Topics:Identity Theft 101
Guest Post by Kayla Matthews
In this age of massive data breaches, identity theft is arguably more likely now compared to when people did not share their information so freely online. One of the precautions you can take to protect against identity theft is to activate a credit freeze. Here's a breakdown about what that means, plus what else you can do to keep your identity safe.
A credit freeze, also known as a security freeze, closes access to your credit report. Then, it's harder for people to fraudulently open new accounts in your name. Creditors generally want to see your credit report before finalizing any agreements related to new accounts. If they can't, they likely won't let you, or any person who stole your identity, proceed with creating an account.
Freezing access to your credit report requires separately contacting each of the three main credit reporting bureaus. Whether you do so by phone or online, the process involves answering some questions to verify your identity, such as giving your name, birth date, and social security number.
Some people may remember applying for a credit freeze a while ago and cannot recall if it's still in place. If you're in that situation, the credit reporting bureaus offer various ways to check, including by calling phone numbers and logging into online interfaces.
After receiving your request to freeze your credit, a credit reporting bureau may provide you with a PIN. You'll need it to lift the credit freeze at any point in the future. However, if you did not get a PIN, the process of unfreezing your credit typically requires logging into a dedicated portal and providing your username and password, plus answering questions to prove your identity. You can also initiate a lift over the phone or by mail.
People who did receive PINs but lost them still have several options to pursue. However, the specific process you go through for regaining the access that lets you lift the freeze varies with each credit reporting agency.
Remember that a credit freeze restricts access to your account. That means if you want to apply for a new credit card, for example, you'll need to lift the freeze temporarily. There is no charge to do it and no impact on your credit report.
Additionally, a credit thaw is a long-term choice for unfreezing credit. People who may need to open several new accounts in a relatively short period, such as after a move, may find that option is best for them. The steps you take for thawing a credit freeze are the same as for a shorter lift.
If you request a credit freeze lift over the phone or online, representatives will do it within an hour of hearing from you. In contrast, when you initiate a request by mail, they'll take care of it within three days of receipt.
Credit freezes can sometimes provide people with a false sense of security. They only make it harder for people to open new accounts and don't impact existing ones. Moreover, pulling information from applicants' credit reports is something most creditors do, but it is not a requirement. Due to those limitations, some people opt to initiate fraud alerts instead.
A fraud alert requires potential lenders to take extra identity verification steps, usually by asking the applicant to consent to a phone call or face-to-face meeting. Fraud alerts last from one to seven years, depending on the type you opt to request. Unlike a credit freeze, you only need to contact one of the three credit reporting bureaus to place a fraud alert. Current law in the United States requires the entity you communicate with to reach out to the other two.
Moreover, consider whether a credit lock suits your needs. A lock serves the same purpose as a credit freeze, but you can deactivate it with an app. However, whereas state laws govern credit freezes, the credit lock specifics get spelled out within a contract between you and the credit bureau. Most entities that provide credit lock services charge monthly fees, too. A credit freeze is generally better than a lock, but it's still smart to know about both.
It's also worthwhile to activate two-factor authentication (2FA) on your bank accounts and any other websites you access that could give people sensitive information they may use to impersonate you. 2FA is an effective identity theft measure because it means that your username and password are not enough to grant access. A person must also have another piece of information — often a temporary code sent to a smartphone — to get into an account.
Finally, examine your bank statements, regularly and check your credit report at least once a year for suspicious activity. Federal law in the United States allows residents to get free copies of their credit reports annually. However, many credit card companies offer credit monitoring that shows how your credit activity and overall score differs from month to month. Staying aware of any changes could help you spot identity theft evidence early.
Identity theft is a scary prospect. While there is no guaranteed way to safeguard against it, understanding your options and selecting the right precautions for you can give valuable peace of mind.
Kayla Matthews, a tech and security journalist, has written articles for sites including WIRED, Information Age, Security Boulevard, and the National Cyber Security Alliance. To see more of her work, follow her on Twitter @KaylaEMatthews or check out her tech blog, Productivity Bytes.