Whenever there is a data breach, consumer fears are heightened and the Equifax breach, where highly sensitive personal information of over 143 million Americans was compromised, is one of those high-anxiety events.
We have received many questions from consumers in the last week asking how they can protect themselves when their information is stolen in a data breach. Many of the questions are in the same vein:
What can I set up to help protect my credit and will a fraud alert and credit monitoring be sufficient or do I need to freeze my credit report?
What's right when your identity is stolen—a credit freeze or fraud alert? The answer depends on where you are in your life stage, your current credit situation and pure personal preference. The recently enacted Economic Growth, Regulatory Relief, and Consumer Protection Act amended the Fair Credit Reporting Act made changes to both credit freezes and fraud alerts.
- Fraud alerts have always been free, been they have now been extended from 90 days to one year.
- Credit freezes are now free in all states, both placing the initial credit freeze as well as "thawing" or lifting the credit freeze, either temporarily or permanently.
A fraud alert can be placed on your credit file, and it will on your file for one year. Also known as an "initial security alert", the alert will display on your credit report so that when a lender or other company checks it, they will be alerted that you are potentially a victim of identity theft. That company can then take extra steps to validate your identity before opening a new account.
A fraud alert is free at all three credit reporting agencies, Experian, Equifax and TransUnion. Once you request a fraud alert at one company, your fraud alert will be automatically added at the other two companies. You will not need an identity theft investigative report or any other documentation to initiate a fraud alert. It's a simple process, and is a great alternative for those who want to be cautious, but not cut off their access to their credit report.
Security Freeze (Also Known as a Credit Freeze or File Freeze)
A security freeze will prevent potential lenders from accessing your credit report. Your credit report will only be accessible by unfreezing the account. If you are planning on applying for new credit in the near future, or if you have a transaction in process—such as a mortgage application—you might consider postponing the security freeze. In order for credit to be granted, you will need to unfreeze your credit report, either permanently or for a designated time period, which requires a Personal Identification Number (PIN).
With a security freeze in place, companies that rely on your credit report for decision making, such as banks, credit card companies and utility companies cannot pull your credit report. Most of the time, this may result in the company not being able to extend credit because they will not have access to the essential data required to make an appropriate risk evaluation for extending credit.
Other Considerations for a Security Freeze
In addition to financial institutions, other types of companies use special reports that include credit report data to make decisions. For example, some employers use employment reports for background screening and tenant screeners use credit reports for rental properties. In order for these companies to get access to these reports, you will need to unfreeze your credit report.
Credit freezes need to be initiated at each of the three major credit reporting agencies, and there may be a waiting period to unfreeze, so unfreeze at least three days before you apply for credit.
Unfreezing Your Credit Report
Unfreezing your credit report will require your PIN, and can be done permanently, for a specific time period or for a specific company or person. For example, if you want to apply for an auto loan through your credit union, you can unfreeze your report for just that credit union. Freezing and unfreezing your credit report is now free.
If you want the ability to lock and unlock your Experian credit report on the fly, Experian CreditWorksSM or Experian IdentityWorksSM members can do that through a product benefit called Experian CreditLock.
Company information for each of the credit reporting agencies is below.
|P.O. Box 9554|
Allen, TX 75013
1 888 397 3742
|P.O. Box 740256|
Atlanta, GA, 30374
1 800 685 1111
|P.O. Box 2000|
Chester, PA, 19016
1 888 909 8872
Which identity theft protection method you use is completely up to you—here are more tips for what to do if your identity is stolen to help you decide your best course of action. But, the sage advice of what you do on a daily basis to protect your identity still stands:
- Be vigilant about carefully monitoring of your bank and credit card accounts for any transactions you do not recognize.
- Monitor your credit reports at all three credit reporting agencies, Experian, Equifax and TransUnion, especially for new account openings.
- Watch for notifications, mail or phone calls about transactions, accounts, memberships or medical treatment that you did not initiate.
- Don't fall for phishing scams.
- Use the latest guidance on passwords.
- Take advantage of credit and identity theft monitoring products offered by the breached company
To quote the classic TV show, Hill Street Blues, "Let's be careful out there."
Editorial Disclaimer: Opinions expressed here are author's alone, not those of any bank, credit card issuer or other company, and have not been reviewed, approved or otherwise endorsed by any of these entities. All information, including rates and fees, are accurate as of the date of publication.
This article was originally published on September 15, 2017, and has been updated.