Friday, May 13, 2016

Credit Protection

Pathways Advisory Group, Inc.
Jeff Karst, CFP®

In case you missed it from the June 2015 Newsletter...

It seems that every other week there is a story about data breach at a major company.  Perhaps you’ve already been affected by it.  With so much of our lives online, it’s easier than ever for hackers to steal our information.  How do you protect yourself?  There are credit monitoring services such as LifeLock (which I’m sure you’ve heard of).  You can place a Fraud Alert on your credit report to have them contact you if anyone (including you) attempts to open credit in your name.  However, those alerts only last 90 days.

There is an alternative to these methods and that is a credit freeze.  A credit freeze puts your credit on “lockdown” and the credit agency will not release your information to anyone.  Without a credit report, thieves cannot open credit in your name even if they have your Social Security number.  The freeze does not impact your ability to access the credit you already have open (credit cards, line-of-credit, etc.) – it prevents new credit.

How do you do it?  You must contact each agency to place a freeze on your credit.  When you place a freeze on your account they will provide you with a Personal Identification Number (PIN).  You will need to write this number down and keep in a safe place.  It will be required if you need to temporarily or permanently lift the freeze.  The freeze can be temporarily lifted for specific dates or specific parties when you need to obtain new credit.

A credit freeze is not for everyone.  There are fees to put the freeze on and fees to lift the freeze.  If you access credit frequently those fees can add up.  Also, you will need to plan ahead.  In some cases it takes 3-5 business days for a temporary lift to be established.  While the fees vary by State, the following is a list of fees for California residents:

All of these services are free if you’ve been the victim of identity theft.  You must provide the credit agency with a copy of the Law Enforcement Identity Theft Report.

If you don’t access new credit very often, a freeze may be the simplest and least costly method to protect yourself.

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