identity theft is credit hijacking. That is when the criminal steals your identity in order to use your existing credit accounts. In order to protect against credit hijacking, many online merchants now use "Address Verification Service." This security feature only approves credit card transactions for merchandise that is shipped to the same address as your credit card billing address. So far, so good. Until the thief calls up the bank, posing as you, and changes your billing address. An excellent defense against this scam is to establish a personal security code with all your bank accounts and credit cards. This code is a unique group of numbers and letters that you create, and then give to the financial institutions. Now when the thief tries to hijack your credit, the bank will ask for the personal security code, and he'll be stopped cold. Of course, it's critical that you keep this code truly secure.

In summary, if you establish an Initial Fraud Alert and a personal security code, you'll be protected against the most common forms of identity theft. If a thief tries to open a new credit account in your name, the financial institution will call you for approval. And if the criminal tries to hijack your credit by changing your mailing address, the financial institution will ask for your personal security code. Game over.

Let’s face it–you need a credit card in order to get along today.  Have you ever tried to make a hotel reservation or rent a car without one?  But if you are one of the growing number of people who have run into credit problems, you know that getting a credit card can be very difficult.  In this article, we’ll tell you about secured credit cards, and how they can help improve your credit rating.

Secured credit cards typically require a cash deposit, usually between $300 and $500.  For example, if you put $500 in your secured credit card account, you can charge up to $500.  I know what you’re saying-why give the cash to some financial institution to hold for you until you buy something.  Why not just spend cash?  The answer is that spending cash doesn’t raise your credit limit, or help your credit rating. 

For people who have never had credit or have a poor credit history, a secured credit card may be the only way to establish, or re-establish good credit.Not all credit card companies and banks offer a secured credit card.  If you belong to a credit union, there’s a better chance you can obtain one from them.  But be sure to ask about fees and other charges.  Most secured credit cards charge an annual fee, and some fees can be quite high.  Some even charge an application fee.  Be sure to read the fine print on the agreement before signing. 

Some people have lost their entire limit on the card to fees before they ever used the card.  Shop around for the best deal before getting a secured credit card.  Some have low fees, and will help you get back to financial health.  Others take advantage of their clients with high fees and bad service. Of course, the primary reason for having a secured credit card is not to buy a plane ticket to Vegas, but to build a good credit history. 

It is critical that the issuer of your secured credit card report to the three major credit bureaus.  Each piece of good credit news that is added to your report will mean an eventual rise in your credit rating.  You’ll know that you’ve been successful when the offers for unsecured cards start arriving in the mail!Just having the secured credit card is not enough.  You have to use it. 

Experts recommend that you buy necessary items and goods using the card every month, and pay off the entire balance.  This will result in better reports being filed to the credit bureaus.  And although you have to maintain the deposit in the account, your card issuer should pay interest on it (although probably at a very low rate).

Secured credit cards are a good choice–and sometimes the only option–for people who can’t get a regular credit card.  Maybe they have declared bankruptcy, have had a string of late payments, or a home foreclosure.  Secured cards are also designed for people who rebuilding after a major life event, such as a divorce, job loss or serious illness. 

In addition, some issuers only give secured cards to people who are new to credit — not those who have already had one crack and blown it.