Credit Freeze & Identity Theft
It's one of your worst nightmares. Some scam artist has breached your identity portfolio and made off with your Social Security number, your credit cards and bank account numbers.
What can you do to minimize the damage? Right out of the gate, one of your first steps should be to place a "credit freeze" (or security freeze) on your financial accounts.
Sure, you'll want to notify the three credit bureaus – Experian, Equifax, and TransUnion – by means of a "fraud alert." That should keep creditors on their toes and keep them from granting credit to fraud thieves. Just note that a fraud alert isn't a credit freeze – the former is basically a "red siren' popped onto a credit report by a
credit bureau notifying creditors that there may be either suspicious or fraudulent activity in your credit file. Unlike credit freezes, fraud alerts cannot prevent identity theft.
In addition, a credit freeze is not the same deal as identity theft protection. The latter is a more formal, pre-emptive method of protecting your personal financial identity, usually by hiring a credit monitoring service or taking the steps yourself to keep track of your credit reports to fight off identity fraud.
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Past a fraud alert, a credit freeze is vital after an identity breach.
Here's a blueprint on how it works. When you implement the credit freeze, you'll be given either a PIN number or password that you (and only you) can use to temporarily remove the credit card when you need to open a new bank account or obtain other types of credit. That means everyone from a landlord to potential employers can't tap into your credit report during a credit freeze – and that includes identity thieves, too.
That step will also require the aid of the credit reporting agencies. Studies show that a credit freeze the best way from keeping identity thieves from opening an account using your name. If you've been the victim of identity theft, there should be no charge for installing a credit freeze. A note: include the police report filed after the data breach (yes, you should notify the police – identity theft is, after all, a criminal offense).
When you "unfreeze" your credit account, have some patience. It takes up to three days for a credit freeze to totally "thaw".
For more information about placing a credit freeze at each of the three bureaus, please visit their fraud prevention and identity theft Websites listed here:
Rules do differ from state to state, so check out the Consumer Union Website to find out what you need to do in your state to implement a credit freeze.
Plugging in a credit freeze after an identity breach isn't a "maybe" – it's a necessity. If you've been a victim of identity theft, a credit freeze should be your first step – this will stop any further damage while you investigate and address the identity breach.