If the latest massive data breach has you wondering if there’s something you can do to protect yourself — there is. The first option is to take the reactive approach and simply monitor your credit. The second is to be more proactive and freeze your credit, making it very difficult for anyone other than you to take out credit in your name. This means even if a criminal obtains enough information to open an account, they’ll have a number of obstacles preventing them from using it.
Under the Economic Growth, Regulatory Relief, and Consumer Protection Act—effective since September 2018—you can freeze your credit free of charge. This began in 2017 when consumer advocates called on Congress to provide free access as, previously, each of the three credit bureaus could charge for the service and to unfreeze or “thaw” credit (useful for anything requiring a credit check).
When you freeze your credit, the credit reporting bureaus can’t give any information to anyone who makes an inquiry about you. Typically, businesses inquire about your credit when you, or someone posing as you, attempts to open a new credit card, buy a car, or rent an apartment. The credit check helps the business determine if they want to lend or rent to you and can help set your rates and lending terms for loans and credit cards.
If your credit is frozen, the business can’t get any information about you which typically stops the process and means a fraudster can’t open an account while using your identity.
Though freezing your credit won’t guarantee safety, it’s a pretty strong defense against identity theft. You still need to unfreeze your credit if you legitimately want to apply for a loan or line of credit. While this is not a heavy burden, it does add extra steps anytime you do something that requires a credit check.
While reactive, credit monitoring is a viable alternative to a full freeze. When you pay for a credit-monitoring service, you’ll get alerts about any activity involving your credit report. This can quickly bring a potential problem to your attention—but you won’t know if someone has used your identity until after it happens.
You can always request a free copy of your credit report annually from each of the major credit bureaus and check it for any activity you don’t recognize. If you do find anything suspicious, report it immediately and take steps to lock down your credit through a fraud alert or credit freeze.
If you want to freeze your credit, you need to do it at each of the three major credit bureaus: Equifax (1-800-349-9960), TransUnion (1-888-909-8872) and Experian (1-888-397-3742). If you request a freeze, be sure to store the passwords needed to thaw your credit in a safe place.
Whether or not you choose to freeze your credit, fraudsters can still take advantage by obtaining information like your credit card number(s) or passwords to online accounts. Make sure you’re taking the proper steps to secure your information and keep it from falling into the wrong hands.