How to Prevent Identity Theft in 2026: 7 Free Steps

Identity theft poses a serious threat to your financial security. In 2024, Americans reported losing over $12.5 billion to fraud, with 1.1 million identity theft reports and 2.6 million fraud reports filed with the Federal Trade Commission (FTC).

When fraudsters steal your identity through your bank account information, card numbers, or Social Security Number, it can take only a few days for them to wreak financial havoc.

The good news? Keeping your identity safe doesn’t require you to pay for an expensive fraud protection subscription or to hire a private eye. You can protect your data for free in under an hour by freezing your credit and putting other safeguards in place. Here’s how you can secure your identity and financial information in seven steps, what to look out for, and how you can catch financial fraud before it can begin.

#What does identity theft look like?

Identity theft isn’t a masked criminal sneaking through your wallet. It’s someone sitting behind a computer thousands of miles away, using a password-cracking tool on your bank account. It’s a voice on the phone claiming to be the Social Security Administration. It’s the email pretending to be from your bank, asking you to reset your password.

With new technology, identity thieves and fraudsters everything from voice-cloning AI on phone calls to phishing schemes tailored to your digital habits. Knowing what to look out for and recognizing the warning signs are the first steps to keeping your information and money safe.

#What do identity thieves steal?

Identity theft doesn’t just involve stealing your credit card. Thieves can use a patchwork of information to commit fraud, using information such as:

• Your full legal name and former names, such as your maiden name
• Your current and former addresses
• Your date of birth
• Tax Identification Number/Social Security Number
• Bank account numbers and PINs
• Credit and debit card numbers
• Login information like emails, usernames, and passwords
• Medical insurance numbers and account information
• Driver’s license and passport numbers
• Security question information like the school you attended, where you were born, or pets’ names
• Personal information like the names of your children and grandchildren, friends, family, your hobbies, and your old schools

#What are the types of identity theft?

Different types of identity theft target different aspects of your personal and financial information. In a nutshell:

• Tax identity theft involves your tax identifier number or Social Security Number being stolen and used for fraudulent purposes.
• Card fraud involves your credit or debit card number being used for fraudulent transactions.
• Account takeover involves your password and login information being stolen to gain access to your accounts.
• Synthetic identity involves fraudsters cobbling together a fake credit profile using a mixture of real details (like an SSN) and fake information.
• New account fraud involves fraudsters using a synthetic identity or account details to open a new account.
• Medical fraud involves your medical identity or insurance information being used to obtain health care or drugs.
• Child fraud involves an adult using a child’s Social Security Number or personal information to open a fraudulent account.
• Senior fraud involves fraudsters manipulating or stealing information from seniors to gain access to senior benefits, such as pensions, or to change estate details.

#How Does Identity Fraud Start?

As mentioned above, identity theft can take many forms, many of which steal your information without you even knowing.

• Data breaches are when information like your login, password, and personal information is leaked and stolen by or sold to fraudsters.
• Phishing is when fraudsters target you with fake emails from your bank or other trusted source, prompting you to enter your login or personal information, or infecting your device with malware.
• Smishing is phishing over text/SMS.
• Malware like ransomware, keyloggers, or Remote Access Trojans gain entry to your devices through infected files or links, stealing information from your phone and computer.
• Password reuse/breaking is when thieves either use your old passwords to log into other accounts, or brute-force a login using common password combinations.
• Unsecured public wifi leaves the information you access online vulnerable to hackers.
• Job post scams involve scammers posting fake employment positions, and then contacting applicants requesting pictures of their ID and bank account information as if they are a real employer.
• SIM swapping involves contacting your phone carrier and claiming to be you, requesting a SIM swap so they gain access to your phone number, texts, and calls.
• Phone scams involve fraudsters calling you claiming to be the police, the government, or a trusted company to convince you to send money or sensitive information to them.
• Card skimming involves scammers placing a skimmer over a card reader, often at gas stations or ATMs. When you swipe or insert your card, the skimmer takes your card information.
• Mail fraud and theft is when fraudsters dig through your mailbox or garbage to find mail with sensitive personal information.
• Physical theft is when someone physically steals identifying information from your home or wallet, such as your Social Security card or passport.
• Caregiver fraud involves a caregiver stealing information they are trusted with, such as a client’s bank account number.

None of these access points require an elaborate setup for thieves to steal your identity. An email in your inbox, an angry phone call from someone at the IRS, airport wifi, a reused password, or a card reader at a gas station are all avenues for bad actors to steal your information.

On the upside, there are simple ways to protect yourself from fraud.

#How Can I Prevent Identity Theft?

Protecting yourself against identity theft means protecting your most vulnerable entry points and guarding your credit. Here’s how to keep your sensitive data safe.

#Freeze your credit at all three bureaus

Freezing your credit prevents new applications from being filed using your credit profile, including for loans and new credit cards. It’s free, takes only a few minutes, and can be done online, by phone, or by mail at all three credit bureaus. While your credit score will still be impacted by your history (including late payments, card utilization, and so on), freezing your credit doesn’t damage your score or prevent it from increasing.

If you need to file a new credit or loan application, you can thaw your credit temporarily or permanently through each bureau, which also only takes a few minutes.

#Opt into an IRS ID Theft PIN

The IRS offers an ID Theft PIN as a way to secure your tax returns if your Social Security Number or tax ID number is stolen. It’s a six-digit PIN that is free to request, with a new PIN generated every year.

#Turn on two-factor authentication, starting with your email

Two-factor authentication (2FA) is when you use a second way to verify your identity on login, typically combining a password with an authenticator app, your email, your phone number, or biometric information like a fingerprint. Using 2FA prevents remote attacks where hackers steal or crack your password and use it to log into your account.

This is especially important for your email accounts, since companies will often send password reset links by email, making your inbox a “master key” for account access. The same goes for your phone carrier; by adding a PIN or email authentication to your login, you can prevent SIM swapping.

#Get a password manager and stop reusing passwords

Password reuse, or using weak passwords (like Password123, admin, or qwertyuiop) creates a critical weak point for thieves to exploit. Often, when hackers gain access to one account, they’ll run the same email/password combo on other accounts in your profile to try to brute-force entry. Instead, create unique, difficult-to-guess passwords for each account, and store them in a safe, encrypted password manager.

Many browsers offer embedded password managers for free, and if you have a VPN or antivirus service, it may come bundled with your subscription. Never store passwords in a plaintext file (like a .txt, .docx, or .xlsx file) or in easily-accessed places like a notes or messenger app. Encryption is key, since it shields your passwords from hackers by scrambling the text.

#Learn to catch scams from the start

Preventing scammers from accessing your devices and information goes a long way. You can lower the risk of your data being stolen if you:

• Avoid using public wifi, or use a VPN when accessing it.
• Keep your personal documents secured in a lockbox or safe at home.
• Avoid clicking on links, calling phone numbers, or logging in from email or SMS messages. Instead, go to your bank’s website directly.
• Never download files from emails or messages you don’t know the origin of.
• Tap your card instead of swiping or inserting the chip, as skimmers are unable to access tap information.
• Be suspicious of urgent or threatening phone calls. Contact your bank or government agency directly if someone calls you claiming to be them.
• Shred documents with sensitive information before throwing them away.
• Avoid posting information on social media that hackers can use to impersonate you, like the location of your childhood home, the names of your children, former employers, or birth dates.
• Install a good firewall and antivirus service on your computer and phone.
• Get a robust spam/phishing filter for your email and messaging service.
• Enable card protection by requesting card providers to require verification for large or unusual transactions.
• Never send sensitive information online without verifying the recipient. Verify that companies listing job postings are legit, and confirm directly with the company before sending your ID or bank information.

#Freeze, Lock, or Fraud Alert? A Straight Comparison

There are a few ways to secure your credit profile and personal information, each with different levels of security, ease, and cost points. Here’s a quick breakdown of what different methods have to offer.

Freezing Credit

Locking Credit

Fraud Alert

Cost

Free

Ranges from $0 to $25 per month

Free

What it does

Freezes your credit to prevent new applications

Allows you to freeze and unfreeze credit applications through an app or site more quickly than a standard freeze

Requires credit bureaus to verify your identity with new credit applications

Duration

Perpetual, unless thawed

Month-to-month or annual, depending on subscription

One year standard; seven years if you’ve filed a police report

Set up where

Equifax, Experian, and TransUnion

Equifax, Experian, and TransUnion

Equifax, Experian, or TransUnion (if you set up Fraud Alert on one, they must inform the others)

Best for

Long-term credit protection

Quick locks and unlocks when applying for new credit

Extended protection after an identity theft or data breach event

#Is Paid Identity Theft Protection Worth It?

Some credit services will offer paid identity theft protection. While there are free versions of this available, paid versions typically offer more robust protections and additional monitoring services, including:

• Dark web monitoring
• Credit monitoring
• ID theft insurance
• Data recovery
• Password management

While these services can be useful, many of these services can be covered by setting up a credit freeze and free fraud alerts through the credit bureaus, as well as managing your password security and taking steps to secure your data and watch for scams.

That isn’t to say you shouldn’t consider this type of service; in fact, it can be useful if you want to be extra-vigilant about your accounts, especially if:

• You have been a previous victim of identity theft
• You are managing someone else’s account for them, such as an elder or a child
• You want extra help with managing your data security

#What Are The Warnings Signs of Identity Theft?

Identity theft can be easy to miss. Here are the red flags to look out for, where they come from, and what you can do about them.

Red flag

What it means

What to do

Unfamiliar small charges on your card or bank account

Fraudsters are “testing” your account to see if they can use it

Freeze your card through your bank or provider

Your phone number stops working

You’ve been SIM swapped

Contact your phone carrier to freeze your account

Sudden changes in your credit score

Unauthorized credit applications for a new card or loan

Pull your credit report, freeze your credit, and file a report at IdentityTheft.gov

Calls from debt collectors for loans you did not apply for

Someone has taken out a loan in your name

Freeze your credit and file a report at IdentityTheft.gov

Email or SMS authentication or password reset requests you did not send

Fraudsters are attempting to gain login access

Do not click any reset requests or links. Enable 2FA authentication on your email and reset passwords as needed.

Missing Social Security or benefit payments

Someone is using your identity to impersonate you for benefit payments

Contact the Social Security Administration directly or call the hotline at 1-800-269-0271

Your computer slows down or starts getting random popups

Your computer has been infected with malware

Disconnect from the internet and either run a malware scan or contact an IT professional

Missing mail or dug-through trash

Fraudsters are stealing or forwarding your mail to another address

File a report with the US Postal Inspection Service

Rejected e-filed tax return that you don’t recall sending

Tax identity fraud used to file a return in your name

File IRS form 14039 and request an IRS PIN

Estimated Cost of Benefits or bill for a medical service you never received

Insurance or medical ID fraud

Contact your insurance company’s fraud department and file a report at IdentityTheft.gov

#What Should I Do If My Identity Is Stolen?

If you suspect that your identity has been stolen, move quickly. Every moment counts, and the sooner you act, the more damage you can prevent.

1. #File a report on IdentityTheft.gov

Filing an online report with the Federal Trade Commission only takes a few minutes, and immediately generates a personalized recovery plan based on the type of fraud. It also creates a record for law enforcement to work with, which can help when you need to shut down fraudulent accounts, clear your credit report, and discharge fraudulent loans.

1. #Freeze your credit

Freezing your credit takes less than 30 minutes and immediately blocks any further attempts to apply for credit.

1. #Change your passwords and authentication methods

This is essential if your account credentials or SIM have been compromised. First, make sure that your “master key” accounts, like your email and phone number, are secured. Then enable 2FA and change your passwords as needed.

1. #Contact affected institutions

Reach out to any organizations you suspect have been compromised and request that your accounts be checked and locked against fraud. Many banks and card providers will have a fraud hotline, which you can usually find on their website or your card. Make sure that you contact organizations directly with a verified phone number or email. Often, scammers will attempt to contact you and claim to be your bank to further compromise your account.

1. #File a police report

If you haven’t done so already, file a report with your local police’s fraud department. This will help you create a paper trail and get you in contact with an investigator. As well, having a police report on file is often a requirement for identity theft insurance and for helping close fraudulent accounts and debts.

1. #Request new ID as needed

If your license, Social Security Number, or passport has been stolen, request a replacement from the appropriate agency. This will void the previous ID and prevent it from being used for fraudulent purposes.

1. #Document everything

Leaving a paper trail of documented theft and identity abuse is essential in building a case for yourself, especially when requesting new ID, closing fraudulent cards and accounts, repairing your credit score, and having fraudulent debt written off by lenders.

#Is It Safe to Connect Your Accounts to a Money App?

At first glance, money apps that connect and display information like your bank account transactions, card balances, and savings accounts might seem ripe for fraud. However, if a money app is keeping your info secure the right way, then your data is safer than you think.

Money and budgeting apps that track your transactions use aggregator services like Plaid to gather information from your connected account. The aggregator will send an authentication request to your financial institution of choice, and then have you log in to your institution’s site to verify the request.

From there, your bank or card service will send strictly limited data to the app, such as transactions and account balances.

For budgeting and financial management apps that don’t have bill pay enabled, the data is read-only, which means that any edits made to the data on the app won’t affect the data on your bank or card account. Think of it like downloading your transactions in a spreadsheet; while you can copy, edit, or delete transactions on the sheet, it won’t affect the transactions your bank lists.

As such, a secured money app shouldn’t be able to send information to your bank or card account beyond information requests, and shouldn’t require you to store or use your bank or card’s login information on the app directly.

#Five questions to ask any app before connecting

When considering a money app, ask yourself these questions before you download.

1. What is this company’s track record?

Look at user reviews and the history of the developer. Newer apps, companies with previous data breach issues, or platforms with multiple user complaints over security and privacy should be under more scrutiny.

1. How does the app secure my data?

A good app will explain how it secures your data and login information. As a baseline, financial apps should:

• Use 2FA for login information
• Encrypt your data when communicating with other apps and sites with bank-level encryption (such as AES-256 or TLS/SSL)
• Connect to financial institutions using secure third-party apps like Plaid, instead of having you log in directly
• Have their security independently audited, such as by SOC 2 Type II reports
• Have a way to directly contact the security department in case of a breach or account compromise
• Have a way to easily and permanently delete your account and data
• Continuously update the app to ensure security and compliance

1. Is this app on the official Apple App Store or Google Play Store?

Apps on Apple and Google Play are required to follow certain security standards, especially if they handle financial information.

1. How does this app make money?

Free apps often come with hidden costs. To cover platform costs, data aggregation fees, and development, many apps will rely on embedded ads, or will sell some of your information such as your credit score or income to affiliates so they can send you product offers.

Subscription-based apps, however, are often able to run on user fees alone, leaving your data less at risk.

1. If my data is leaked, what is at risk?

While it’s not a pleasant thought, consider what is at risk if the app in question undergoes a data breach. More secure apps will use read-only information from your banks and cards, meaning that while your transactions and balances will be leaked, more sensitive data such as account numbers and login information won’t be present, and hackers won’t be able to gain access to your account controls through the financial app.

#How Monarch Approaches This

As a household financial platform, Monarch keeps your information safe with a series of checks and balances on your data security and access, ensuring that your sensitive data stays in the right hands.

All financial data on Monarch is read-only, keeping data flow a one-way street from your financial institutions to the app. Data is encrypted with bank-level encryption at rest (in the app) and in transit (between financial institutions and Monarch), and is stored in the United States on AWS servers.

At login, Monarch uses multi-factor authentication with email verification and one-time password verification on unrecognized devices. If your password is ever breached, you’ll receive an immediate warning via email.

All data providers with Monarch are vetted for security using best practices with access control, third-party audits through SOC 2 Type II reports, and bug bounty programs to catch security gaps as soon as possible.

Monarch monitors the app 24/7, conducting regular penetration tests and security updates to keep the platform up to the latest standard. It’s also audited independently and SOC 2 certified, verifying that the app meets trust and industry-standard security frameworks/

Because Monarch is subscription-based, your data is never sold or shared with advertisers.

With your transactions available all in one place, Monarch can also help you catch fraud in your overall financial picture. You can quickly catch unfamiliar transactions and over-budget purchases on every account, instead of having to manually check every one of your banking and card accounts across multiple logins.

To learn more about how Monarch keeps your data safe, visit monarch.com/security and monarch.com/privacy.

#Conclusion

Protecting your identity doesn’t require constant vigilance, a fancy subscription, or cutting all your credit cards in half. With just a few simple steps, you can freeze your credit, set up a secure password framework, and set safeguards in place to ensure that bad actors can’t access your financial data or use your information for fraud.

#FAQs

Does freezing my credit hurt my credit score?

It does not. All it prevents is your credit being used to file new applications. Your payment history, credit utilization, and account history all stay the same, and your credit score will grow and dip as usual.

How often should I check my credit report?

At least once a year. You can request your credit report for free once a year from each credit bureau or through www.annualcreditreport.com. You should also check it before filing for any loan applications, or if you suspect fraud on your account.

Should I freeze my child's credit?

Yes. Freezing a child’s credit will protect their credit profile from being used to apply for loans or credit cards. When they reach adulthood, or when they are ready to apply for their first card or loan, they can request a thaw from each credit bureau.

What's the difference between a credit freeze and identity theft protection?

Credit freezing is when you lock your credit from being used for new loan or card applications. Identity theft protection is a service offered by financial institutions that helps protect your accounts from identity theft, offering features like dark web monitoring, data breach alerts, and fraud insurance. Credit freezing is free, while identity theft protection is often a paid service.

Is SMS two-factor authentication better than nothing?

It is, since it uses a secondary method to verify your identity through a personal cellphone on top of your password. It’s not always the most secure method, however, as fraudsters can gain access to your SMS account through SIM swapping. Instead, consider verifying with an authenticator app or biometric information instead.

What should I do first if my identity is stolen?

First, file a report on identitytheft.gov for a personal action plan based on the fraud type. Next, freeze your credit and change your passwords on compromised accounts, and set up multi-factor authentication. After that, contact the affected institutions so you can set up fraud alerts on your accounts and freeze access. Finally, file a police report and document the fraud as you go.