Keep Hackers From Damaging Your Credit Score - A Guide
Category
Awareness
Risk Level
Staying safe online in a world where data breaches, leaked customer information, and outright identity theft are daily headlines can feel like a losing battle. As customers, we implicitly trust the companies we do business with to protect our information, but there are additional steps you can take to protect yourself from the inevitable fallout of the next big hack. Among the most effective actions to take is to place a credit freeze at each of the credit bureaus. Think of it as locking your car doors, even though you’ve parked your car in the garage. In this case, it’s the credit bureaus who have the garage-door remote, but they often misplace it.
“So what exactly is a credit freeze?”
A credit freeze, sometimes called a security freeze, is a free process that allows you to restrict access to your personal credit report. As simple as this sounds, restricting access to your report makes it almost impossible for identity thieves to fraudulently open new credit accounts in your name.
In the same way that using a long, complex, unique password, along with multi-factor authentication, helps to minimize account breaches, freezing your credit report adds an additional step before establishing a new credit account. Credit issuers (e.g. credit cards or banks) are required to review your credit report before they approve a new account. If they can’t access the report because it’s frozen, they won’t be able to approve the new account request.
“I’ve heard some conflicting things about freezing my credit.”
So have we, so we’ll try to address the biggest ones we’ve heard:
“I HEARD FREEZING MY CREDIT WILL AFFECT MY SCORE.”
Not at all. Freezing your credit will not impact your score in any way, nor will it prevent your score from going up or down due to your use of your credit accounts
“IF I FREEZE MY REPORTS, CAN I STILL ACCESS MY FREE ANNUAL CREDIT REPORT?”
Absolutely! We’ll walk you through that below.
“IF I FREEZE MY REPORTS, I’LL NEVER BE ABLE TO OPEN A NEW ACCOUNT.”
Not true. Each time you would like to open a new account you will temporarily lift the credit freeze, called a “thaw.” This can be done for a set date range, or even just for a specific lender.
“I HEARD I CAN’T MAKE LARGE TRANSACTIONS IF I HAVE A CREDIT FREEZE.”
Nope. A credit freeze will not affect the regular use of your current accounts.
“I HEARD HAVING A CREDIT FREEZE PREVENTS FRAUDULENT CHARGES ON MY EXISTING ACCOUNTS.”
Unfortunately not. Existing accounts are still vulnerable to fraudulent transactions, but you can help reduce your risk by using a long, complex, unique password for every website, device, and account you own.
“I’m sold. How do I freeze my credit?”
Great! We will warn you, you’ll need to set aside about an hour to take care of this. Unfortunately, the credit bureaus regularly sell your information, and by setting up a credit freeze, you’re taking away their revenue. As a result, they don’t make this process quick or easy. But once you’re set up, it’ll be easy moving forward!
The main thing to understand here is that you will have to request a separate credit freeze with each of the three main credit bureaus: Equifax, Experian, and TransUnion. On each of the sites, you'll be looking for where to “place” or “add a freeze.” Regardless of if you call or go to their website, you’ll be asked to verify information like your name, current and previous address, date of birth, social security number, and sometimes other personal information.
A note before you begin: before you hang up or close your browser window, be sure you’ve copied, printed, or saved the unique security PIN that’s issued. At some bureaus they will assign you a PIN, and at others, you’ll set it yourself. If you want a good place to securely save it, we recommend using a password manager because they make it easy to save it securely and recall it in the future! Let’s get started:
EQUIFAX
800-685-1111
EXPERIAN
888-397-3742
TRANSUNION
888-909-8872
By the way, freezes will remain in place indefinitely. You won’t have to re-certify or do anything else. However, if you’d like to open up a new credit line, you’ll need to “thaw” your credit report so that the bank can once again view your report. This can be done for a set date range, or even just for a specific lender. Remember, you’ll need your PIN for the thaw, so don’t lose it!
“Ok, but what’s the cost?”
Free dollars and zero cents. If you’ve found yourself at a payment entry screen stop immediately. Placing and/or lifting a credit freeze is now free under federal law.
If you’ve reached a pay option, you may have encountered a service sometimes called a “credit lock.” These are paid subscription services offered by the credit bureaus that offer the same protections as the free credit freeze. You should be wary of these locks since the terms and conditions vary by company, are subject to change with limited notice or recourse, and are not governed by federal law.
“So how does all of this relate to cybersecurity?”
The world of cybersecurity is about ensuring that IT systems don’t just work, but that they work securely. In this case, a small but impactful step you can take is to protect your Personally Identifiable Information (PII). This includes things like your name, address, social security number, birthday, and even financial standing - which are all located in your credit report.
Similar to our ACT post about the difference between IT and cybersecurity, taking these steps to freeze your credit should be part of protecting your information online. Since we know that most of our PII has already. been. stolen. in. other. data breaches, you have some work to do. And when we look at the three main aspects of cybersecurity (confidentiality, integrity, and availability), establishing your credit freeze covers two of them:
CONFIDENTIALITY THROUGH FREEZING
This is about protecting your sensitive information. By limiting access to your information, you can make sure that only the right people can view it
INTEGRITY THOUGH CREDIT MONITORING AND REVIEW
This process allows you to review and ensure the information collected accurately represents accounts you actually own and use. The downside with automated data collection is countless errors that often go unnoticed and could cause harm to your credit profile. We want to trust that the credit bureaus have our information correct, but the due diligence is on you. If it has changed without your knowledge or consent, that’s an integrity issue.
“Anything else I should do?”
Yes! Freezing and monitoring your credit are a fantastic way to start, but for those of you looking to dive deeper into protecting your PII, there are more things you can do. The vast majority of the credit world relies on the big three credit bureaus, but there are a few smaller agencies where you should also freeze your credit score:
INNOVIS
800-540-2505
CHEXSYSTEMS
414-341-7445
NATIONAL CONSUMER TELECOMMUNICATIONS AND UTILITIES EXCHANGE
866-349-5185
And if you’re looking for some more things:
Monitor your actual credit reports via www.annualcreditreport.com. You can access each report for FREE once each year. This is a federally mandated website (we know, it’s pretty dated, but we promise it’s real). We recommend that you view one report every four months; that way you spread out how often you’re examining your credit. You won’t be able to see your actual score as part of this process, but you’ll be able to validate the items that go into your score. What’s great about this method is it’s FREE. As a result, you don’t need to pay for credit monitoring services - which are obsolete if you’ve frozen your credit anyways because no one will be able to open any new lines of credit!
Remove your name from all those pre-approved offers via www.optoutprescreen.com/
Cut down on the junk postal mail you receive via www.thedma.org/accountability/dma-choice/
Still worried about protecting your PII? Our Vulnerability Assessment is a comprehensive analysis, strategy, and implementation that can help secure your online identity. Contact us today to learn more about how we can help you and your family stay secure in the digital age.
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