I actually found out about the Equifax data breach on Twitter (because, you know, that’s where I get all my news), and while many brushed this off as another case of potential identity theft in a time of many, I knew it was so much more than that. And it got even worse when I verified that I was one of the 143 million people who had had their information compromised. Oy vey.
Major data breaches have happened in the past as it’s becoming the attack style of choice for our generation. Just within the past decade, information was stolen from all of the following companies. And this isn’t an all-inclusive list.
However, what was so distinct about the Equifax data breach was the fact that they weren’t just stealing your name, address, and credit card numbers, but your social security number, birth date, and potentially even your driver’s license number as well. And as those don’t change often – I mean, the government can’t issue you another social security number like Target could issue you a new Redcard – it means that hackers got their hands on some very important information that they could use for years. And ladies & gents, that should scare you a little bit.
WHY PROTECTING YOUR CREDIT IS SO IMPORTANT
Short answer: Because it could save you a ton of money and stress.
Long answer: If someone has access to your personal information, it means they could use that to open a credit card, take out an auto loan, or file a fraudulent tax return under your name. And when it’s under your name, it means YOU are liable for it.
For instance, let’s say your identity is stolen without your knowledge, and they use that info to purchase a brand new Jeep Grand Cherokee with all the bells & whistles. Off they drive with their new $60K whip, and when the 1st payment is missed, then the 2nd, and then the 3rd, the lender starts calling YOU for the money. Um, what Jeep?
Yes, while it may be a surprise in your eyes, they thought they were lending to you, which makes you liable. Not only that, but those months of non-payment are dinging your credit score, too. Double whammy. And straightening it all out can be a major headache that drags on for months or even years.
Essentially something you want to avoid. At all costs.
HOW TO PROTECT YOUR CREDIT
Luckily I had read an article from Pete the Planner a year or two ago about the importance of freezing your credit, and because I had done this, I felt a little less worried than many likely did when the news of the Equifax breach came out. Why?
Well, when you freeze your credit, you are blocking anyone, including yourself, from opening a new line of credit (like applying for a new credit card or auto loan or mortgage) under your name. This means that when the identity thieves would have tried to take out the loan on that Jeep, they would have been rejected because the lender wouldn’t have been able to access your credit score/report. You are essentially blocking anyone from pulling this info, and because most loans require you have it before they’ll lend you money, it protects you in cases like these.
This was especially important in the Equifax breach because ladies & gents, this happened two months ago. Yes, that’s two months where our information was exposed without our knowledge, two months where our financial situation could have been compromised, two months for the CEOs of Equifax to sell their stock and get out with major $$$ before the news broke. I don’t know whether to be fearful or livid. Ok, I choose livid. But that's not going to help me or you here, so let's get to how to mitigate the damage.
[RELATED: 7 Tips to Increase Your Credit Score Quickly]
WHERE TO OPT-IN FOR A CREDIT FREEZE
You can freeze your credit with each of the three credit bureaus using the links below, and you MUST do this on ALL THREE. Most lenders only pull reports from one credit bureau, so it’s not going to help you if you freeze your account with Equifax only to find the lender those identity thieves scammed pulls solely from TransUnion.
Note, based on where you live, there may be fees involved in freezing your credit. For all of you in my home state of Indiana, it is absolutely 100% free to both freeze and unfreeze your credit with all of the credit bureaus, so it’s really a no-brainer. For the rest of you, I highly suggest shelling out the money for it anyway (they'll probably run you less than $10 each), especially if you don’t foresee yourself taking out any additional loans in the near future. It may seem like an unnecessary cost now, but you’ll be cursing yourself if someone ever does call you about those $5,000 in past due payments on a Jeep you know nothing about. And avoiding that scenario is worth skipping your usual Starbucks run for a couple of weeks.
CAN I STILL USE MY OUTSTANDING CREDIT LINES?
Yes. Freezing your credit should have no impact on any of your outstanding student/auto/home loans or your ability to use the credit cards you currently have in place.
WHAT IF I NEED TO PULL A CREDIT REPORT?
Have a freeze on your account but now are looking to apply for an auto loan or mortgage or even a store credit card?
No worries – just go back to those same links previously listed for freezing your credit and thaw them out for a bit.
If you know a lender is going to be looking at your credit report, you can choose to unfreeze your account for a short window of time so that they can pull the report. You set the date range you want this to be open (I suggest sticking to 1-3 days if possible), and it will automatically freeze itself again once that time slot expires.
You can even request to know which credit bureau your lender is pulling from so that you only need to unfreeze that one – this will keep you protected with the other bureaus during that short time. Communicate your window to your lender so they know they have a deadline, and you should be able to mitigate any risk fairly well.
[RELATED: How Your Credit Score Can Save You Thousands]
ARE YOU 100% PROTECTED?
Unfortunately, no. Cue the sad music.
Some items, like getting medical treatment or filing your taxes, don’t require any credit information prior to incurring them, which means you are still somewhat at risk.
So how to lessen this? For one, file your income tax returns as early as possible each year. The longer you wait, the more time someone else has to file a return with a big refund on your behalf, and God only knows how long it will take to get that mess straightened out. I mean, it is the government.
Secondly, continue to monitor your credit report. You can pull this once a year from each of the bureaus, so every 4 months, plan to review this at one of them. Comb through the report and see if you notice a loan or history on there that doesn’t belong to you. If so, you must submit a dispute in writing to that specific credit bureau (you can get a sample letter here).
HOW LONG WILL I NEED TO MONITOR MY SITUATION?
Is forever long enough? Unfortunately, hackers can keep this information for years, and because you never know when they are going to attack, you have to be vigilant in protecting your credit. Not the best news, I know, but it’s better to be proactive than reactive in this situation.
I know I’m making this seem daunting, as if the sky is falling, but DON’T WORRY. Your credit is frozen, you’ll be monitoring your reports every few months, and filing your tax return early. Three easy, completely bada$$ ladyboss moves to protect your money. You’ve got this.