It is the age of the data breaches. Hackers are running wild throughout the interwebz, snatching whatever they can get their grubby, little, digital hands on. Yahoo, Cambridge Analytica, eBay Equifax, and the list truly goes on and on (and on). So, what can we do to protect ourselves from these vicious, virtual villains (alliteration!)? Well, one thing that you can do is freeze your credit. But, before you consider taking such a step, let’s go over what freezing your credit really means.
A virtual bodyguard
Putting your credit on ice — maybe because you’re feeling justifiably paranoid after the recent Equifax breach that plundered roughly 150 million Americans’ data — effectively will block anybody who might have your data from opening up any new accounts in your name. Just remember: These blocks also apply to valid and legitimate inquiries (such as taking out a loan or shopping for a home). Other than that, it might be a pretty good move, financially speaking. Credit freezes, in the past, were usually viewed as too much of a nuisance to actually be worth it. But with a dramatic uptick in virtual criminals, the rules of the game may be changing. And credit freezes might be seen now in a much more positive light.
“A security freeze is the most effective measure against ‘new account’ identity theft because it stops thieves from using the consumer’s stolen information,” said Chi Chi Wu, a staff attorney at the National Consumer Law Center, in an interview with CNN.
Credit freezes prevent new accounts from being opened, as well as doing a good job of hindering anybody who may wish to view your credit report. While pre-existing creditors, as well as debt-collectors, will be able to access your credit information, any new lines of credit that you might want to open will be prohibited unless you lift the credit freeze. You will be able to unfreeze accounts temporarily, for a predetermined set period of time or for particular people such as landlords and lenders. The price for freezing and unfreezing accounts varies by agency but tends to cost between $2 and $10. On the other hand, shout out to Maine and South Carolina, where freezing and unfreezing accounts is absolutely free. Woot woot!
In the wake of the Equifax breach, the company tried to garner some good public will by freezing accounts for 30 days with absolutely zero cost to its users. But a freeze is not completely impervious to criminal action until all three credit bureaus have been frozen. According to CNN.com, “Consumer protection organizations like the National Consumer Law Center have further called for Equifax to waive the fees for credit freezes at all three credit bureaus.”
Credit freezes versus credit monitoring
Although the two may seem to be very similar, there are actually some key differences between freezing and monitoring your accounts. These companies tend to lose money when you decide to freeze your accounts. This is because their business, essentially, is your data. That is why they try to dissuade people from these freezes by making it annoyingly difficult, charging fees to freeze and to unfreeze accounts and to make customers go to each bureau individually in order to freeze their accounts. Often, they might try to entice you into accepting services such as fraud alerts or monitoring instead. These can be helpful to find out if someone is viewing your credit report. But it’s usually only a retrospective aid and does nothing to actually prevent the crime while it is happening.
“Equifax is offering something that it says functions like a credit freeze,” Mike Litt, consumer program advocate with US Public Interest Research Group, told CNN. “The problem is that it is incomplete protection and it only lasts for a year. What we’re recommending is that people don’t bother with the package Equifax is offering and just place freezes with the three credit bureaus instead.”
So, how do I set a freeze?
Due to the fact that you can, with relative ease, lift frozen accounts when you need to, a freeze might not be such a bad idea. Additionally, if you know which line of credit your lender is using, you can even skip over the fees by lifting that single freeze specifically.
To set up your own credit freeze, go to the freeze page at each credit agency’s website individually: Equifax, TransUnion, and Experian. You might be asked to give some information in order to start your freezing process. Understandably, you might be wary of doing such a thing given that it requires you offering up more information. If this is the case, you should call the agencies directly. From these agencies, you generally will be given your own personal PIN. Make super extra sure that you don’t lose this number, as, if you do, it will be a real pain in the neck for you.
The cost of a freeze will be subject to both state law and to the individual agency’s discretion. Often, there is no charge for victims of identity fraud to add or lift a security freeze. Rules and fees at TransUnion, Experian and Equifax are similar.
It is time to be much more careful about what we are doing with our data. Although paranoia tends to be a bad thing, it is pretty well justified in this age where we have no clue who is getting ahold of our data through nefarious means. A freeze might not be such a bad idea if you are especially worried about the state and safety of your information. Just remember, freezing accounts might be somewhat of a nuisance. Although, then again, it might totally be worth it at this particular juncture in time. Having your information stolen tends to be a nuisance too, after all.
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