You may have seen or heard in the news this week that one of the big three credit bureaus, Equifax, had its data security breached. Equifax reported the data at risk includes the Social Security numbers, birth dates, and addresses of more than 143 million Americans. Equifax also said the breach involved some driver’s license numbers, credit card numbers for roughly 209,000 U.S. consumers, and “certain dispute documents with personal identifying information for approximately 182,000 U.S. consumers.” There are very few details about how this happened or what group is responsible for the breach.
What we do know is that Equifax is working to help you determine if your personal information was compromised and keep your identity safe. The company has established a website to identify if your information has been compromised and is offering one free year of their credit monitoring service to alert you to any change in your credit.
While many have complained about Equifax’s response to the breach, we believe all consumers should request the free credit monitoring service. Each adult in your household should apply for credit monitoring separately. It’s a two-step process. You will start by entering your last name and the last six digits of your Social Security number. You will then be provided a future date upon which you can complete an application for free credit monitoring. Don’t forget to complete the second step.
Going forward, credit monitoring alone will not protect you from identity theft. The better option is what is called a credit or security freeze. A credit freeze blocks creditors’ ability to view your credit file unless you unfreeze your account beforehand. You must establish a credit freeze with each credit bureau—Equifax, Experian, TransUnion, and the lesser-known Innovis—independently and for each adult in your household. It is critical that you record and safeguard the PINs provided by each credit bureau when you complete a freeze.
Depending on your state of residence, you may incur a fee—typically less than $10—when you impose a credit freeze. However, that fee may be waived if you claim to be a victim of identity theft. Consumers Union has a useful state-by-state guide listing freeze and unfreeze laws and fees.
If you decide to implement a credit freeze, you should do so for each adult in your household for each credit bureau, including any young-adult children (age 18 or older) who may or may not have an established credit file. You will also need to be prepared to temporarily unfreeze your credit each time you seek a new loan, such as a car loan, mortgage, home equity line of credit, credit card, or merchant card. The same is true for a background check that includes a credit review, which typically happens when starting a new job.
For more information on credit freeze,visit the Federal Trade Commission’s website.