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Dennis Smith

Last month, I advised that a possible recession was looming before us, and though our economic future remains uncertain, it does appear that the economy is in a downward spiral. We should all be pleased that Alan Greenspan has reduced the interest rate by a full half percent, which has provided a much-needed prodding of the stock market, and, in turn, has given us a healthy increase in our overall confidence of our financial future. I am hopeful that he will again reduce the rates at the Federal Reserve meeting at January's end.

We need to continue to inspire all Americans toward believing in the economic vitality of our common future. The big question is: Will your own confidence in your own financial future sustain your own belief in our decade-long economic expansion? Until we have that answer, I will go on to another subject – your credit.

P.T.Barnum believed there is a sucker born every minute, and there is no doubt that some people continue to believe this. Take, for instance, a ring that has been calling African-Americans, claiming that it was initiating a class-action suit against the southern states to collect millions of dollars in reparations for past use of slaves, and that all one had to do to be a part of the legal action, and to collect millions, is to provide some basic information – like name, parents' names, age and Social Security number. It is a scam, of course, just to steal identities, which can then be used to create credit card accounts, accounts in stores and even checking accounts in banks. That is just one way that the bad guys will try to separate you from your personal resources.

I know of a first responder, let's call him Joe, who applied for a car loan. He was confident he would be instantly approved, for he had always been careful with his money and paid his bills on time. To his horror, not only was he turned down, but when he requested his credit report, he found a slew of unpaid credit card and phone bills on his record – none of which was his doing. To add insult to injury, Joe discovered that leaving debts unpaid is perhaps the only offense in this country for which a person is guilty until he proves himself innocent. The entire burden of proof is often on the credit card holder to establish that the charges on his credit report were someone else's mistake – or a crime.

First responders as a rule have a good overall credit rating, but it is up to you to protect it. The bad guys will use every method to steal your name, from high-tech computer decoding to old-fashioned garbage can rummaging. If they can access your personal information, they will surely run up bills in your name. The unpaid bills will go on your credit report, and you may not become aware of a problem until you apply for a job, a car loan or a home mortgage.

Here's how they work. The crook searches out your credit card numbers, passwords, account numbers and the prized Social Security number by stealing your wallet, rifling your trash, storming your mail box or snooping in your workplace. The bad guys can get personal data by tracing information you've shared on unsecured Internet sites, or even buy it from "inside sources" such as clerks at stores where you've applied for credit. Someone may even order a copy of your credit report by posing as an employer, landlord or other person who has a legal right to view your record.

Using the information they gather, the bad guys can then both charge purchases on your existing credit card accounts and open new ones in your name. They just fill out the form and send it in – the company has no idea that the applicant isn't who she claims to be. They can get a cell phone in your name. They can open a bank account and bounce checks. They can even get an auto loan or file for bankruptcy, all under your name. These delinquent bills, then, will be reported to your credit file, destroying your good name and causing you months of headaches – and perhaps hundreds of dollars – as you try to straighten it all out. There is no guarantee that credit fraud won't happen to you, but you can minimize your risk by considering a few suggestions:

• Guard your mail from theft by depositing outgoing mail in post office collection boxes and removing incoming mail promptly from your mailbox.

• Don't throw sensitive information into your dumpster. Shred or tear up bank correspondence, credit card applications, charge receipts, insurance forms and anything else with an account or Social Security number on it.

• Don't give out personal information over the phone, over the Internet or through the mail unless you initiated the contact and know with whom you're dealing.

• Keep items with personal information in a locked file or other safe place, especially if you are having service work done in your home.

• Close credit card accounts that you don't really need and keep track of when your bills arrive on all your accounts.

• Don't give out your Social Security number unless absolutely necessary. Choose a driver's license number different from your SSN if you have that option, and don't carry your SSN card with you.

• Obtain a copy of your credit report every year from Experian (1-888-EXPERIAN), Equifax (1-800-685-1111) and/or TransUnion (1-800-916-8800). Scrutinize the statement for transactions you didn't make and inquiries you didn't authorize. By catching suspicious items early, you can place a "fraud alert" on your account and help stop credit theft before it gets out of hand.