"It seems like every few months, there is a news report about a security breach that has the potential to leave masses of people susceptible to identity theft and credit fraud."
Most notably in recent times is the Equifax breach estimated to affect over 143 million people (that's almost 1/2 of the population of the US!). That being said and in the event that another breach occurs in the future, there are some key things you need to do to minimize the impact and protect yourself from potential credit fraud and identity theft.
1. Check your credit
You want to make sure everything on your credit report is as expected. You are entitled to a free report from all 3 credit bureaus each year via annualcreditreport.com or you can choose to pay for one. The bottom line is that you need to check your credit to make sure nothing strange is going on there.
2. Get credit monitoring in place or consider a credit freeze
Just because a breach has happened does not mean the identity theft or credit fraud will happen right away. It could take months or years for you to potentially be affected.
Usually, when a company has been impacted by a security breach e.g. Equifax, they typically offer free credit monitoring of some sort for a period of time BUT again there are several other companies that can do this for you too if you don't want to go with the company that has caused all the trouble in the first place (I don't blame you).
Having your credit monitored will alert you when your lines of credit are being applied for or added to your account - this way you'll know exactly what's going on with your credit. However, If you will not actively be applying for any lines of credit in the foreseeable future, you can consider putting a freeze on your credit.
A credit freeze is also known as a security freeze and it allows you to restrict access to your credit report - this means lenders will not be able to access your credit to approve any unauthorized lines of credit until you remove the freeze. You can get a freeze on your credit from each of the 3 major credit bureaus - Equifax, transunion, and Experian.
3. Change any online passwords and pins associated with your financial information
It's a good idea to change any passwords or pins you have associated to your personal and financial information online. Sometimes it's hard to determine exactly what information was breached and so it's better to take all precautions including changing your passwords.
What to do if you are a victim of identity theft or credit fraud
If you find out that you’ve been a victim of identity theft or credit fraud then you want to take action to rectify the situation as quickly as possible. Here are steps to take:
- Start by pulling a copy of your credit report to determine what damage might have been done. Also, take some time out to review your bank and credit cards statements for any discrepancies in case the transactions have not yet been reported on your credit profile yet.
- Alert the credit bureaus to report the situation and place a fraud alert or freeze on your credit reports to prevent any additional damage from being done.
- Contact your creditors or service providers to report the situation and dispute any fraudulent claims made in your name.
- File a police report and get a copy of this report to share with the credit bureaus and your creditors as part of your case file.
- If you think your social security number has been compromised, contact the social security administration (ssa.gov) to file a report.
- Be sure to contact the post office as well, in the event that an authorized change of address has been filed in your name.
Again, if your personal and financial information happens to be part of a security breach, don't panic. It's annoying yes, but if you take the above actions you'll be good - better safe than sorry.