How can someone steal who you are? Buy a car in your name? File an income tax return in your place? Do you think it can't happen to you? Think again.

Identity theft can cause a tremendous shock if you're turned down for a mortgage, refused a credit card, or collection agencies begin to hassle you to pay up on purchases you know you didn't make.

This article explains:

• How identity theft occurs and how it can affect your life
• How to prevent identity theft
• What to do if identity theft happens to you
• Resources that can help

Identity theft hits 9.3 million Americans each year, and can create havoc in your credit-and personal-life. Don't let it happen to you. Take precautions. Stop identity theft.

What is Identity Theft?

Identity theft can happen two ways: through account takeover or name fraud.

• Account takeover occurs when a thief steals your current credit account information, like your credit card, and makes purchases either with the card itself (stolen from you) or using the account number and expiry date. You find out about this when you get your monthly credit card bill with charges on it that you didn't make.
• Name fraud, also known as application fraud, is even worse than account takeover. It happens when someone uses your SSN to open new accounts, usually credit applications, to make purchases using your credit rating and good name. You don't usually know about this until it's too late, when you're trying to buy a new home, car, or get a student loan, and you discover ID thieves have ruined your credit and good reputation.

How to Prevent Identity Theft

According to the Better Business Bureau's 2005 report on ID theft, thieves get your personal information in simple ways: when you lose your wallet or it's stolen; or when friends, family members, or other people, who have access to your personal information, steal it from you and misuse it. Often, ID thieves get your personal information by traditional channels (like digging through your mailbox) and not electronic ones, like the Internet.