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How To Protect Your Credit Post-Breach

We dive into the terminology and give our recommendations

The Equifax data breach, now infamous in both the headlines and the minds of many consumers, originally cited 143 million as the number of those potentially affected. In the breach, sensitive information like names, Social Security numbers, dates of birth and addresses were stolen. Now, Equifax is now saying that 2.5 million more U.S. consumers may have been impacted — bringing the total to a whopping 145.5 million people.

Because of the update — and since there are so many questions floating around about what exactly consumers should do to protect themselves — I want to take a few minutes to talk about what the best practices are. It’s all too easy to get lost in credit protection terminology — “fraud alert,” “credit lock,” “credit freeze,” and so on. But what do they each mean, and when should you apply them?

Fraud Alert

A fraud alert, as it sounds, puts a disclaimer on your credit report recommending that the creditor take an extra step to verify your identity before opening a new credit account in your name. Usually, it recommends they give you a call at a secure phone number you entered when you requested the fraud alert. What’s key is that a fraud alert still lets creditors access your credit report to make a decision about whether or not to lend to you (or, disturbingly, someone posing as you). And, although it’s recommended that you get a confirmation call, there’s no law mandating that it has to happen. Fraud alerts also need to be instated at all three bureaus individually.

Verdict: Fraud alerts don’t hurt. But they’re not a fail-safe.

Credit Lock

Experian and Transunion are now offering consumers a “credit lock,” which gives you the ability to “lock” and “unlock” your credit through a bureau’s website or app. Whether your report is locked or frozen, new creditors are unable to view your credit report at all (until you unlock or unfreeze). If your report can’t be accessed, no new accounts can be opened in your name. Locks and freezes are also similar in that they have to be applied at each bureau individually. One of the biggest differences between a credit lock and a credit freeze (we’ll talk more about it in a moment) is how you temporarily or permanently “stop” it. Unlike freezes, credit locks allow you to log in and unlock your credit online yourself. The other big difference is the price. With the credit locks on the market today, you pay a monthly fee. Experian, for example, offers an introductory price of $4.99 for the first month of a credit lock — but after that, it costs $24.99 a month. For TransUnion, it’s $19.95 a month. Equifax has said that starting January 31, it will offer free credit locks for life for consumers.

Verdict: Powerful but pricey.

Credit Freeze

With a credit freeze, you pay not a monthly fee but a transactional fee when you want to freeze and unfreeze. Costs vary by state, but generally are between $5 and $15 per freeze. If you’re wondering how much you’ll have to shell out in your own state, U.S. PIRG published an interactive map showing the different fees — and highlighting Maine, Indiana, North Carolina and South Carolina as no-fee states. Another big difference is the unlocking/un-freezing process. To un-freeze your credit, you have to use a bureau-issued PIN number that only you know, and it takes about three days to go through. “I recommend doing the freeze because I think it’s more secure because it’s more difficult to unlock,” says Beverly Harzog, credit card expert and author of The Debt Escape Plan. Carrie Kerskie, director of the Identity Fraud Institute at Hodges University, agrees, saying, “A credit freeze is the best defense against new account fraud.”

Below, I’ve included instructions for freezing your credit at each credit bureau.

  • Equifax: Go to the bottom of the page and, under “Credit Report Assistance,” click on “Place a Security Freeze on Reports.” Note that Equifax says it’s waiving credit freeze fees until November 21 of this year.
  • Experian: Under the Credit Report Assistance tab, click on security freeze, then click “Add a Security Freeze.”
  • TransUnion: You can try to do this online, but there’s some confusion about whether you need to set up an account. I found that it’s easiest to just go through the phone. The phone number for TransUnion’s Security Freeze Line is 1-888-909-8872. (It asks you to enter your current mailing zip code, then press option 3 to get through the maze. After that, it’ll ask you to enter some personal information, like your Social Security number, to get started.)
  • Innovis: Under “Personal Solutions,” go to “Security Freeze,” then submit the Security Freeze Request Online Form. By phone, you can request a freeze by calling 1-800-540-2505.
  • Verdict: Unless you’re in the habit of shuffling the deck on your loan portfolio constantly, a freeze is still the way to go.

    With Hayden Field

    Jean Chatzky

    Jean Chatzky