If you suspect your identity may be compromised, place a fraud alert with the three credit bureaus (Trans Union, Equifax and Experian). When you place an alert, you are entitled to a free copy of your credit report. After that, take advantage of the free annual reports the bureaus are required to give all consumers (go to www.annualcreditreport.com). Stagger your requests so that you get a report every four months.

If you are the victim of identity theft, take the following steps:

- Begin the process of having the fraudulent information removed from your credit reports.
- Make an identity-theft report to the police and get a copy. File a complaint with the Federal Trade Commission. Also, contact the office of your state's attorney general; you may be able to file a - -report there.
- Close accounts that have been tampered with. Contact each company by phone and again by certified letter. Make sure the company notifies you in writing that the disputed charges have been erased. - Document each conversation and keep all records.
- Place a seven-year fraud alert or a "freeze" on your credit reports.
- Consider purchasing identity theft insurance. It cannot protect you from becoming a victim of identity theft, but it can help you pay the cost of reclaiming your financial identity.
Find victim support at the Identity Theft Resource Center.

Contributing Sources: MSN Money