The reason is identity theft. Papers with your personal or financial information are useful to anyone who finds them. The FTC puts it plainly: identity thieves can't find documents you have destroyed, and destroying papers with your personal information reduces the likelihood of becoming a victim. It's one measure among several, not a complete defense.
Shredding is the last step of document life, so it pairs with document retention: decide how long to keep something first, then destroy it. This page describes federal guidance and isn't legal advice. Rules for businesses and regulated records differ from household habits,.
What shredding is
At home, shredding means using a shredder or taking paper to a community shred event; a business may hire a destruction company. The standard in federal guidance isn't the tool, it's the result: information that can't be read or reconstructed.
The FTC's Disposal Rule uses that wording. It applies to people and organizations that use consumer reports, including lenders, insurers, employers, landlords, and even individuals who pull a credit report on a prospective nanny, contractor or tenant. The FTC says the standard is flexible: you decide what's reasonable based on how sensitive the information is, what different methods cost, and how technology changes. It also encourages anyone who disposes of records with personal or financial information to take similar steps.
What it looks like
Shredding is a family of methods. This table shows what the sources actually describe.
| Method | What it covers | Source |
|---|---|---|
| Shredding paper | Papers with personal or financial information | FTC consumer guidance |
| Burning or pulverizing | Paper records with consumer report information, so they can't be read or reconstructed | FTC Disposal Rule |
| Community shred day | Households without a shredder | FTC consumer guidance |
| Document destruction contractor | Businesses; the FTC suggests due diligence such as reviewing an independent audit, checking references, and asking about trade association certification | FTC Disposal Rule |
| Destroying or erasing electronic files and media | Digital copies and storage devices holding consumer report information | FTC Disposal Rule |
| Media sanitization | Making data on storage media infeasible to access for a given level of effort | NIST SP 800-88 Rev. 1 |
NIST's guide is aimed at organizations and system owners and chooses a method based on how confidential the information is. Its keywords include secure erase and crypto erase, and it includes a sample certificate of sanitization. You don't need to follow it to shred a bank statement, but it's useful if you're retiring a phone, laptop or drive.
What to keep and for how long
Shred after, not before, the document has done its job. The FTC's 2025 guidance sorts papers into groups:
- Keep about a year: bank statements, pay stubs, undisputed medical bills, credit card and utility bills, deposited checks.
- Keep at least three years: income tax returns and tax-related documents such as canceled checks, receipts, W-2s and 1099s.
- Keep while you own: vehicle title, home title or deed, loan documents, home improvement receipts, leases, major-appliance warranty papers.
- Keep, and lock up: birth certificate, Social Security card, valid passports, marriage and divorce records, military records, wills, living wills and powers of attorney.
- Shred: ATM receipts, credit and insurance offers, cleared checks after 14 days, credit reports, prescription information for medicines you no longer take, expired warranties, expired credit cards, licenses and other ID.
The FTC adds that if you can reach a document electronically, you can consider shredding the paper copy. The IRS notes that in some cases tax records should be kept longer than three years, so confirm with the IRS record-keeping page before you shred anything tax-related.
If you want a digital copy first, scanning documents on iPhone is quick, and the record retention calculator can tell you when a paper is safe to let go. For anything you share before shredding, the redact PDF tool can cover sensitive fields.