Identity theft is a crime that occurs when someone uses another person’s identification information to make credit transactions.

The severity and specifics of identity crimes vary from case to case, but identity theft victims often face frustrating (if not devastating) setbacks to their credit.

In fact, some people are forced to file bankruptcy thanks to these identity theives.

Although there’s no guaranteed way to prevent identity theft, a new (free) service may help you determine your risk for becoming a victim.

Traditional Wisdom: Check Your Credit Report

Checking your free credit report (www.annualcreditreport.com) is one of the most important ways of making sure your not a victim of identity theft.

By comparing action reported by the three major Credit Reporting Bureaus with action you know you’ve taken, you can see whether anyone besides you has been using your personal information.

But, though such checks can help you discover identity theft before it becomes a huge headache, they can only detect crimes that have already been committed.

Calculating Your Risk

The new service from MyIDScore.com claims to predict how likely you are to have your identity stolen. Here’s how it works:

• Visit www.myidscore.com and fill in the personal information it requests (note: giving your Social Security Number is optional).
• Answer multiple-choice questions to verify your identity.
• View your “identity theft risk” score, which ranges from 0 to 999.

Lower scores indicate a lower risk of identity theft victimization.

How It Works

According to the Washington Post, the service works by identifying warning signs that someone has used all or part of your personal information to take credit action.

The service can reportedly detect suspicious actions before actual purchases are made – for example, if a thief applies for and is issued a credit card using your SSN.

Insiders for the site suggest the service for those who have found out that their personal information was compromised in a data breach (data breach updates).

Tags: bankruptcy, credit, Identity Theft