The gross negligence and data breach by Equifax affecting 143,000,000 Americans has created a lot of emotional and financial turmoil.
We are constantly asked a number of questions in the aftermath of the Equifax data breach event.
Here are a few examples: “What should I be doing right now? Is there something more I can do? What about freezing my credit, how does it work?”
Those are all very good questions. Here are some answers to provide you additional information on this topic and unfortunate event.
Freezing your credit is a very strong option to combat criminals from accessing your credit profile and information for their financial gain. But just so you know, like most things, it comes with a cost, both financially and in time convenience.
Let’s take things one step at a time …
What’s a credit freeze?
A credit freeze (also called a security freeze) restricts access to your account, making it harder for thieves and hackers to abuse your information and credit profile. The FTC has a great site with Credit Freeze FAQs.
Why would I do this?
It protects your credit profile. It doesn’t affect your credit score. It provides emotional peace of mind protecting your information from abusive hackers attempting to start new accounts. It’s a great tool for parents with kids under the age of 18 to prevent child identity theft. It’s also a great tool to protect the identity of deceased loved ones to prevent “ghosting.”
Why wouldn’t I do this?
Cost and convenience; you’ll have to pay around $10 per person per credit reporting agency. So a couple would end up paying $60.00 to freeze their credit. Additionally, while it won’t affect existing accounts, if you want to start new accounts (e.g. refinance a mortgage, get a new car, compare your insurance rates, start a new job) you’ll want to plan ahead. Unfreezing your accounts may take some time.
How do I do this?
Contact each of the 3 credit bureaus and follow their steps:
You’ll pay a fee to freeze and unfreeze (thaw) your credit. Most fees are $10 to freeze and $10 to thaw your credit. This is a for one person with one credit agency.
Once your file is frozen, you’ll receive a password or PIN, keep that in a secure location. You don’t want it stolen AND you don’t want to lose it. If you lose it, plan on EXTRA time to thaw out your credit profile.
What else can I do?
1) Check your credit report. You can do this at www.annualcreditreport.com You are allowed a FREE credit report from each of the credit reporting agencies (TransUnion, Equifax, Experian)
2) Check your bank accounts, credit card accounts and benefits statements. Look for any suspicious activity and report it immediately to your financial institutions and credit reporting organizations.
3) Check your internet subscription inventory. Just how many services (Amazon, Netflix, Spotify, Audible, etc.) do you have linked to bank cards or credit cards? Make sure you know and have a separate password to each one.
What do I do if something happens or I suspect suspicious activity?
Here are the 3 steps to-do immediately to limit the damage:
1) Place a fraud alert with the credit reporting agencies. (TransUnion, Equifax, Experian)
2) Order your credit reports from all 3 credit reporting agencies. (TransUnion, Equifax, Experian) Identity theft victims get copies for FREE.
3) Create an Identity Theft Report by contacting the Federal Trade Commission& Your Local Police. (Your FTC affidavit and police report make your identity theft report).
What now, is this the new normal?
Yes it is. Make a habit of checking your accounts regularly. Maybe your accounts look clean now. Keep in mind hackers are patient and willing to bide their time before exploiting your information. Just like you buckle up in the car or check Facebook, make it a consistent habit to check your accounts regularly.
You now have a number of tools to use to against hackers and thieves from abusing your information. It’s best to take a proactive and consistent approach to guard your identity and information.
All the best,
Client First Tax & Wealth Advisors