Every year millions of Americans experience identity theft and credit card fraud. Throughout 2017 alone, 158 million social security cards and 14.2 million credit card numbers were stolen. This was an 800% increase from 2016, and experts believe it will only get worse in the years to come. You may have heard about the Equifax breach in 2017, where hackers were able to steal approximately 146 million social security numbers among other personal information. In response to the Equifax breach, the U.S. Congress added a section on identity protection in the Economic Growth, Regulatory Relief, and Consumer Protection Act, which was passed in May 2018. This post will show you two methods on how to protect yourself from the horrors of identity theft, how the U.S. Congress enhanced our protection, and how to take action now.
Method One – Freeze Your Credit
When you freeze your credit, you are restricting access to your credit report to third parties, like lenders and creditors who need to access your credit reports before approving a loan. Once you freeze your credit, no one including you, will be able to open a credit card or loan in your name, thus protecting you and giving you peace of mind. To place a credit freeze, you will need to contact all three nationwide credit bureaus: Equifax, Experian, and TransUnion online or by phone. Once you do this, your credit must be frozen within one business day. Should you wish to unlock your credit, you will need to go online or call the three credit bureaus, and they will unfreeze your credit within an hour. In the past, you may have had to pay for a credit freeze, but now thanks to new legislation passed in 2018, freezing and unfreezing your credit are now free.
Call All Three Credit Bureaus to Freeze Your Credit
Equifax: Call 800-349-9960 or visit their website.
Experian: Call 888-397-3742 or visit their website.
TransUnion: Call 888-909-8872 or visit their website.
After you freeze your credit, the credit bureaus will give you a PIN number which you can use to unfreeze your credit at any time. If you lose the PIN (Please Don’t), it will be challenging to unlock your credit and probably take many hours on the phone with each of the three credit bureaus. I’d recommend you write it down and store it in a safe place, and not on your phone or computer.
When you freeze your credit nothing really changes. You can continue making purchases with your credit card, using other forms of credit which you may have already established, and most importantly your credit score is not affected by a freeze. The only thing is, you cannot access additional credit. But know since you know how to unfreeze your credit, the process should be simple.
Method Two – Fraud Alert
A fraud alert will not freeze your credit, but when you wish to open a credit card or loan, third parties must take reasonable action to contact you to confirm your identity. Usually, you will need to provide your phone number before placing an alert, which will be called if you or someone else attempts to open an account in your name. In the past, a fraud alert only lasted three months, but thanks to the recent legislation passed by the U.S Government, fraud alerts now last one year. If you want protection for longer than a year, you will need to renew the alert by contacting any one of the three credit bureaus. Once you place an alert with one credit bureau, the other two will be notified of the alert. This also applies for when you first create a fraud alert. Before writing this post, I set up an alert, by calling Equifax and took less than 5 minutes.
Credit Freezes and Fraud Alerts are two essential steps you can take to help prevent identity fraud. It is my opinion you set up a fraud alert at a minimum, and should you wish to have more protection, freeze your credit. In today’s world of cyber-attacks, like the Equifax breach in 2017, we must take these simple steps to protect our financial security. Please leave comments and questions below.