Debt / Credit Protection

September 13, 2017 / Ted Braun

What you need to know about the Equifax Cybersecurity Incident

Last week, Equifiax confirmed that they were the victim of a major security breach in which approximately 143 million people in the United States were affected. Hackers had access to key personal information such as: Social Security numbers, dates of birth, addresses, phone numbers, driver’s license numbers and more. The hackers had access to the data from May through July, until Equifax discovered the issue on 7.29.17.

Given that this critical personal information is most often used to commit identity theft, this is a significant event and one that should be treated as so. While we do not want to alarm you, we do want you to take notice and be proactive in taking a few simple steps to help protect yourself in the wake of this event.

What to do first

Equifax has established a special site for consumers to check if they were one of the 143 million people affected. You can access this link here, scroll to the bottom of the page and click the “Potential Impact” button. This will bring up a page in which you will be asked to enter your last name and the last 6 numbers of your Social Security number.

A message will then appear indicating whether they believe you were one of the consumers affected. Do not panic if the answer is “yes”. I know firsthand that is the natural first reaction (I myself am on the list). Regardless of whether you are on the list, Equifax will then provide you the option to enroll in “TrustedID Premier” for free, which is their credit monitoring service.

Some may be a bit skeptical about enrolling in a credit monitoring program with a company who just experience a massive cybersecurity incident. This is understandable and fortunately there are several options for someone affected by this breach. The main difference being, if you chose to enroll in another company’s credit monitoring service, there is a cost (as opposed to Equifax giving it away for free considering what happened).

Options for Credit Monitoring

Regardless of whether you were affected by the Equifax data breach, now is as good a time as ever to begin taking a more pro-active approach to monitoring your credit. There are several options for consumers to monitor their own credit reports or enroll in a paid credit monitoring service. Some of the most common options are as follows:

Self-Monitoring

Anyone that has any kind of credit is entitled to one free credit report per year from each of the three credit reporting agencies (Equifax, Experian, TransUnion). You can obtain a copy of your free credit reports at AnnualCreditReport.com. While useful, this is only available once a year which leaves a pretty big gap in-between reviews.

Obtaining your free annual credit report is a good start and could work well with a fee monitoring service like the one offered by Credit Karma. You can access Credit Karma at CreditKarma.com, but I have found the best experience to be through their application for your smartphone. Through Credit Karma, you can check on your credit as often as you would like and they will send you notifications if there was a change to your credit report.

Paid Credit Monitoring Services

As you might imagine, other for-profit credit monitoring companies are doing their best to capitalize on this and grow market share. This has led to a few consumer-friendly offers that include some extended free-trial periods. For reference, Equifax’s “TrustedID Premier” product would usually fall into this category, but given the recent incident they have offered it to anyone that would like it, free for one year. Some other options include:

LifeLock

Currently offering a 60-day free trial. Promotes their service as not only a detection/monitoring service, but a company that will also help work with you to restore your credit in the event of an incident. They have three levels of service, starting at $10 per month, up to $30 per month. More on options from LifeLock can be found at LifeLock.com.

Experian CreditWorks

Experian CreditWorks Premium checks your Experian®, TransUnion®, and Equifax® Credit Reports each day, and notifies you when key changes are detected. See your bigger credit picture with Credit Reports, FICO® Scores1 and monitoring from all 3 credit bureaus. Currently offering an intro rate of $4.99 for your first month, that goes up to $24.99 beginning in your second month. More on options from Experian can be found at Experian.com.

TransUnion

TransUnion has a couple of products, but for the purposes of our discussing today, the one we are looking at is there “TransUnion Credit Monitoring” service. The cost of this program is $19.95 per month. While TransUnion is one of the three main credit reporting bureaus, this service would be last on my list as they only provide monitoring of your TransUnion report as opposed to all three bureaus. More on options from TransUnion can be found at TransUnion.com.

What is a Credit Freeze?

Another, often disregarded option for extra security is placing a credit freeze on your credit with all three bureaus. There are a few reasons why this is often over-looked, but there are equally as many reasons that make it a viable option for the right person.

A credit freeze (also referred to as a “security freeze”), restricts access to your credit report, which ultimately makes it more difficult for an identity thief to open new accounts in your name. Most creditors require access to your credit report before they will extend new credit.

How Does it Work?

Important to know, that this also prevents you from opening any new lines of credit. A freeze is a freeze, and the only people that will have access to the information will be any existing creditors and the government (if court ordered).

A freeze does not prevent you from obtaining your free annual credit report. It is also not a guarantee of identity theft protection as it does not prevent criminals from stealing and using your existing credit cards.

Since the freeze blocks the release of your credit reports, you will need to think about things that you may need to do soon that could require a credit pull. Some common examples include; new car, switching car insurance, new cell phone, applying for a mortgage or refinancing existing mortgage. You can temporarily lift or remove entirely if you know that you will be needing to do one of these things, but it could take up to three business days. In short, you do not want to place yourself in a position where you “need” credit right away and it’s frozen.

How do I Place a Freeze on my Credit Reports?

You will need to contact all three of the credit reporting agencies individually to request a freeze.

  • Equifax – 1800-349-9960
  • Experian – 1-888-397-3748
  • TransUnion – 1-888-909-8872

Depending on your respective state laws, some of the companies charge a nominal fee to add, lift or remove a freeze (ranging from $5-$10). After receiving you freeze request, each of the three companies listed above will send a confirmation letter that contains a specific passcode that will be needed to request the removal of a freeze. Keep this letter in a safe place, or for HFA clients, scan it and store it in your electronic document vault!

How do I Lift a Freeze?

You can request a removal of the freeze by contacting each of the respective companies and providing the respective passcode. The companies must lift a freeze no later than three business days after getting your request.

Make this a Priority

What happened with Equifax is unfortunate and it is my sincerest hope that law makers and companies will work together to help protect U.S. consumers in the future, but you cannot rely on this as your only source of protection. Let this event serve as notice that the time has come to make protecting and monitoring your personal information a priority. Please don’t hesitate to reach out to your advisor with questions or for help with anything discussed within this article!

Sources

Consumer FTC – Credit Freeze FAQs
TransUnion
Annual Credit Report
Equifax Security 2017 – Enroll
Life Lock
Credit Karma
Experian

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