The 5 Different Ways To Address Identity Theft
November 14, 2017The only silver lining I can think of to the Equifax breach is that it has expanded awareness of credit fraud, moving people to look for ways to protect their credit. But for many, the options to protect your credit may seem overwhelming. Ultimately, the best option is the one you will actually do and one that gives you peace of mind. As you start searching for options, you can use the following as a guide to help you make the most informed decision:
Credit Freeze: A credit freeze, sometimes called a security freeze, restricts who can access your credit report. This, action can help prevent new credit from being opened since most creditors will want to view your credit report prior to opening a new line of credit. Existing creditors and collection agencies can still access your credit. One thing to note: a credit freeze only applies to getting new credit. Your existing credit may still be susceptible to fraud.
Generally, a credit freeze may be ideal for someone who is already a victim of identity theft and/or someone who has no plans to apply for anything requiring a credit check. To place a credit freeze, you must contact each credit reporting agency – Equifax, Transunion and Experian. The cost associated with the credit freeze varies by state. Look for you specific state information here. In most states, the credit freeze stays on your report until you contact the credit reporting agency to temporarily or permanently remove the freeze, while in other states, the credit freeze will expire after a set number of years.
You may need to “unfreeze” for these events
Keep in mind that if you do a credit freeze, the freeze applies to any request that may require your credit report being pulled such as switching phone carriers, renting an apartment, getting utilities turned on, a background check for employment, or even changing insurance carriers. You can unfreeze your credit report temporarily though. The cost to temporarily remove a credit freeze varies by state.
Fraud Alert: Fraud alerts are less restrictive than a credit freeze and are free. A fraud alert places a notice on your credit report to creditors to take additional steps, like verifying identity, prior to issuing credit. Since a creditor may call to verify your identity, it’s important to make sure your contact information with credit reporting agencies is current. Unlike a credit freeze, you only have to request the alert at one credit reporting agency and that agency will contact the other agencies. Typically, the alert will be forwarded within 24 hours.
The initial alert lasts for 90 days. If you are a victim of ID theft, you can extend the fraud alert for 7 years. In order to file an extended fraud alert, you must generally file an identity theft report.
If you are in the military, you can request an active duty alert. This type of alert stays on your credit report for one year. Even better, bureaus will remove your name from pre-approved credit offers for 2 years. You can even renew if your deployment lasts longer than one year. You will have to provide proof of identity in order to get an active duty alert.
Credit lock: Similar to a credit freeze, a credit lock will prevent your report from being viewed and prevent new credit from being opened. The big difference is that a credit freeze is under state law and a credit lock is under a contractual obligation between you and the company locking your credit. An article by Consumer Reports suggests that a contractual agreement may not be as strong as having protection under the law.
With a credit lock, you can receive alerts from credit bureaus if someone applies for credit in your name and you can unlock or lock your report immediately. You have to sign up for a credit lock at all three reporting agencies. The price for a credit lock varies with each credit reporting and monitoring agency. One thing to note, your credit lock is based on the contract you sign with the credit reporting agency so you want to read your contract carefully to make sure the service you want is actually the service you are getting.
Credit Monitoring: Credit monitoring is periodically checking your credit, looking for signs of fraud and identity theft. You can self-monitor by pulling up your credit report for free and checking it. Be honest with yourself though. If you know you are not going to diligently monitor your credit yourself then consider a credit monitoring service or at a minimum, placing alerts on your accounts.
You can step this up a notch by signing up for free alerts at your financial institutions. These alerts are worth their weight in gold. We have alerts on all of our accounts and were immediately alerted of suspicious activity which turned out to be fraud. Because we found out as soon as it happened, we were quickly able to resolve the fraud and have the funds returned to our account.
Beyond free
If you want more comprehensive credit monitoring, you can sign up for a service. Contact your bank and creditors for credit monitoring services. But before signing up, do your research. Compare different plans to ensure you are getting your desired level of monitoring.
One important thing to note: these services alert you if you may be a victim of fraud. They do not prevent it. The key is the earlier you are aware of possible identity theft, the quicker you can stop any further theft.
Identity Restoration Services: Credit freezes and alerts makes it harder for criminals to steal your identity, credit monitoring alerts you if your identity may had been stolen and identity restoration services clean up the mess after identity theft. Typically, a counselor walks you through the process of dealing with creditors after your identity has been stolen. The level of help you get depends on your contract. Identity theft recovery may be ideal for someone who recently experienced a home invasion, auto theft, or anything in which your personal information may had been compromised.
As with everything, do your research, compare different programs for level of service, cost and customer reviews. If you are thinking of getting identity theft restoration services, consider asking the carrier of your homeowner/rental insurance for coverage. If coverage is not offered, ask if it can be added.
Ultimately, you are your best defense. Shredding documents with your personal information, carrying as few documents with personal information on you as possible, safeguarding personal information at your home, having two factor authentication for online banking, emails and any accounts with sensitive information, and choosing passwords that are difficult to hack is the first line of defense. These steps along with the options listed can go a long way to safeguarding your identity.
This post was originally published on Forbes.