The Navigoe Blog

Alert? Block? Or Freeze? What’s the Best Way to Protect Your Credit?

Equifax, one of the three major credit report bureaus that reviews, reports, and maintains consumer credit files, recently announced that it had discovered a breach in its computer systems. Consequently, personal data (primarily names, Social Security numbers, birth dates, addresses, driver’s license numbers, and credit card numbers) for approximately 140 million people in the U.S. was compromised.

First off, you might be wondering if you have personally been affected by the breach. To find out, you will need to review your credit reports for any suspicious activity. Everyone is entitled to one free copy annually from each of the major bureaus at annualcreditreport.com. Nevertheless, the breach begs a larger question: How can you protect your credit from the current or future security hacks? You may have heard of the ability to freeze, block, or establish alerts on your credit report, but what do these actions mean and what is the best method for you?

Credit Alert

A credit alert is a notice placed on your credit file to alert creditors to authenticate your identity before they issue any credit. The timeframe of the alert can range from 90 days up to 7 years when you place an extended alert. One excellent benefit of the extended alert is that the credit reporting agency must remove your name from marketing lists for prescreened credit offers. It also alerts you to applications for new credit, which gives you a real chance to stop new fraudulent accounts. The credit bureaus allow you to establish an alert at no cost. A downside to a credit alert is that some credit issuers don’t use credit reports to verify identity, so they may not see the fraud alert. Additionally, it’s important to remember that a credit alert is a temporary solution and does not provide long-term protection. You can place a fraud alert online using the direct links:

Equifax
Experian
TransUnion

Credit Freeze

A credit freeze establishes a block on your credit report that prevents unauthorized companies from viewing and accessing your credit report. This would block new creditors, background check companies and potential identity thieves from seeing your credit information and attempting to obtain credit in your name. Even though your report is blocked, you can still access your free annual credit report, open a new account, apply for a job, purchase insurance, refinance your mortgage, or anything else that would require pulling up your credit. The downside of a credit freeze is that it doesn’t stop an identity thief from misusing your existing financial accounts, and companies that you do business with currently would still have access to your credit report. Still, a credit freeze remains one of the best ways to protect your credit.

In many states, you can place a credit freeze at no cost. In California, a security freeze is free to identity theft victims who have reported the incident to a law enforcement agency or who are age 65 and older. If you are not an identity theft victim and you are under the age of 65, the state requires a nominal fee of $10 per credit report. You will also pay $10 if you ever need to temporarily remove a freeze. To place a credit freeze, you can contact the credit bureaus by mail or phone or place it online using these direct links:

Equifax
Experian
TransUnion

With security hackers becoming increasingly sophisticated, protecting your credit has never been more imperative. If you have any further questions or need assistance, please don’t hesitate to contact the Navigoe team.