With yet another hack of the credit reporting agency Equifax, there’s a good chance that your personal data is at risk. It’s almost impossible to turn on the news and not hear the phrase “credit freeze†tossed around, but what is it? If you’re concerned about your personal information being exposed to hackers, a credit freeze may be a good option for you. Read on to find out how to better protect your sensitive data and prevent identity theft.
With the latest Equifax hack, it seems like personal data just isn’t that personal anymore. That’s partially true, as information like the social security numbers and addresses of over 140 million Americans was recently accessed by hackers months before it was revealed to the public. Equifax, TransUnion and Experian are the three major credit reporting bureaus in the U.S. They control access to nearly every American’s credit history, as well as the confidential information that goes along with that.
With nearly half of the country affected, this isn’t one of those times when you can just hope for the best and assume it won’t affect you. Fortunately, there are a number of ways to protect yourself from identity theft.
The first thing to do is find out if your personal information has been revealed. You will be prompted to enter the last six digits of your social security number and your last name. Simply clicking on the button will then tell you if your personal data was part of the massive breach.
If you confirm that your personal information was hacked, it’s not time to panic — but it is time to come up with a plan.
The good news is that there are some concrete steps that you can take that will help safeguard your data and help prevent identity theft in the future.
Keep an Eye on Your Credit History
You’re allowed to request a copy of your credit history from each of the three major credit bureaus, once every 365 days. Annualcreditreport.com is the only website that’s been directed by the federal government to provide truly free credit reports within this time frame.
Depending on your situation, you can request all three at once, or spread them out over the year. If you suspect you’re a victim of identity theft, then it’s wise to obtain all three reports so you can pinpoint the fraudulent actions and begin to address them.
If you’re planning to make a large purchase using credit, like taking out a mortgage, then checking a single report can help assure you that everything on your credit history is as you expect. It’s important to check your credit report before filling out the loan paperwork so you can take care of any issues before they can impact your credit worthiness.
Freeze Your Credit
This phrase has been tossed around a lot after the news broke of the Equifax hack. The truth is, it sounds more complicated than it really is. Freezing your credit simply adds one more layer of protection before someone is able to access your credit for the purposes of opening a new credit card account, taking out a home loan, etc.
If you want to use your credit for an application, then you simply unfreeze your credit by entering a personal identification number (PIN) that is only known to you. While it is one more step to take when trying to open a new account or take out a loan, it does mean that hackers and thieves who are able to access your personal information, like social security number, date of birth and home address, aren’t able to use that information to open fraudulent accounts or make unauthorized purchases.
Using Your Credit After a Freeze
If you choose to freeze your credit, you must do it separately with each credit reporting agency listed above. There can be a cost associated with this, and it’s usually no more than $20 per account, though it can even be free.
Almost every state in the U.S. will keep your credit freeze permanently until you request otherwise. Kentucky, Nebraska, South Dakota and Pennsylvania will only keep your credit frozen for four years, at which time you need to make the request again.
A temporary unfreeze can be achieved fairly simply by using the online tools of each credit bureau. The cost ranges from free up to $10, depending on the state you live in and other conditions, such as age or income. That will allow you to fill out a loan or credit application like you normally would before your credit freeze. After you’re finished, the credit freeze will automatically resume.
Existing lines of credit, such as credit card accounts, are not affected by a credit freeze. That means you can use your cards like normal even as you freeze/thaw your credit accordingly.
In an age where personal data just doesn’t seem, well, personal anymore, it can be difficult to feel like you’re in control of your credit history and personal identity. Even if you confirm that your data has been stolen, that’s not a reason to fret just yet. You can rest a bit easier by being proactive and taking the steps above to help keep your data personal to just you. If you’re still concerned, talking with a certified financial planner can help assess all your options.