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How to Really Protect Your Credit File from Theft

Security & ID Theft

Hardly a month goes by without a fresh report on some big data breach. It seems like hackers and security specialists play a never-ending game of leap frog in trying to stay ahead.

So what's a responsible person to do? With every aspect of our lives so interconnected, we can't just "go off grid."

If your personal data has been compromised, you're already familiar with a free offer of 12 months of credit monitoring and protection. But how effective is that really? Perhaps Brian Krebs of Krebs on Security says it best:

The biggest takeaway for me has been that although these services may alert you when someone opens or attempts to open a new line of credit in your name, most will do little — if anything — to block that activity. My take: If you’re being offered free monitoring, it probably can’t hurt to sign up, but you shouldn’t expect the service to stop identity thieves from ruining your credit.

Or as I like to explain: credit monitoring will tell you the horse has bolted from the barn and is in the next county, but I want something that doesn't let anyone open the barn door in the first place.

Enter the "security freeze" (also known as "credit freeze"). I just initiated a freeze on my credit files and recommend you consider doing so too.

The freeze essentially locks-up your file at the credit agencies from anyone reviewing your credit record. ID thieves can apply for all the credit they want in your name, but if a lender can't review your record they won't (shouldn't) approve the application.

So how do you get a credit freeze and what should you be aware of? Here are a few items:

  • There are four credit agencies and you'll need to contact each with your request: Equifax, Experian, Transunion, and the less well-known Innovis.
  • If you're married, then both you and your spouse will need to make separate requests.
  • The costs are nominal (usually $10 each) but depend on your state, whether you're already a victim of ID theft, the respective credit agency, and a few other factors.
  • You'll be given--or will choose--a PIN (personal identification number) for accessing your record.
  • For online requests, you'll usually have to answer several questions about your credit history, possibly including trick questions to confirm it's really you.
  • A credit freeze only freezes your credit file. It's not going to prevent ID thieves from stealing the use of your existing credit cards or debit cards.
  • If you have a credit freeze and then need to apply for credit, you'll go through a similar process (and fees) to "lift" the freeze. The lift can be temporary or permanent.

Here's a summary of my experience that hopefully will help you get a headstart....

Equifax

Follow this link. While the other three agencies allow you to make an online request, strangely, Equifax makes you snail-mail a written request. [July 7, 2017 update: it appears Equifax may now allow you to handle this online.]

Since I'm an Oregon resident who's not currently a victim of ID theft, Equifax charges a $10 fee. With this being a written request, my wife and I mail the required information together in the same letter and it costs us $20 total.

Experian

Follow this link. The Experian process was entirely online, fast, and they didn't even charge me.

Transunion

Follow this link. The Transunion process was also entirely online, but I had to first register for an account. The freeze costs $10 per individual request (again, some exceptions).

Innovis

Follow this link. Innovis was perhaps the fastest and easiest online process. They didn't even require the establishment of a PIN and they didn't charge for the freeze. Easy-peasy.

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So then, are there any drawbacks? Basically just one...if you frequently apply for credit, the freeze-unfreeze-freeze-again nature of the process and the costs could become a hassle.

For more information, the Federal Trade Commission has a helpful FAQ page. And Brian Krebs has a really excellent write-up How I Learned to Stop Worrying and Embrace the Security Freeze.