Everything You Need to Know About a Credit Freeze
First, think twice before signing up for Equifax's free credit monitoring , which waives your right to sue them for the breach. You can do this yourself. Monitor your own credit from all three bureaus annually at annualcreditreport.com and there are a number of free tools and services that can help you keep tabs on your credit, too. We've told you how to read and decipher your report once you get your hands on it.
You do, however, want to put a freeze on your report - and possibly a fraud alert.
What Is a
A freeze restricts access to your credit report , making it impossible for a thief to take out lines of credit in your name (unless they hack your PIN, we'll get to that). When you put a freeze on your report at a credit bureau, that bureau won't release your report when a company requests to pull it. Let's say a thief steals your Social Security number and applies for a line of credit with Chase bank. If you've frozen your report, Chase will try to pull your report only to find it's frozen. Thus, the thief can't open a new account.
In fact, even outside of this whole Equifax fiasco, you might consider a freeze as a preventive measure. Forbes explains :
"Someone who isn't looking to borrow money may want to freeze their credit for security purposes. A good candidate would be someone who owns their home or is a long-term renter who doesn't plan on making a new car purchase or obtaining new credit cards in the near future."
According to the FTC, a freeze doesn't affect your score, so there's no need to worry about that. Also, you can still get your free annual credit report with a freeze, so monitoring your credit isn't an issue, either. While a freeze prevents new lines of credit, it doesn't do anything to protect thieves from charging an existing line of credit, though, so you still want to monitor your credit activity .
Of course, when you do want to take out a new line of credit, you'll need to "thaw" your freeze before you apply.
A Freeze Isn't Foolproof
When you put a freeze on your report, you get a PIN that you'll use whenever you're ready to thaw your freeze. This PIN allows you to freeze and unfreeze your report at your discretion. There's just one problem, as the New York Times explains :
"A security freeze doesn't protect you if the thieves break into the vault of the company that maintains the freeze. That's what happened here, and we will now spend years seeing what happens next."
Equifax's system for generating "random" PINs was highly problematic, too:
Security blog Naked Security explains why this is an issue :
The PINs are 10 digits long. If Equifax chose numeric PINs at random the crooks would have a one in ten billion chance of guessing the right number on the first go (that still wouldn't count as a strong password by the way, but it's not bad).By using dates Equifax have slashed the odds on a successful guess.
Equifax has since updated its system to generate more random PINs, but the problem remains: if hackers break into the right vault, which is a thing that's already happened, they can access your PIN. That's not to say you should skip the freeze, it's just something to keep in mind.
How to Freeze Your Reports
The process for freezing your report is pretty easy, but unfortunately, you may have to pay a $5 to $10 fee to freeze your report with each bureau. Here's where you can go to sign up for a freeze at each of the three major credit bureaus:
You can also give them a call:
If you're in the process of applying for a loan, check with your lender or servicer to see what they recommend. They should be able to tell you if they've already pulled your report, in which case, you can go ahead and place the freeze, or when they plan on pulling, so you know when to thaw. I'm in the middle of refinancing my house, for example, and my servicer instructed me to go ahead and freeze my report.
Consider a Fraud Alert, Too
A fraud alert is another option to consider (and it's free) in addition to a freeze. With a fraud alert, your credit report is flagged, and creditors and lenders must take added 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," the FTC explains. And there are three types of alerts available, according to them :
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.
The good news is, you don't have to request a fraud alert at every bureau. Experian explains:
"When you request a fraud alert be added with any of the three major credit bureaus, the bureau you contacted will notify the other two and alerts will be added with those bureaus as well. A fraud alert or initial security alert will warn lenders that you may have been a fraud victim. This extra precaution will notify the potential lender that they should contact you before granting any new line of credit in your name. This fraud alert will stay on your credit report for 90 days. You can renew the fraud alert when it expires."
Here's where to go if you want to place a fraud alert on your report:
Again, you only need to set the alert with one company and then they should notify the rest. Ideally, you'll do both a freeze and a fraud alert. In case a thief finds a way to get past the two-step verification, you'll still have a freeze on your report, which provides one more barrier to entry.