Is Freezing Your Credit a Smart Move?

Hackers are constantly looking for targets that they can exploit by taking their personal information and using it for nefarious purposes. Most Americans have been the victims of a data breach at least once, and that number is much higher now that a background company has had a data breach.

National Public Data had a breach that allowed the personal information of millions of people, including Americans, to reach the hands of hackers. Unfortunately, this includes Social Security numbers. About 2.9 billion pieces of data were stolen from NPD and listed for sale on the dark web.

Data breaches are messy, and that’s especially true for the people whose data was stolen. Often, there is enough information available to the hackers for credit cards and loans to be taken out in the victim’s name. This can cost victims an enormous amount of time and money as they try to get the problems taken care of and the fraudulent accounts closed.

When a hacker, or a customer of the hacker, has your information, they may ruin your credit by getting a credit card that they run up quickly with items they can use or sell. Someone with your information may even take out a line of credit that they max out to get the cash. This can sink your credit score by hundreds of points and cause problems like higher auto insurance and the denial of rental housing due to the poor credit rating.

Freezing Your Credit: How and Why

One of the ways that many people deal with a data breach in which they’ve lost data is to put a freeze on their credit. Freeing your credit puts a fraud alert on the account so that the credit bureaus make it harder for the person to get new credit in their name.

Many people do this after a data breach that they’ve been involved in, and some people do it simply because they worry about fraud. Freezing your credit isn’t difficult, and it could save you from the hassles and expense of getting rid of fraudulent data on your credit report.

To do this, you need to go to each of the three main credit bureaus, Experian, Equifax, and TransUnion, and ask for a freeze to be applied to your credit. This keeps companies from being able to access your credit information such as your credit score and amount of debt. When a company can’t access this data, it will be very hesitant to open a new line of credit in your name.

Many people don’t freeze their credit after a breach and hope that they aren’t the victims of fraud. Others don’t freeze their credit accounts because they will be seeking credit soon and need it to be open. However, once it’s frozen, it can be unfrozen later if you need access to your credit again.

When you freeze your credit, you’re given a PIN that you can later use to thaw out your credit when you need it. Someone trying to get into your credit to get a new cell phone or credit card won’t have the PIN and can’t access your credit.
Many people put credit freezes on their minor children’s credit so that no one will run up any debt in their names. Kids won’t need to have access to their credit accounts for a long time, so freezing it is a win-win for them.

If you don’t want to go to each of the credit bureaus to launch individual credit freezes with all three of them, you can also go through a third-party company that will initiate the freezes on your behalf. Many people find this to be a time-saving way to keep anyone from using their data against them.

Check Your Credit Scores

If you decide not to freeze your credit right away, there are a few things you should do to stay on top of any possible fraud. Check your credit score frequently to make sure that there are no major changes. Your credit score will fluctuate slightly as time goes on, often getting better as your lines of credit get older and you don’t add on any more debt. However, watch for any sharp declines in your scores.

If your credit score dips and you haven’t made any changes to your credit, it could be that someone has taken out a fraudulent account in your name. As soon as you see a fraudulent account, report it to the credit bureau where it appears. You’ll likely have to file a fraud notice with all three bureaus so that the account can be removed from all of them. Check your accounts at least every month if not every week to stay vigilant. This is especially important after the National Public Data leak.

A number of apps are available that allow you to check your credit scores with all three bureaus. You can generally do this for free as often as you like with the right apps. Credit Karma is one such app that can help you to keep an eye on some or all of the bureaus.

Raising Your Score

To keep your credit report in tip-top shape, you need to put in some work to raise it. In addition to keeping your eye on your score, it’s important to raise that number. Set a strict budget for your spending each month. Make sure to put aside some money every month to pay down debt. Keeping your debt to under 30% of your available credit can increase your score.

Don’t apply for too many credit cards. Every time you apply for a card, your credit score can take a hit. Only apply when it’s really necessary, and don’t put out a lot of applications at the same time. This signals serious financial trouble that can result in a drastic lowering of your score.

Once you’re in the habit of paying off debt and checking your score regularly, you’ll know right away if any fraud has been committed in your name. This can allow you to fight it before it gets even messier and more harmful to your finances.

iLOCK360: Like a Security Service For Your Identity and Money

Between work and your personal life, it is nearly impossible to stay off of the internet and not share anything that may put you at risk of identity theft and robbery. iLOCK360 keeps a close eye on your personal information and credit profile from day one. If something does pop up? You get alerts instantly and our team on your side is ready to minimize damage. This can include:

● Full identity restoration by our specialists
● Help to replace missing cards and IDs
● $1 million insurance to cover expenses related to your identity restoration

If there is one friend request you do accept, it’s iLOCK360. Click here to learn more.