October 4, 2018
We all like getting things for free, especially when the free items or services are valuable. Thanks to legislation that was signed in May 2018, Americans have another free service that they can use as often as they like – applying for a credit freeze. As of September 21, 2018, it no longer costs money to freeze or thaw your credit.
A credit freeze stops any potential lenders from accessing your credit report. If a lender can't assess your risk, they won't lend money to you – or to an identity thief pretending to be you. When you want to make a legitimate credit request, you "thaw" your account for as long as you need to get your credit source approved, and then re-apply the freeze.
Simply place a credit freeze with each of the major credit bureaus (Equifax, Experian, and TransUnion) and you're all set ... right?
Unfortunately, it's not that simple. Identity thieves have many other ways to cash in on your personal information.
Credit freezes prevent thieves from opening new accounts, but if they have the right information, they can still abuse your current accounts. Check all of your accounts frequently for any signs of fraudulent charges. Dispute fraudulent charges immediately, no matter how small they are. Identity thieves will often start with small charges to see if you are paying attention. You can check your credit score and read your credit report for free within minutes by joining MoneyTips.
Identity thieves can also file bogus tax returns in your name, using fake numbers to maximize a refund check. If their return arrives before your real return, the IRS will reject your return – forcing you to waste time clearing up the issue.
Similarly, an identity thief may acquire medical services under your name. Medical identity theft is particularly obnoxious because it's hard to detect – many Americans won't know about the fraudulent charges until they receive a bill – or worse, get calls from collection agencies because the bill is already overdue.
Naturally, difficulty of detection makes medical identity fraud quite attractive to thieves. According to the Identity Theft Resource Center, over one-quarter of 2017 data breaches were medical, or health-care related.
An identity thief could even use your personal information to obtain work. Not all employers perform credit checks or thorough identity verification. Among other burdens, you could end up with a tax bill on earnings that aren't yours. By creating an account with the Social Security Administration website, you can check for any false earnings reports.
Synthetic identity theft occurs when an identity thief uses some of your personal data along with fake information to create an entirely new identity. The overlap in information may not be enough to trigger your credit freeze and prevent new accounts.
While credit freezes are a useful part of your identity protection, they aren't comprehensive. Combine credit freezes with common-sense information protection, like using strong passwords, shredding personal documents before throwing them away, and using only secure Internet connections. Check all of your accounts regularly along with your credit report and beware of suspicious emails or confirmation requests for unfamiliar accounts.
For extra protection, consider adding fraud alerts, credit monitoring services, or various locking and identity theft protection services. Balance the level of protection with the corresponding inconvenience and find an identity protection strategy that's right for you and your family.
Make it hard for identity thieves to get your personal information and make it even harder for them to use it. Given that millions of Americans have been subjected to data breaches, there should be plenty of easier targets for identity thieves to find.
If you would like to monitor your credit to prevent identity theft and see your credit reports and scores for free, join MoneyTips.
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