About the Equifax Security Breach

On September 7, the credit bureau Equifax announced criminals had breached its computer security systems and obtained sensitive information for more than 140,000,000 Americans.  The computer network was compromised for about 2.5 months, from mid-May through July.  Based on the number of Americans who had their information compromised, it is a relatively safe assumption that if you have a credit file it is in the hands of the criminals.

What Do You Do?

You don’t have to do anything, but that isn’t an advisable course of action.  At a minimum, you should either start a credit monitoring service or initiate a complete credit freeze. You should also pull your credit reports regularly from www.annualcreditreport.com.  You are entitled to a free credit report each year from Equifax, Experian, and TransUnion. It is best to rotate through the three agencies so you pull a different credit report every four months.

Option One: Credit Monitoring

Equifax is offering all Americans with a Social Security number one year of their identity theft protection and credit file monitoring product, TrustedID Premier, free-of-charge. The enrollment period ends on Tuesday, November 21, 2017. After Equifax managed to compromise the sensitive information of half the country, many people are wary of the protection Equifax is providing.  This is understandable. Credit monitoring can also be purchased from TransUnion, Experian, or other third-parties.

The primary purpose of credit monitoring is to alert the user when key changes are made to any of his or her credit reports. The biggest problem about credit monitoring is a user is only alerted after credit is taken out in his or her name. While it is good to know if you are a victim of identity theft, it is preferable to prevent it in the first place! That’s where a credit freeze comes in.

If you don’t do anything else, at least sign up for the complimentary Equifax credit monitoring (TrustedID Premier). It provides a few additional benefits, such as $1,000,000 in identity theft protection.

Option Two: Credit Freeze

A credit freeze is essentially the “nuclear option” because it stops anyone, including yourself, from using your credit report to apply for credit. Once a credit freeze is in place, you can only apply for credit by temporarily “lifting” a security freeze so the lender can pull the credit report.

Before moving forward with a credit freeze, you should know a couple things. First, unless you have been a victim of identity theft (and can substantiate it with documentation, usually a police report), there is a cost to place a credit freeze and each time you want to lift it. Second, it is an inconvenience because of the need to lift the freeze any time you want to apply for credit.  On the flip side, identity theft is a much bigger headache.

Cost of a Credit Freeze

Here is an overview of the cost of having a credit freeze in Texas. To actually implement the credit freeze, the cost is $30 plus applicable taxes.  There is not an ongoing cost unless you need to temporarily lift the freeze to have a lender pull your credit, or you decide to completely remove the freeze. Note that there are a few more ins-and-outs to the cost, but the figures below will apply to most people.

Cost of a Credit Freeze (Texas)
Credit Bureau Add Freeze Lift Freeze Remove Freeze
Equifax $10  $10 – $12 $10
Experian $10 $10 $10
TransUnion $10 $10  None
Innovis  None  None  None

Click on the credit bureau in the table to get more details or see the cost in other states.

How to Apply for a Credit Freeze

To actually freeze your credit, you have to apply for the freeze at each credit bureau separately. Be prepared to spend a little time working through the application process.  The credit bureaus typically request submission of several documents to verify your identity.  All the credit bureaus are also currently being inundated with requests for credit freezes due to Equifax’s negligent data security, so prepare for possible delays.

Click on the name of each credit bureau below if you want to go to through the credit freeze process.

Equifax credit freeze

Experian credit freeze

TransUnion credit freeze

Innovis credit freeze

 

Summary

Whether to freeze your credit is a decision to make based on your personal situation and preferences.  You should consider the cost and effort it will entail, whether you apply for credit often, and how much you value the peace-of-mind a credit freeze provides.