Consider freezing your credit in light of Equifax security breach
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The Equifax credit breach is one of the most troubling security lapses to ever happen. Credit bureaus keep records of all of your credit transactions. They list what accounts you have, your payment history and many other facts. New potential creditors check these records when you apply for new credit. Information in your credit file helps to determine if you get the loan and what rate of interest you will have to pay.
Equifax is one of three major credit bureaus. Your files at each bureau are very similar, but not necessarily identical. This is because some creditors only report your results to some of them. Your credit score not only is used to determine if you qualify for a loan. Sometimes it is used to determine if you will be hired for a job. That’s because companies want employees who are financially responsible. Sometimes the credit score is also used when you apply for insurance.
Everyone should regularly review their credit files. The official government website to do this is www.annualcreditreport.com. There is no cost to do this every 12 months. You can see all three major credit reports, and if you find mistakes such as accounts you did not open, you can have the removed. You cannot remove negative information about your credit if it is factual. Reviewing credit files should be an annual event, even if the Equifax crisis had not happened.
Most people should also place a credit freeze on all three of their credit files immediately. A credit freeze helps anyone from opening new credit in your name until you unlock it. If you will not need to open something in the next few weeks such as to buy an auto or real estate, you should probably should lock your credit down.
A credit freeze does not prevent you from using existing credit. Your credit cards and other credit lines will stay in place and continue to function, but no new accounts can be opened by criminals trying to establish new credit in your name.
142 million people had their most sensitive personal information such as Social Security number, date of birth and other such information that thieves would love to get their hands on. This information is readily available in your Equifax credit file.
You need to file the freeze at all three bureaus because some potential creditors do not check all three. This may cost you $10 for each one; it could also cost you the same amount to unfreeze. Congress and a large group of state attorneys general are trying to take actions to remove these fees. That could take time, so don’t wait. You can freeze by telephone or online. Equifax: 866-349-5191/www.freeze.equifax.com; Experian 888-397-3742/www.experian.com/freeze; TransUnion 888-900-8872/www.transunion.com/credit-freeze/place-credit-freeze.
Credit monitoring does not protect you from this situation. It just alerts you after someone has stolen your identity. A fraud alert offers a little more protection than credit monitoring but does not provide full security. It requires the business to alert you if someone is trying to open a new account for verification. It expires and must be renewed every 90 days.
A credit freeze offers your family the best protection. Remember, family members might have individual credit files that need to be protected.
Do it today.
Gary Boatman is a Monessen-based certified financial planner and author of “Your Financial Compass: Safe passage through the turbulent waters of taxes, income planning and market volatility.”
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