In September 2017, credit bureau Equifax had a security breach that exposed the identifying information of 143 million Americans.

Exposed information included Social Security numbers, birthdays, addresses – all information that could be used to open credit cards and other accounts in someone’s name.

This blog post covers some actions you can take to protect your identity from fraudsters.

What is My Credit Report?

Your credit report is a summary of:

            1. Accounts (e.g., credit cards, loans) open in your name

            2. And your payment history on each of those accounts

Experian, Transunion, and Equifax are the three major credit bureau companies in the US that generate credit reports.

Lenders (e.g., banks, credit companies) rely on your credit report to determine whether they think you will repay them before issuing credit to you.

Why Does My Credit Report Matter?

Your credit report matters because lenders (e.g. banks, credit card companies) check your credit report before opening accounts in your name.

Usually, you must provide identifying information (e.g., SSN, birthday, driver’s license number) before a lender can access your credit report.

Identity theft typically happens when a fraudster steals your identifying information and pretends to be you to open accounts in your name.

What is a Fraud Alert?

Say that you’re applying for a mortgage loan. After you provide the loan application, the lender will use your identifying information to access your credit report and determine if they want to lend money to you.

In the normal case, once the credit bureau computer systems matches your identifying information (e.g., SSN, driver’s license, birthday), the credit bureaus will send over your credit report to the lender.

If you put a Fraud Alert in place with a credit bureau, the credit bureau will attempt to contact you before releasing your credit report.

When credit bureau contacts you, they will realize that a fraudster tried to access your credit and refuse to release your credit report. You can then find out which lender asked for your information and you can call the lender and tell them not to open an account in your name.

What is a Credit Freeze?

A Credit Freeze completely shuts down access to your credit report.When a lender tries to access your credit report, it will be told that it cannot access your credit report. The freeze remains in place until you remove it.

A credit freeze is a good tool for someone very concerned about identity theft. The downside of a credit freeze is that if you need to apply for credit in the future, you will need to unfreeze your credit report before you apply for credit.

If you freeze your credit, you receive a PIN that you will need to unfreeze your credit report. Keep that PIN information in several places so you can find it when you need it!

If I Want a Fraud Alert or Credit Freeze, How Do I Put It in Place?

Go to the website for each of the three credit bureaus and request the Fraud Alert or Credit Freeze that you want.

What Is Credit Monitoring?

Credit monitoring is a service, typically on a monthly subscription, that sends you an email any time there is activity on your credit report such as:

            1. Credit inquiry

            2. New account openings

Credit monitoring helps you because if you get an email notification for a credit inquiry or account opening you don’t recognize, you can call the lender and let them know they are dealing with a fraudster.          

The three major credit bureaus each offer their own credit monitoring service.

When choosing a credit monitoring service, be sure the service checks all three of your credit reports.

Reason: lenders may only check one of your credit reports before opening credit in your name. If your credit monitoring service only monitors one of your three credit reports, you may not be notified of the credit inquiry.

How Can I Get a Free Copy of My Credit Report?

Go to the website www.annualcreditreport.com

This website was mandated by a federal statute. You can get one free credit report from each credit bureau once a year from the website.

The website may ask you to pay an optional fee to access your credit score, but you can decline to purchase your credit score.

How Should I Protect My Existing Accounts?

Check your monthly statements. Call your account custodian immediately when you see charges or activities that look fraudulent to you.

If you have online access to your accounts and you are tech-savvy, turn on “two-factor” authentication for your accounts, if available.

Each time you try to log onto one of your accounts, the account custodian will request code sent to your cell phone in addition to your normal password. This means that a fraudster needs to have both (1) your password and (2) your cell phone texts before accessing your accounts.

Next Steps

For more detailed information on protecting your identity we recommend checking out the guidance from the Federal Trade Commission.

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