In 2024, data breaches like the record-breaking National Public Data breach affecting 2.7 billion individuals, the Ticketmaster breach exposing 560 million people, and the AT&T cyberattack impacting 73 million customers serve as stark reminders of the importance of monitoring your credit.
These incidents reveal how increasingly sophisticated cyberattacks can compromise sensitive information, leaving individuals vulnerable to identity theft and fraud. In this post, we’ll discuss simple, effective steps you can take to safeguard your financial security in the face of these growing threats.
Credit Freeze:
- What It Is: A credit freeze, also known as a security freeze, is a free service that restricts access to your credit report. It prevents creditors, lenders, or anyone else from accessing your credit without your permission, making it harder for identity thieves to open accounts in your name.
- How It Works: Once a freeze is in place, creditors cannot pull your credit report until you "thaw" or lift the freeze. This adds a layer of protection but requires additional steps when you want to apply for credit.
- Cost: Free (this is by law in the US).
- Availability: Available through all three major credit bureaus (Equifax, Experian, and TransUnion).
- Convenience: Requires creating a PIN or password that you will use to unfreeze your credit when necessary. It may take a few days to lift the freeze.
Credit Lock:
- What It Is: A credit lock is a more flexible and often app-based service that allows you to easily lock and unlock your credit report using a mobile app or website.
- How It Works: Like a freeze, it prevents lenders from accessing your credit, but it can be turned on and off more quickly. However, a lock may be tied to paid services from credit bureaus.
- Cost: May be free or come with a fee (depending on the credit bureau and if bundled with other services).
- Availability: Also available through the three major credit bureaus.
- Convenience: Easier and faster to unlock than a freeze, but not as tightly regulated.
Main Steps for a Credit Freeze:
- Contact the Credit Bureaus: You need to request a freeze from each of the three major credit bureaus individually:
- Provide Your Information: You'll need to provide personal information like your name, address, Social Security number, and date of birth.
- Create a PIN or Password: Each bureau will give you a unique PIN or password that you'll need to temporarily lift or permanently remove the freeze.
- Freeze Confirmation: The bureaus will confirm when the freeze is in place.
- Lifting the Freeze: If you want to apply for credit, you'll need to temporarily lift the freeze by providing your PIN/password. You can do this online or over the phone, and it may take up to a few business days to lift.
In addition to reviewing transactions on your accounts and potentially doing the credit freeze, you can also monitor your credit score for any significant changes.
If you are looking for ways to monitor your credit score that are free and don’t impact your credit score, here are some options (I personally do #4):
- AnnualCreditReport.com: This is the only official site authorized by federal law where you can get a free credit report from the three major credit bureaus (Equifax, Experian, and TransUnion). You're entitled to one free report from each bureau every 12 months.
- Credit Monitoring Apps: Many services like Credit Karma or Credit Sesame provide free credit reports and updates. These services offer reports without impacting your score, as they use a "soft inquiry" to access your credit data.
- Directly from Credit Bureaus: Some credit bureaus may also offer free credit reports if you request them directly.
- Directly from your Credit Card Company: Many credit card companies offer free access to your credit score as part of their service. Typically you sign up for the free service and your credit card company will send you a monthly or quarterly update on your credit score viewable in their app or through email.
In today’s digital world, protecting your financial well-being starts with monitoring your credit. By keeping a close eye on your credit score and using tools like credit freezes or locks, you can proactively block unauthorized access to your financial information and prevent potential damage before it starts.