Protecting Your Credit
With credit fraud and identity theft on the rise, safeguarding your credit profile is important for every consumer.
We recommend several measures to protect it. The options below are listed in order from most to least complex:
1. Freeze your credit data at all four major credit bureaus (Equifax, TransUnion, Experian and Innovis)
This is the most extensive measure you can take toward protecting your personal identity. It is also the most difficult to unwind, and it adds a layer of inconvenience to future credit transactions.
Freezing prevents your credit report from being released and thus blocks any outside attempt at applying for credit under your name. Once you have put a freeze on your credit, it can only be unfrozen by using a personal identification number (PIN) assigned to you by each agency. It is important to keep track of your PIN for each bureau as resetting PINs can be done but it is a time-consuming process. To freeze your credit, go online or call each agency directly. See page 14 for agency phone numbers and web addresses.
There is no cost to freeze or unfreeze credit data.
You receive the greatest protection from freezing your credit. A credit lock is a service some credit bureaus provide, often for a fee. You will see this option promoted on their websites but it does not have the additional PIN protection layer provided by a freeze.
Be aware that unfreezing your data adds time and steps to any future process where your credit information is required (within the purchase of a property, a new credit line, setting up utilities at a new residence, background checks within a career change, etc.). That said, most cybersecurity experts consider the inconvenience to be well worth the tradeoff in data protection.
2. Set up fraud alerts
This ensures you are notified and asked to confirm permission anytime a new credit account is opened in your name. It is smart to do this for all credit and debit cards as well. You can set up a fraud alert with each of the main credit agencies using the same contact information above. When you request a fraud alert with Equifax, TransUnion or Experian, that agency is legally required to notify the other two agencies. You will need to make a separate request with Innovis.
As with freezing, setting up a fraud alert is free but can be cumbersome. The alert is good for only one year, after which you have to renew for an additional year to maintain the service. The credit agencies will not notify you when the one-year timeframe has lapsed, so maintaining alerts requires some vigilance on your part. For victims of identity theft, you can apply for an extended fraud alert that remains in place for up to seven years. You will need a police or Identity Theft Report to qualify for this extended service.
In some companies, credit monitoring is provided as an employee benefit. It also is included as a rider on some homeowner insurance policies so you might want to check and see if you already have access to this service in multiple ways.
3. Monitor your credit
You are entitled to one free credit report per year from each of the four major agencies. Rather than requesting all four at once, you may want to spread them out across the year so that you are checking your credit information once every quarter. Review it closely for any activity that looks suspicious.
Again, you may already have access to a service for monitoring, so check with your employer or insurance agent to find out.
In addition to the above, we should all regularly check credit-card statements and bank statements for any unusual activity. The first signs of identity theft can often be found there. Be aware too that you may have relatives or friends who will need assistance with this. Thieves are happy to use your child’s or elderly parent’s data to open a new line of credit, and sometimes those situations are harder to immediately recognize. All combined, these steps do take some upfront time and ongoing diligence. But we have entered a new era of cyber threats that requires all of us to be more proactive. While no measures are 100% foolproof, these are some of the best options for protecting personal data.
For further suggestions on these and other cybersecurity issues, visit our website. The financial toolbox section of our website includes steps to take if you become a victim of identity theft. You can read more about signs of identity theft as well as detailed information on credit freezes and fraud alerts on the Federal Trade Commission’s website: consumer.ftc.gov/articles/what-know-about-credit-freezes-fraud-alerts.
The material shown is for informational purposes only and should not be construed as accounting, legal, or tax advice. Altair Advisers LLC is a registered investment adviser with the Securities and Exchange Commission; registration does not imply a certain level of skill or training. While efforts are made to ensure information contained herein is accurate, Altair Advisers cannot guarantee the accuracy of all such information presented. Please see Altair Advisers’ Form ADV Part 2A and Form CRS at https://adviserinfo.sec.gov/ for additional information about Altair Advisers’ business practices and conflicts identified.