Big List of Ways To Protect Your Credit: Free Credit Monitoring, Credit Locks, Fraud Alerts, and Credit Freezes

eq_hackAs you probably know, Equifax was hacked and literally half of all Americans could be affected. It seems like every media outlet has a “what you should do now” article, but I’ve also gotten some e-mails asking for my personal take (for which I’m flattered). Here goes…

Free credit reports. Everyone should take advantage of the free copy of their credit reports (Equifax, Experian, TransUnion) and their bank report (ChexSystems, TeleCheck) available every 12 months. I would also add LexisNexis to the ones I personally check. This free access is mandated by the government. Here again is my Big List of Free Consumer Reports.

Free credit monitoring. There are many offers nowadays for free credit scores and partial snapshots of your credit report. These are provided by private services, either in partnership with or as a subsidiary of the major credit bureaus. In addition, some offer credit monitoring, where they will e-mail or text you when a significant change occurs (new accounts, etc). I choose to take advantage of this, knowing it is in exchange for some ads. Here’s a recipe for credit monitoring coverage across all three major bureaus:

Free credit locks. The credit bureaus now have a feature that allows you to instantly “lock” and “unlock” the credit report of a specific credit bureau and thus prevent access. These are nice because you can unlock it for a day or so when you need, but otherwise keep it locked. Again, if they are free, they are probably supported by ads and/or upsells (which is fine by me, I will stick with free).

Free 90-Day Fraud Alerts. If you are concerned that your personal information is compromised (you should be!), you can contact any one of the three major credit bureaus and ask for a “Fraud Alert” to be placed on your credit report. This lets all potential creditors know that you are at high risk and that they need to do extra identity verification. Be sure that they have your current contact information as they will call you every time someone tries to check your credit report.

This is free of charge. It will expire automatically after 90 days, but you can call in and renew by submitting a new request within 30 days of your current alert expiring. (If you are a documented victim of identity theft, you can ask for an Extended Fraud Alert of up to 7 years.) By law, you should only need to contact one of them, and they are supposed to contact the other two companies and thus have the Fraud Alert active on all three accounts. Taken from FTC.gov:

Credit Freezes (Fees may apply). This is the most comprehensive but also tedious and potentially-costly measure to take. Once you initiate a credit freeze, it will stay on there permanently in most states (or at least 7 years in others). In order for a business to check your credit report, you must manually “unfreeze” your credit temporarily. To initiate, this may cost around $10, but Equifax is waiving this fee for the next 30 days. Temporary unfreezing may cost another $5 to $10 each time, depending on your state. Finally, it may cost another ~$10 to lift the freeze permanently. Now possibly triple those fees, because you have to pay separately for each bureau. Here is the Equifax fee schedule by state [pdf]. If you are a documented ID theft victim with police report, fees may be waived. You can do this online, snail mail, or by phone. You must contact each credit bureau separately.

My take. That’s the menu; I would start at the top and pick what works for you. I tend to open a relatively high number of credit and bank accounts throughout the year, often for a time-senstive promotion, so I choose to decline the extra hassle and cost that comes with a credit freeze. If you rarely get new accounts or simply feel otherwise, go more extreme. I initiated a free 90-Day Fraud Alert this week to try it out (through Equifax since they should do the extra work).

eqalert_sample

I already access my credit reports/ChexSystems/LexisNexis every 12 months, and I continuously monitor my own credit using the services listed above. Here’s a sample free alert I got from CreditKarma just the other day.

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I then cross-referenced with a similar free credit monitoring alert from CreditSesame (TransUnion) that included more info like date and card issuer:

cs_sample

By the way, yes I decided to set up the free TrustID Premier service for the free Equifax locks. I know there was a lot of concern about the forced arbitration clause as part of TrustedID, but Equifax has since removed that clause. Also, I didn’t like how they made me come back to activate (without any reminder). Of course, even after being patient and coming back on my assigned date, they are making me wait some more…

trustid_sample

Comments

  1. i’m with you on credit freezes, we need more regulation on who gets to keep all your personal info, whether it’s equifax or beenverified and a dozen of such copy cats.

  2. I recently learned that my credit union provides ongoing free fraud alerts. So in addition to signing up with the Equifax’s 90 day (which supposedly contacts the other 2) I now I have a buffer with a 3rd party to avoid having to sign up again when my 90 days expire. Since I open accounts regularly for promos, freezing is not a viable option for me. Thus, in addition to monitoring my open card accounts, I have gone to credit card websites and placed fraud alerts on each card.

    I recently learned that if fraud does happen the consumer is only obligated if at all for a minimal amount. The key is to look over statements and check for small amounts posted. Since this breach is so large , banks and credit card companies systems are geared to trigger major purchases. However if a thieve places 1 million small purchases he /she can slip by and become a wealthy thieve!!!

  3. Credit freezes are not worth the hassle or cost. Maybe if you never apply for new credit but for the rest of us who credit card churn it’s a pain.

  4. Of course Jonathan is always much too gentle and forgiving when it comes to dealing with a menace to society like Equifax. How about putting your energy into demanding that the corporate charter of Equifax be revoked and dismantle the corporation all together. Only the State Attorney General of Georgia can do that. His name is Christopher Carr. His number is 404-656-3300. Unlike the Dept. of Anything_But_Justice in DC an actual person will pick up the phone.

  5. I’ve signed up for TransUnion’s TrueIdentity, which offers their Credit Lock service. I’m wondering if it’s different than a credit freeze. Here’s what TransUnion says about Credit Lock:
    Creditors, lenders (when you apply for a loan), landlords and employers can request and view your credit report.
    Locking your TransUnion Credit Report blocks others from looking at it, which may serve as a critical step in preventing an identity thief from applying for credit in your name.

    So my question is: Is this the same as a credit freeze, or different?

    • I would refer you to Brian Krebs’ reporting on this issue (Krebs is essential reading if you are at all interested and/or concerned about cybercrime, which everyone should be these days):

      https://krebsonsecurity.com/2017/09/the-equifax-breach-what-you-should-know/

      Q: I see that Trans Union has a free offering. And it looks like they offer another free service called a credit lock. Why shouldn’t I just use that?

      A: I haven’t used that monitoring service, but it looks comparable to others. However, I take strong exception to the credit bureaus’ increasing use of the term “credit lock” to steer people away from securing a freeze on their file. I notice that Trans Union currently does this when consumers attempt to file a freeze. Your mileage may vary, but their motives for saddling consumers with even more confusing terminology are suspect. I would not count on a credit lock to take the place of a credit freeze, regardless of what these companies claim (consider the source).

  6. The initial fraud alert can be renewed after 90 days. Can you continually renew it, or is it a one-time thing? I’m not able to find any documentation on that.

  7. The new Experian Identity Works service at $9.95 or $19.95 per month will allow you to lock your Experian report.

  8. Jonathan, long time reader, first time poster! Would be curious to hear more about what some of the possible negative effects are for individuals due to a breach like what happened with Equifax. It may be “obvious” but I rarely see hard reporting on what can happen to you. So now someone has my social security number, so what? They have my last seven years of addresses… ok? Even my drivers’ license… maybe they will go pay my annual car registration or speeding tickets?! What can someone with bad intentions realistically do with this information or combinations of this information? Appreciate your insight!

    • That’s a good question. Some quick thoughts – They could basically impersonate you and do anything you might do. For example, (1) file a false tax return early and get the IRS refund sent to them, (2) file for Social Security or other governmental benefits and get that money sent to them, (3) borrow some money in your name and get the money sent to them. When applying for these things, they may ask ID verification questions online or by phone. If they know your old addresses and SSN, they can pass the ID checks. Now, you may not be liable for any or all of these things, but it could still be big hassle to unwind.

  9. Very helpful post, thank you. I am still trying to sort out my strategy. I started filling out the free Transunion TrueIdentity and when it asked me for my cell phone number, I balked. Not in a mood to give another credit agency more personal info right now…

    • First of all, TransUnion probably already has it. As one of the Big 3… that’s why we’re in this mess! Second of all, you don’t have to give your primary cell number to them. I don’t think they’ll need to call you. There are also ways to get a free alternate number, including Google Voice.

    • Try giving a fake number or leaving it blank. I don’t think it matters for the process.

  10. For people really interested in taking action you may want to consider:

    https://www.legalist.com/equifax/

  11. A solution to identity theft is to change authentication procedures so that our personal data is useless to criminals. Companies need to assume that our SSN, birthday, address, phone number, etc. is public info. Even if that means going back to paper and ink signatures.

  12. Tammi Marie says:

    How do you feel about identity theft insurance that you pay a monthly or yearly cost for?

    • I’m personally not a big fan of paying money for identity theft insurance. I can do most everything the firms can do myself with the free services listed above (by the way, Credit Sesame also offers free ID theft insurance).

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