Identity theft involves someone stealing your personal information and using it without your permission, often to open credit cards and other accounts in your name. In some cases, people don't even realize they've been a victim of identity theft until the damage has already been done. Identity theft is not only a huge violation of your privacy, but can also cause a huge amount of damage to your finances and credit. The best way to handle identity theft is to prevent it from happening in the first place. Here are five tips for preventing identity theft:

Shred Documents

Old bank statements, check ledgers, and other documents containing sensitive information can easily be used to steal your identity. If you must hold onto certain physical documents, especially for tax purposes, be sure to store them securely in a non-obvious storage or hiding place.

Anything non-essential should be shredded. One easy way to keep on top of this is to use the services of a shredding company on a regularly scheduled basis—like This is an especially good idea if you also handle sensitive documents for other people, such as at work. Many shredding companies can come to your home or office.

Sign up for a Credit Monitoring Service

In order to prevent identity theft from spiraling out of control and wreaking havoc on your finances, it's important to notice any suspicious activity right away. The best way to do this is to carefully monitor your credit reports for unauthorized new accounts, information being changed without your permission, and other signs of your identity being tampered with. Choosing from this guide to the top ten best credit monitoring services is a good start, as it breaks each credit monitoring service down by features and cost.

Choose Passwords Carefully and Change Frequently

Simple, easy to figure out passwords make it way too easy to hack into your email, bank account, or credit card account. The key to password security is to keep your passwords random and complicated. Choosing random words that have no obvious significance to you, rather than using your kids' or pets' names, for example, is the best way to create a base for your passwords.

From there, add numbers and symbols and try to use both lowercase and uppercase letters. In order to remember all of these complicated passwords without writing them down (another privacy no-no), consider using a secure password storage service, such as LastPass.

Be Cautious on Social Media

As people become increasingly comfortable with social media, it's easier to start letting your guard down about sharing private information through that channel. Something as simple as mentioning your mother's maiden name or your birthplace on a public Facebook post can provide a password bypassing tool for would-be identity thieves. Be cautious about who you add to your social media networks, do your best to refrain from posting sensitive or private information, and make sure to keep your privacy settings high.

Use Anti-Virus Software

Some identity thieves access your computer, and the large amount of personal information it contains, through internet viruses and malware. Using anti-virus software is your best protection from this sort of violation, and will also help keep your computer running optimally. Some popular antivirus software companies include AVG and Norton. When you first download antivirus software, run a thorough scan of your computer. From that point on, you can either keep it perpetually scanning in the background, or just run scans on a regular basis.

These days it may not be possible to completely guarantee that you won't have your identity stolen, but you should still do what you can to make things harder for potential thieves. By following these simple tips, you are much less likely to become a victim of identity theft.