You're probably aware that Equifax, the credit reporting agency, suffered a security breach this summer. The lapse, which was announced last week, exposed at least 143 million people's personal data. Now, consumers worry how this event will affect their credit and private information.
What happened at Equifax
According to the Federal Trade Commission, hackers had access to Equifax's database from mid-May until July of this year. During that time, these criminals could retrieve the following about Equifax customers:
Social security numbers
Driver's license numbers
In addition, 209,000 people may have had their credit card numbers stolen.
Any way you look it, consumers have cause for worry.
So, what can we do to protect ourselves?
Are you at risk?
The first thing you should do is find out if your information got hacked. To do this, visit the Equifax website set up to help customers with this issue. Click on the "Potential Impact" tab to enter your name and the last six digits of your social security number. The search shows if your information was potentially compromised.
If your data got hacked, it's time to act quickly in securing your information. In fact, whether or not your information got exposed, it might be a good idea to ratchet down some identity security measures.
Need some help figuring out what to do next? Here are five important steps to help protect your credit and your identity:
Step one: Check credit reports
Take the time to review your credit reports from all three agencies: Equifax, Experian and TransUnion. You can do this for free once a year by visiting annualcreditreport.com. Carefully go through each report to identify each item. If anything looks unfamiliar or suspicious visit IdentityTheft.gov to report the activity.
Right now, Equifax is offering a free year of credit monitoring to all Americans because of the breach However, a couple of precautions to note. After a year, the service costs up to $16.95 a month. So, be sure to keep that in mind at the end of your 12 months. Lots of people are criticizing Equifax for encouraging people to sign up for a service they will eventually have to pay for, when it's Equifax's fault people need the service in the first place.
You should also know that credit monitoring, whether through Equifax or otherwise, doesn't really do anything to stop hackers. It just lets you keep on eye on your credit report so you can react if hackers do try to use your information.
Also, hackers can hold onto your information for a long time before using it. Therefore, keep checking your reports, even if you're initially in the clear. Don't get complacent.
Step two: Consider a credit freeze
Admittedly, this step may seem inconvenient. Yet, the trade off may be worth the hassle. A credit freeze restricts access to your credit report. This means no one can take out a new line of credit using your name or personal information. On the surface, this sounds great. However, this also means you cannot open new accounts. So, if you're about to make a major new purchase requiring an application for credit, then this can turn into an issue.
It costs anywhere from $5 to $10 freeze your credit with each agency. The amount varies by state. While you can temporarily "thaw" your credit report (like if you're applying for a new credit card or getting a mortgage), you may also have to pay a fee for that, too.
To initiate a freeze, you can contact the agencies at the following phone numbers:
Equifax: (800) 349-9960
Experian: (888) 397-3742
TransUnion (888) 909-8872
Placing a credit freeze on your accounts does not affect your credit score, so that is some good news.
The Federal Trade Commission has some really useful information about credit freezes, so visit their website if you're interested in learning more.
Step three: Place a fraud alert on files
If you decide not to do a credit freeze, then consider a fraud alert. These alerts let creditors know your identity may have been compromised. Then, officials need to further verify whomever wants credit in your name. Hopefully, that should only be you, of course! Fraud alerts don't cost anything except a few minutes of time—all you have to do is call a credit reporting agency and provide some information to prove your identity. Well worth it for financial records' security!
All you have to do, according to the FTC, is place a fraud alert with one of the three credit reporting agencies. They must alert the other two, according to the commission. Also, you can opt for a 90-day fraud alert or an extended fraud alert, which is good for up to seven years.
Step four: Keep a close eye on bank statements and credit cards
Always keep watch on your day-to-day financial accounts. With online banking and smartphone apps, it's easier than ever to monitor your daily transactions. And, don't always look for big charges. Many times, hackers start with small, seemingly innocent amounts that most wouldn't notice. Make sure you initiate every transaction in your accounts.
Step five: File taxes early
What do taxes have to do with all this? According to the FTC, scammers often take your personal information to file for a tax refund or get a job. Therefore, as soon as you get everything you need to file your taxes, get it done before someone else tries to do it for you.
Also, when it comes to taxes, remember this: the IRS never calls people about pending tax collections or arrests. This is a common scam criminals try to use to steal money from innocent people. The IRS sends letters to people who owe money. They don't call looking for over the phone payments.