JACKSONVILLE, Fla. – In the wake of a data breach affecting 143 million people, Equifax CEO Richard Smith has announced his retirement. His departure from the credit reporting agency comes amid anger from consumers and dozens of federal lawmakers over how the massive data breach was handled.
If you're one of the Equifax customers affected (you can check by entering six digits of your Social Security number on its website), there are several options to protect your identity, including freezing your credit.
According to the Federal Trade Commission, a credit freeze lets you restrict access to your credit report, which in turn makes it more difficult for identity thieves to open new accounts in your name. That's because most creditors need to see your credit report before they approve a new account. If they can't see your file, they may not open the account.
Does a credit freeze affect your credit score? Experts says no, it will not.
A credit freeze also does not:
- Prevent you from getting your free annual credit report.
- Keep you from opening a new account, applying for a job, renting an apartment, or buying insurance. But if you're doing any of these things, you'll need to lift the freeze temporarily, either for a specific time or for a specific party, say, a potential landlord or employer. The cost and lead times to lift a freeze vary, so it's best to check with the credit reporting company in advance.
- Prevent a thief from making charges to your existing accounts. You still need to monitor all bank, credit card and insurance statements for fraudulent transactions. A credit freeze is a good start, but it won't protect everything. Thieves can still take control of existing accounts if they have your information.
Even when you freeze your credit, certain entities still will have access to it. Your report can be released to your existing creditors or to debt collectors acting on their behalf. Government agencies may have access in response to a court or administrative order, a subpoena or a search warrant.
How to place a freeze on my credit reports:
Contact each of the nationwide credit reporting companies:
Equifax - 1-800-349-9960
Experian - 1-888-397-3742
TransUnion - 1-888-909-8872
You'll need to supply your name, address, date of birth, Social Security number and other personal information. Fees vary based various state law, but usually range from $5 to $10.
After receiving your freeze request, each credit reporting company will send you a confirmation letter containing a unique PIN (personal identification number) or password. Keep the PIN or password in a safe place. You will need it if you choose to lift the freeze.
In a few states, credit freezes expire after seven years. However, in most states, a freeze remains in place until you ask the credit reporting company to temporarily lift it or remove it altogether. A credit reporting company must lift a freeze no later than three business days after getting your request. The cost to lift a freeze varies by state.
If you opt for a temporary lift because you are applying for credit or a job and you can find out which credit reporting company the business will contact for your file, you can save some money by lifting the freeze only at that particular company.
While a credit freeze locks down your credit, a fraud alert allows creditors to get a copy of your credit report as long as they take steps to verify your identity. For example, if you provide a telephone number, the business must call you to verify whether you are the person making the credit request.
Fraud alerts may be effective at stopping someone from opening new credit accounts in your name, but they may not prevent the misuse of your existing accounts. You still need to monitor all bank, credit card and insurance statements for fraudulent transactions.
Three types of fraud alerts are available:
- Initial fraud alert. If you're concerned about identity theft, but haven't yet become a victim, this fraud alert will protect your credit from unverified access for at least 90 days. You may want to place a fraud alert on your file if your wallet, Social Security card, or other personal, financial or account information are lost or stolen.
- Extended fraud alert. For victims of identity theft, an extended fraud alert will protect your credit for seven years.
- Active-duty military alert. For those in the military who want to protect their credit while deployed, this fraud alert lasts for one year.
To place a fraud alert on your credit reports, contact one of the nationwide credit reporting companies. A fraud alert is free. The company you call must tell the other credit reporting companies; they, in turn, will place an alert on their versions of your report.
The takeaway here is that while freezing your credit or placing a fraud alert are good steps, you need to do more. Some people are now rushing to buy credit monitoring in reaction to the breach.
Monitoring can cost from $19.95 (Experian and TransUnion) to $29.99 a month (LifeLock Ultimate Plus). Credit monitoring lets you know about changes to your credit file, but it can't stop a criminal from stealing or using your personal information for non-credit related fraud.
The best it can do is alert you to possible trouble that could result in spotting a problem earlier and reducing the amount of the loss. For example, it can spot when there's an address change or an attempt made to change the address on one of your accounts. This can be a red flag that you've been targeted by an identity thief.
Equifax is offering free credit monitoring for the next year. However, the threat from this breach will go on for much longer. If you choose to sign up, read the fine print and make a note for a year from now to make sure you don't get billed for an automatic renewal of that service.