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Data Breaches: Why Do A Credit Freeze?

Data Breaches: Why Do A Credit Freeze?

Have you frozen your credit report?

My wife and my social security numbers were both exposed during the numerous data breaches that have been occurring over the past few years. I monitor our credit reports using CreditKarma.com and spotted a negative mark on my wife’s credit report. Apparently, she forgot about a charge she made last November at Macy's for $20, which ballooned to $80 because of the late charges and interest. We've since paid Macy's and requested Macy's to remove some of the late fees. They never sent us a bill or notification that the bill was due. So, we are also trying to get Macy's to remove the negative mark on the report. This has been ongoing and we need to monitor the Macy's account because they keep adding the charges back. Last time we checked, there was a $2 balance. It's been a real pain.

While simply monitoring and trying to fix our credit report is important for legitimate and self-imposed reasons, equally important is combating fraud and people trying to impersonate us. Our credit reports are still rated excellent, even with the one negative mark. I feel that all the time we spent trying to take care of this single item was (and still is) very time consuming.

Imagine if someone stole your identity. The time and energy needed to fix something like that would be enormous in comparison. You'd have to file a police report and then send certified letters to each entity that requests it. For a single credit card company, that would be several letters, phone calls and hours of time. Multiply that by the number of accounts that were opened in your name.

Thankfully, there is a good way to drastically reduce the chance of someone from stealing your identity. It is called a credit freeze. I've had my credit frozen with all three credit reporting agencies since 2012: Experian, Equifax and Transunion. I've finally convinced my wife to freeze hers. She finally applied a credit freeze last Friday. Please keep in mind that a credit freeze is not free and in Georgia it costs $3 per freeze, per credit reporting agency. Also, a credit freeze is different from a credit-lock. Freeze your credit. Do not lock it.

Do not fall prey to those schemes for credit protection and monitoring that charge you by the month to protect your credit. Simply freezing your credit will handle most identity theft. You should still monitor your credit. However, use CreditKarma.com, which is free.

To learn more about credit freeze, please visit the following site: https://clark.com/personal-finance-credit/credit-freeze-and-thaw-guide/
Scroll down to "How to freeze your credit with all three agencies" and skip all the other advertisements. Clark Howard's website explains what is a FREEZE and how to remove (or THAW) it. He explains why you would not want to apply a freeze, what are the benefits and so on. Transunion: https://freeze.transunion.com/sf/securityFreeze/landingPage.jsp

Experian: https://www.experian.com/ncaconline/freeze

Equifax: https://www.freeze.equifax.com/Freeze/jsp/SFF_PersonalIDInfo.jsp

More reading:

Forbes had an interesting article, “3 Reasons A Credit Freeze Won't Protect You” https://www.forbes.com/sites/nickclements/2017/09/13/3-reasons-a-credit-freeze-wont-protect-you/ In it, they list three others: Existing accounts Switching your cellular phone number to bypass two-factor authentication

Medicare and Employment Verification Fraud To obtain medical care and prescriptions billed to your Medicare account
To obtain employment, which impacts your taxes

Tax Fraud Someone files your tax return earlier than you. Your real tax filing is rejected.
Another take, someone files your taxes with a very large return. They impersonate the IRS and call you. They say that you must return the money immediately.

TL:DR If you are in the US or Canada, freeze your credit report. Do not lock. Freeze with Experian, Equifax & Transunion.

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