After news of the Equifax security breach broke, many of my clients have asked me what they should do to protect their personal information. I wanted to share my recommendations with all of you.
What Happened?
Equifax is one of three major credit bureaus, which means they compile and use a lot of consumer data to help determine creditworthiness. You credit score is based on information in your credit reports that are produced by these bureaus, so it’s important that your information is accurate.
From May through July, Equifax experienced a data breach that compromised the personal information of at least 143 million people. Their solution was to encourage concerned consumers to sign up for their own credit monitoring service. According to the terms of use, signing up apparently meant waiving your right to take legal action against Equifax. Those terms of use have been changed.
What Should I Do?
Before you sign up for (and pay for) credit monitoring, there are many protective steps you can take for free.
Check Your Credit Reports: You are entitled to one free credit report per year from Equifax, TransUnion, and Experian. Since credit inquiries sometimes take awhile to show up on your report, check one credit bureau’s report now, another one in three months, and another one three months after that. Access your free credit reports here. Check to see if any lines of credit or bank accounts were opened in your name without your knowledge. You can dispute fraudulent actions and put a fraud alert on your credit.
Check to See if You’re Affected by the Breach: Equifax set up this site where you can enter the last six digits of your Social Security number to find out if your data has been compromised. You also have the option to enroll in their free credit monitoring service.
Review Your Bank and Credit Card Statements: Verify that there have been no unusual charges on your credit cards or withdrawals from your bank account. It’s a good idea to always check your statements anyway, since these accounts can be compromised at any time.
Put a Fraud Alert on Your Credit: If you want to take further action, you can place an initial fraud alert through the credit bureaus that stays on your credit for 90 days. You can learn more about how to do that here.
If You’re Freaking Out, Then Freeze Your Credit: If you know that someone has tried to open a credit card or loan using your personal information and you don’t anticipate needing to open a new credit card or taking out a loan for a year or more, you can put a freeze on your credit. If you plan on taking out a loan or getting a new credit card soon, you do not want to freeze your credit. Also, it takes a few steps to unfreeze your credit so think carefully before doing this.
Monitor Your Credit and Protect Yourself: If you find out that someone has opened accounts in your name, consider a credit monitoring service like LifeLock, which can help protect you from identity theft, or LegalShield, which gives you easy access to legal assistance. While neither of these services are free, they can help you deal with your breached accounts.
Keep an Eye on Your Credit, Accounts, and Important Documents
With so much of our personal information available online, security breaches like these are bound to keep happening. The best thing you can do is take 10-15 minutes every few months to check one of your credit reports and look through your bank and credit card statements.
While banks and credit cards are good at notifying customers about suspicious charges, sometimes thieves get away with making small purchases — and if you have automatic payments set up and pay your bills without looking at your statements, you might be paying for things you didn’t buy!
What Else Can I Do?
How else can you keep your finances and identity safe? Don’t carry your Social Security card in your wallet. Know where your credit cards are, especially if you have some cards you never use that are stashed in a drawer. Shred statements, credit card applications, and other documents before throwing them away. Install a mailbox that locks so your mail can’t be stolen, or have your mail sent to a P.O. box if you live with a nosy roommate or relative.
I know many people who avoid looking at their financial info out of fear, but you can save yourself a big hassle by regularly self-monitoring your financial transactions. That way, if you do notice something unusual, you can act on it before too much time has passed.
