How to Really Protect Your Credit File from 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.