4 Key Ways to Protect Your Credit

Just as it’s important to have strong financial habits to boost your credit score, it’s just as important to protect your credit score from fraud and errors. Remember these four steps to secure your credit:

1. Check your credit report at least annually: You should access AnnualCreditReport.com to review your free credit reports from each of the credit bureaus—Equifax, Experian and TransUnion—on at least an annual basis. Lenders don’t necessarily report to every credit bureau, so it’s important to review each report. Based on a study by the Consumer Federation of America in 2018, 43 percent of people did not check their credit scores in the previous year. DO NOT be one of the 43 percent. Reviewing your credit reports will be the primary way you detect errors in your credit report, which you will need to dispute as soon as possible. Be alert for any credit applications, accounts or defaults initiated by someone else under your name.

2. Freeze your credit: Putting a “freeze” on your credit (also known as a security freeze) is one of the most efficient ways to protect your credit. A credit freeze prevents unauthorized access to your credit report, thus making it significantly harder for anyone—including you—to open new credit accounts. Although freezes don’t prevent fraudulent charges on your current accounts, they do prevent identity thieves from taking out credit in your name.

To place a freeze on your credit, you’ll need to contact each of the three credit bureaus. Each bureau outlines the steps to take at the following websites: Equifax, Experian and TransUnion. By law, the credit bureaus are required to implement the freeze within one day of the request. Once you freeze your credit, the freeze remains in effect and no action is needed by you unless you need to apply for new credit, at which point you must temporarily remove (thaw) or permanently remove (lift) your freeze. When you apply for new credit, the creditor will typically check your credit from one of the three bureaus. Thus, it’s in your best interest to ask from which bureau the creditor will pull your credit report so that you only have to thaw or lift the freeze from one bureau.

As of September 21, 2018, it is FREE to place, thaw or lift a credit freeze with each of the three bureaus. Prior to this date, the bureaus generally charged $5 to $10 fees for doing so, with the fees varying by state. This added bonus gives you even more incentive to freeze your credit!

3. Establish fraud alerts: If you believe you are or may become the victim of identity theft, strongly consider placing a fraud alert on your credit reports. Fraud alerts are essentially “red flags” that alert creditors to take extra steps (e.g., calling you at a phone number that you provide) to verify your identity before extending credit in your name. The good news here is that placing fraud alerts on your credit is free, and you need only contact one of the three credit bureaus to place the fraud alert as that bureau is required to then send your request to the other two. Refer to the Federal Trade Commission’s website for further information and each bureau’s contact information.

4. Safeguard your SSN and other information: Use common sense when protecting your personal information, including your social security number (SSN), name, address, date of birth, credit card or bank numbers, banking PINs, driver’s license or passport numbers, email address and phone numbers. While your SSN is the “jackpot” for fraudsters, they don’t need all this information to steal your identity or apply for credit in your name.

For example, say a seemingly kind lady calls you up and says she works for the IRS. She needs to verify your SSN to be able to mail your tax refund. The joy of receiving a tax refund overfills you, and you happily spit out your SSN. This “kind” lady then combines your SSN with your name, address, date of birth and other information you have generously provided on your public Facebook page to apply for a credit card in your name. She then changes the address on the account to her own address, goes on a shopping spree and never pays the bills. The credit card company, unaware of the lady’s mischief, believes that you are not paying your bills, and your credit score takes a nose dive.

Do not let this situation happen to you!! Do not provide your SSN in writing, over the phone or in another manner unless you absolutely have to do so (e.g., to apply for credit, submit your tax return, apply for an apartment). Use different, strong passwords to safeguard your accounts, and be very skeptical of any emails or calls requesting information from you. In other words, use common sense and you’ll be just fine.

For more information on credit, refer to the following posts:

• Understanding Credit & Credit Scores
• 6 Ways to Increase Your Credit Score