Equifax, one of the largest credit reporting agencies in the United States, recently revealed that it was subject to a major hacking earlier this year, potentially exposing the personal information of up to 143 million people. In light of this data breach, many people are wondering what they can do to protect themselves and their identity, including those who are contemplating freezing their credit score after the Equifax breach. Indeed, many experts argue that you should seriously consider freezing your credit score, especially considering how many millions of people were implicated in this breach.
As USA Today noted, the hackers who breached Equifax now have access to the highly personal information of millions of Americans. This information includes names, address, birth dates, and Social Security numbers, something which credit experts refer to as the "crown jewels" of identification data. With access to this type of information, someone could potentially apply for a variety of financial services in your name without your consent. These services include credit cards and loans, among others.
Because of the sensitivity of this information, the purposes for which it could be used, and the number of individuals affected, some experts are advising that people strongly consider freezing their credit reports for awhile following the data breach.
A credit freeze stops a creditor from viewing your credit report. So if you were applying for any type of service that requires a credit check, like a new credit card, a bank loan, or a mortgage, the creditor would be unable to pull your credit report — and therefore unable to offer you these services. While this does not necessarily sound like a good thing, freezing your credit does mean that no one else can seek to acquire financing in your name without your consent, because if they try to do so they will automatically get rejected due to the credit freeze.
Moreover, freezing your credit does not mean that you must forgo applying for any new financial services. As The Verge noted, you can temporarily lift a credit freeze if you are applying for anything that requires a credit check, like a loan or new credit card. Freezing and unfreezing your credit does not affect your score, though approval for new lines of credit could be a bit delayed due to the process.
So, should you freeze your credit? As USA Today noted, many cyber security analysts are saying "yes," with one calling it the "Fort Knox of credit protection." Even if you are not sure whether your data has been breached — Equifax says you can check to see if you've been affected on its website, but some claim this means you might be waiving your right to participate in a future lawsuit against the company — it may still be prudent to put a credit freeze in place.
If you are interested in freezing your credit, you should contact each of the three main credit reporting companies in the United States: Equifax, Experian, and TransUnion. You have to request a freeze from each company, which will likely cost a small fee (around $5 to $10 per company). However, as The Verge noted, if you can prove you have been a victim of identify theft, the companies may waive the freezing fee. You can unfreeze it at any time and companies are required to lift the freeze within three days after receiving your request.
However, if you not convinced that freezing your credit is the right step for you, there are still precautions you can take in light of the Equifax breach. NBC News recommends getting a copy of your credit report now and then obtaining another one in three months, comparing the two for inconsistencies.
The article also advocated for being vigilant and on the lookout for any suspicious financial transactions: For example, you should consider checking your bank account regularly for signs of suspicious transactions as well as looking for any strange activity on your social security benefits statement.
The decision of whether or not to freeze your credit in the aftermath of the Equifax breach is up to you. Either way, it is prudent to be very vigilant about your finances in the next few months and look out for anything that seems suspicious or out of the ordinary.