For those of you concerned about protecting your identity, I have some great news for you. Freezing and thawing your credit is now free! You might not think your identity is at risk, but identity theft can happen to anyone. Here’s what happened to me.
In September of 2017, I learned that my private information had been compromised as a result of the Equifax data breach. My Social Security number, date of birth, driver’s license number and my credit card numbers were all included in the list of data elements that might have been stolen. My husband was not on the list of those affected, but I was. What could I do? I ended up taking the most drastic step I could think of: I froze my credit. According to my favorite consumer advocate, Clark Howard, activating a credit freeze is the one sure way to prevent thieves from using private information to create fraudulent credit accounts.
Adding Insult to Injury
After I discovered the theft of my private data, I took immediate action. I called the three credit reporting agencies, Transunion, Equifax, and Experian, and paid to have my credit frozen. Yes, I paid to have it done. It cost me $10.00 for each credit reporting agency. So, not only was I a victim of a crime, but I had to pay to take steps to try to prevent further damage. This might be one reason why, according to a statistic reported in a CNBC article, only about 8 percent of consumers have carried out credit freezes since the Equifax data breach.
What a Credit Freeze Does
Essentially, a credit freeze prevents anyone from running a credit check. In this way, criminals are prevented from opening fraudulent accounts in your name. There are some downsides to having your credit frozen, though. I was unable to have my retirement income accurately forecast for my financial advisor. In order to run the report, the company that manages my retirement pension account needed to do a credit check (I’m not sure why), and they were unable to do so. I was able to estimate my retirement income using another method, but it was an inconvenience. The same thing happened when I was trying to estimate my Social Security benefits for my financial advisor. So, I’m considering thawing my credit at some point in the future. Here’s where the good news comes in.
Now for the Good News
Federal legislators, some of whom were likely affected by the data breach as well, listened to their constituents and enacted a law that ensures free credit-reporting freezes and free thawing of the freezes for all consumers. The law was effective as of September, 2018. In addition, the new law extends short-term credit fraud alerts from 90 days to one year in length. A fraud alert requires a lender to confirm a new credit request with a consumer to prevent criminal activity. Great news indeed!
To Thaw or Not to Thaw
If I decide to thaw my credit, I will now pay nothing. The only hassle will be locating the file with the special personal identification numbers (PINs) I was given at the time I enacted the freeze. Each credit reporting agency requires a PIN to activate the thaw, and the thaw may be temporary or permanent, depending on the wishes of the consumer. I don’t anticipate the need for any new credit in the near future, thank goodness, so I’ll probably keep my credit freeze in effect for now. It’s good to know that if I needed to thaw it, though, it’s FREE!
Looking to the Future
Although I didn’t have any control over what happened to my data at Equifax, there are some steps I can take to limit future damages. If I thaw my credit, I might decide to place credit fraud alerts with the three reporting agencies, renewing the alerts every year. I will monitor my accounts closely, and I will visit the Annual Credit Report site for my free annual credit report from each reporting agency. I’m also going to be careful to change passwords on a regular basis, which is not an easy thing for me to do. I’m a little paranoid about using an online password management site, so I have devised my own little system for now. Bottom line: Do what you can to protect yourself.
Do you have any data-protection advice? What has worked well for you? I’m always interested in learning new ways to approach situations, so I’d love to learn about your ideas in the comment section below. If you liked what you read, please consider subscribing. Stay safe out there!