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Prevention

How to Protect Your Identity and Credit

Through April 20, 2021, Experian, TransUnion and Equifax will offer all U.S. consumers free weekly credit reports through AnnualCreditReport.com to help you protect your financial health during the sudden and unprecedented hardship caused by COVID-19.

Protecting yourself and family members (including children) from identity theft may require adopting a new mindset as much as it demands taking specific actions.

It's critical to recognize that your personal information, and the financial resources it can unlock, are under constant threat. Not necessarily because criminals are targeting you individually, but because the technology that makes banking and shopping online so convenient also allows hackers and other crooks to cast a wide net. Data breaches expose thousands of customers' credentials at once, and there's robust trade in stolen Social Security numbers, passwords and credit card numbers on hidden sites in the underground dark web.

Criminals can use this personal information to impersonate you (or your kids) and open credit card accounts, borrow money, make purchases or transfer funds. And since scammers and crooks are unconcerned with paying back whatever they obtain in your name, their activity, left undetected, can do major damage to your credit. That damage can be reversed, but it can still be costly, especially in terms of the time needed to document the crimes. Prevention is a much better option.

Taking advantage of these digital conveniences, therefore, requires vigilance. It's critically important to guard your personal information, and to check your financial statements regularly for unauthorized activity that could indicate criminal action.

There are also a number of basic steps you can take to safeguard your personal information and financial accounts, as well as some more advanced services you can tap to automate your ability to track suspicious activity and potential exposure of your data. Credit monitoring and identity theft protection from Experian are two such offerings, and they can alert you to financial irregularities and vulnerabilities more quickly than you might notice them yourself.

Differences Between Credit Monitoring and Identity Theft Protection

Credit monitoring alerts you whenever there is activity that involves or affects your credit report, including:

  • Inquiries: Requests from lenders to review your credit report or obtain a credit score in connection to loan applications.
  • New accounts: Any time a new loan or credit card account is opened using your name and Social Security number, credit monitoring notifies you via text or email. New accounts can also include collections accounts.

Identity theft protection, including services offered by Experian, typically encompasses alerts covered under credit monitoring, and extends its scope to include combing online exchanges, including those on the dark web, for signs your passwords or other personal data appear on lists of information stolen by data pirates, culled from data breaches or otherwise hijacked by cybercriminals.

When Does It Make Sense to Use Credit Monitoring?

Credit monitoring is something you should already be doing, by way of obtaining and carefully reviewing your credit reports once a year at AnnualCreditReport.com and by tracking your credit score for free to check for significant score changes you can't explain based on your borrowing and debt payment activities.

If those checks reveal signs of suspicious activity, or if you have reason to be concerned that your personal data has been compromised, stepping up your watchfulness with automated credit monitoring could be a wise decision.

When Should I Use Identity Protection?

Stepping up to professional identity theft protection is advisable if you know your personal data has been exposed or stolen, if you have already experienced identity theft or attempts at credit fraud, or if you're concerned that your minor children may be targeted for identity theft.

Identity theft protection can flag the need to change credit card numbers and passwords as soon as that information is compromised (and before criminals have a chance to use them). It can shield you and your children from financial loss in the event of successful identity theft and it can give you the ability to forbid and allow instant access to your credit files.

How to Prevent ID Theft

  • Turn on two-factor authentication whenever possible. This security option is widely available from companies that do business via smartphone apps and websites—which is to say practically all major retailers and financial institutions.
    Activating two-factor authentication adds a step to the login process for the apps or website in question: In addition to entering a username and password, you must enter a numerical passcode sent to you via email, text message or robotic voice call. This helps ensure your identity, on the assumption that a crook who gets their hands on your username and password will be much less likely to have access to your phone or email at the same time. Logins will take a few seconds longer, but the extra measure of security is well worth it.
  • Change passwords often. The frequency of data breaches at retailers and e-commerce websites makes it clear that passwords and usernames are vulnerable even at institutions with big cybersecurity infrastructures. You can't do anything to prevent data heists at the companies you work with, but you can limit the "shelf life" of stolen passwords by changing them frequently.
  • Use a password manager. While you may know to never store passwords on slips of paper in your wallet and to avoid using the same password for multiple accounts, having to change forgotten passwords on seldom-used sites can be frustrating. A password manager can solve that issue.
    The best password managers will keep a running list of all your passwords, and even generate and store random passwords no one would ever guess, making it easier to switch up your passwords often. During your search for a free password manager, look for a product that works with all the devices you use to shop and manage finances online (smartphone, tablet, laptop, etc.).
  • Sign up for identity theft protection. With Experian IdentityWorks℠, for example, you'll get identity theft monitoring and alerts, as well as dark web surveillance. Experian identity theft protection services also include insurance that can cover up to $1 million in financial losses related to identity theft, and the ability to apply and remove a credit lock on your Experian credit report.
  • Consider using credit freezes or fraud alerts. These make it more difficult for fraudsters to secure loans or credit cards in your name. A credit freeze prevents anyone from checking your credit report or credit score (typically the first step creditors will take in reviewing applications for loans or credit cards). A fraud alert requires creditors to verify your identity before processing any application made in your name. Both of these free services make it harder for criminals to seek credit using your identity.

In the age of digital commerce and electronic record keeping, cyber criminals are constantly devising new schemes for hijacking personal data and using it to unlock financial holdings. It's critical for all individuals to watch out for unauthorized credit activity. For many, automated credit monitoring and identity theft protection services provide an extra level of caution and care that can safeguard credit and avoid costly, time-consuming remedies to identity theft.

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