Friday, September 8, 2017

How I am Protecting My Credit Report

Today most Americans (about 143 million people) are waking up to the news of their personal information such as Social Security numbers, names, date-of-births, and in many instances driver's license numbers stolen from Equifax.

Equifax is one of the three credit information provider companies that collect and provide credit information to lenders such as credit card companies and banks. They are the ones who maintain our credit scores which then along with other personal information such as credit history is used to determine if we are worthy of a new loan or a credit card.

The use of our credit information is not just limited to financial companies, insurance companies and in many instances, employers use these services to get our credit reports to see whether we are worthy of a insurance discount or even a job.

In a nutshell, our financial lives depend on what is in our credit file and therefore the information in our credit file and the access to it must be safe guarded at all times.

With the recent data breach reported by Equifax yesterday, basically anyone who has ever used a US based credit card or taken a loan or mortgage is vulnerable to Identity Theft and loss of credit worthiness as bad guys can use the stolen information to do bad things such as opening fraudulent accounts and ruining our good credit or even worse causing personal hardship as people can't get insurance or jobs because of damage to their credit history.

Given the number of people impacted, the Equifax data breach is by far the worst ever and should not be taken lightly.

BTW, you can go to Equifax's special security website https://www.equifaxsecurity2017.com/ to check whether you are impacted by the security breach. Though, regardless of what it says, I think people should take steps to put additional protection on their credit information as we can't totally trust the information we are getting from Equifax on the extent of who is impacted and who is not.

Here is my impact status using Equifax tool :(
When I click on the Enroll button, it tells me my enrollment date for free credit monitoring is 09/12/2017. They should be providing immediate free enrollment to credit monitoring to anyone who may be impacted without any further delay!

I didn't want to wait for the enrollment date to protect myself, so I've taken steps to prevent or at least minimize risk from this data security breach. I would say, don't wait another day to protect yourself, as it gives one more day to the bad guys to use your information and cause irreparable damage to your financial and personal lives.

Here are some of the steps I have taken so far to protect my credit report and personal information, I recommend you do the same or take similar steps to safeguard your financial and personal information:

Lock Your Credit Report

After learning about Equifax breach, the first thing I did is locked my credit report across all three credit bureaus: Equifax, Experian, and Transunion. Here is what locking does to a credit file:

Source: TransUnion
Nice thing about TransUnion is that they allow credit report locking for both TransUnion and Equifax. In other words, you don't need to signup with Equifax if you don't want to take their free offer (it's hard to trust a company to protect us when they are the one responsible for data breach).

I have had credit monitoring service through Equifax for many years and the Lock feature was already turned-on for Equifax credit file. For the other two credit bureaus, I had to sign-up and then set the lock on their respective credit reports.

Here are the screen shots of my credit report locks across all three credit service bureaus:

Source: Equifax
Source: TransUnion

Source: Experian
Since TransUnion can provide credit report locking capability across both itself and Equifax credit reports, a membership with TransUnion and Experian could be sufficient to lock down your credit report across all three credit bureaus.

By locking down my credit report across all three credit service companies, I'm ensuring that nobody can access my credit information to open new accounts without my authorization.

There are a few exceptions to the report lock such as my existing banks the ones that I already have a credit or accounts with can still access my credit report while blocking access to any new account or unauthorized credit inquiries.

Alternatively, I could have put a Security Freeze on my credit report, but security freeze is not flexible and a hassle and can be expensive. It is a more extreme measure as it prevents anyone - including you - from obtaining new credit. Each time you set or unset the Security Freeze you have to call the credit bureau, provide them your PIN and pay a small fee such as $5 - $10. I believe the fee for Security Freeze varies by State.

Updated 9/10/17: There are reports that auto-generated PIN used in Equifax Security Freeze is not secure due to how it is generated using a date/time format. Check this link for more info. Equifax: woeful PINs put frozen credit files at risk

Update on 9/11/17: Per New York Times report, Equifax would soon be changing the Security Freeze PIN generation and reset request process amid questions raised about its PIN's security. The company expects the change to be effective within 24 hours. Anyone who has already got a PIN for Security Freeze should get a new randomly generated PIN based on the new changes.

You create your own password to control access to the Locking feature instead of a Equifax auto-generated PIN, and therefore, is more secure than a PIN. This is another reason why I would use Locking + Monitoring feature rater than the Security Freeze.

The credit report control or lock feature normally comes in a bundle which includes credit monitoring, unlimited credit reports, credit scores, and few other features. So it's more of a packaged deal than a standalone Security Freeze. Though for some, the standalone Security Freeze may be a cheaper option, especially if they don't need all the other features and don't need to freeze/unfreeze too often.

Per Equifax:
The primary difference between Equifax Credit Report Control and a security freeze under state law or the Equifax voluntary freeze program is the ease of online access.
Here is the link to Equifax's full explanation: What is the difference between an Equifax Credit Report Control™ lock and the security freezes available under most state laws?

In summary, with the Credit Report Control or Lock feature, I essentially get the similar protection as the Security Freeze but with the flexibility to lock/unlock my credit report as I please to allow temporary access to creditors and without the vulnerability of auto-generated PIN.

Get Credit Monitoring

When I signed up with the credit service companies, I also received credit monitoring as part of the membership. Depending on the type of membership you get, you can get either single or multiple bureau credit monitoring.

Credit monitoring service provides you alerts when someone tries to access your credit report to apply for a new credit card or a loan. You also get an alert when a new bank or credit card account is opened in your name.

Credit monitoring and locking service membership normally costs around $10-$20 per month per bureau.

Here is what I'm paying to protect my credit report:

Equifax (www.equifax.com): $17.95/mo - It covers full three bureau credit monitoring and credit report lock feature. This membership should be free now due to the security breach. I will be calling them on Monday to get this service for free. They owe us big time!

Warning: It has been reported in the press that there are fine prints when signing up for the free monitoring service with Equifax where they make you waive your rights to take them to the courts by requiring arbitration. So be careful signing up for Equifax free credit monitoring service.

Update on 9/10/17: Equifax has now come out and said that the arbitration requirement clause in the fine print does not apply to this security breach.

I've been using Equifax's paid credit monitoring service for years, so I may just skip the free service if there are fine prints that prevent me from participating in a class action against Equifax. I guess, I will find out when I try to sign up for the free service on 9/12/17, I will still try to call them and ask for a waiver on my existing membership fee.

You could sign up with the other two credit service companies (TransUnion and Experian) and leave out Equifax.

Experian (www.experian.com): $99.99 for 1-year subscription, includes Credit Lock and single company credit report monitoring. That's less then $10 a month. They also scan for your SS#, email, and other personal data on the dark-web and inform you if any of your personal information is found lingering out there.

TransUnion (www.transunion.com): $19.95/mo - They advertise $19.95/mo on their website for the full service membership, but I googled and was able to find a better deal at 50% discount. The $9.95 membership has a fewer less features than the full blown membership, but it has the essential features such as credit report locking (covers TransUnion and Equifax) and 3-bureau credit monitoring which is all I wanted and consider good enough for the protection I need. Here is the link to the TranUnion 50% discount credit monitoring membership: 50% discount link

Set A Fraud Alert

If you don't want to pay for credit monitoring or locking then you can go with the free Fraud Alert.

You can put a free 90-day fraud alert on your credit reports by calling any of the three credit reporting companies. When you alert one credit reporting company, it in turn is legally obligated to share that alert with the others.

When you have a fraud alert set on your credit report, a lender must contact you to verify that you are the one who is applying for credit/loan and not someone else pretending to be you.

The problem with fraud alert is that it is only good for 90 days and you will have to remember to set it again every 90 days. It can also be a hassle as you will have to call each time to set the alert.

Get New Credit Cards

Since the security breach at Equifax includes credit card numbers, I have called my credit card company and asked them to send me a new card with a new number. They basically cancelled the old card and issued me a brand new one.

I think this one is really easy and costs us no money to protect against fraudulent credit card purchases, so everyone who have a reason to be worried about the breach should do this.

Alternatively, you should closely watch your credit card transactions to make sure there are no fraudulent charges.

Conclusion

For now, I am sticking with the credit report Lock and Credit Monitoring across all three credit services. I already have apps from each bureau on my iPhone that I can use to lock/unlock at a moment's notice while monitoring alerts. It will cost me some money to put these safeguards in place, but it is necessary at the moment and money worth spending.

It's ironic that a company that we trusted to protect our credit information is the one that got hacked, but nonetheless, damage is done and water is under the bridge. Getting mad or upset is not going to do much to stop the bad guys who probably already have our personal information by now.

We have to take concrete steps to prevent misuse of our personal information by taking control of who gets access to our credit information and monitor our credit reports vigilantly. Good luck to you all!

Disclaimer: I am not affiliated with any of the companies listed in this article. I'm only sharing what I've done to protect my credit report amid Equifax's security breach. The information I have provided above is accurate to the best of my knowledge and at the time of writing this article. Before signing up with any of the services mentioned above, please ensure to read and understand the features you are getting, the level of protection, and the overall cost. 

11 comments:

  1. Thanks for this information Mr. ATM. I actually wasn't aware of the data breach until I read this post. I checked the site and, apparently, I too was affected by the breach. A sad day indeed.

    I'm going to explore the options you suggested. I do check my credit report every week - mainly to keep up with my score, but to also see if there's any errors on my report. I also have several monitoring services going on to help me monitor my credit report. Actually, those monitoring services are free to me because of previous breaches like the one that happened to Equifax.

    I really didn't know about credit locking before reading your post. I heard about credit freeze, but you're right in that it's too much of a hassle, but it also offers you the most protection. Credit locking seems like a good idea, and so I'll definitely explore the option come Monday.

    So, long story short, thank you for this post!!!

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    1. You are very welcome DP and glad you are monitoring your credit report. Though, I highly recommend locking/freezing your credit report across all three credit bureaus as monitoring is only reactive and doesn't stop the bad guys from accessing or opening a new account.

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    2. Due to the recently reported Equifax PIN vulnerability (see my update in red), I would say locking or putting fraud alert are the only two options to protect credit report.

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  2. Thanks for this as well. I was impacted too. I read that 147 million people were, so my guess is that almost all Americans who use the service (or, apparently, about half of all Americans) were impacted. That's incredibly serious - one wonders whether the company will manage to stay afloat afterwards. Especially if lots of fraud occurs with the stolen data. I guess we'll see...

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    1. Sorry to hear you are impacted. Yes, it's an incredibly serious breach and we will feel its impact for years to come

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  3. Thanks for sharing this, Mr ATM! Although I'm not impacted because Equifax claims Canadians were not a part of the breach, I am astounded at the sheer amount of people that this affects. Also, even though I work in Canada, it has already impacted my day job too. I work in a related industry in digital communication and will surely receive a lot more inquires about this. Best of luck with this situation! It sounds like you've got it under control. Take care.

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  4. Thank you for the valuable information. It really is frustrating that this stuff happens. I work in IT and this is the world we now have to live in unfortunately. I'm thinking about doing that credit report lock tomorrow.

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    1. Yes very unfortunate and it's probably going to get worse. Take care.

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  5. Thanks for this article! I'm curious why you describe the credit freeze as more expensive than credit locks? Based on the prices quoted for the credit locks, you're paying $554.79 yearly. However, with a freeze it's $5-$10 to set up and temporarily lift. So in my case it'd be $30 to freeze, and then another $30 to temporarily lift it when I want to apply for a new credit card or a loan. Which I can only envision doing a handful of times, realistically probably 3 tops. I get there's more hoops to jump through with the freeze, but it seems to be drastically cheaper than paying for the lock service.

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    1. Credit report lock would cost me about $20/mo across all three credit bureaus ($9.95/mo each for Experian and TransUnion, and Equifax for free) that's about $240 per year.

      With Credit Freeze, $60 per cycle of Freeze/UnFreeze, you do it 3 times a year, that's $180.

      So yes, Freeze would be cheaper than a Lock. However, credit lock normally comes in a package deal with additional features such as credit monitoring, free unlimited credit reports, identity validation, credit scores, and insurance. So overall, it seems a better deal, at least to me. Not to mention ease of use is important to me as I don't want to have to send my driver's licences copy to these services each time I need to Freeze/unfreeze my credit report.

      Therefore, I think when you look at comparing lock vs. freeze feature, you need to look at all the other features that come with the lock in the membership as well as the flexibility before deciding which one to pick.

      Though I agree with you, if you don't care for the other features than the Security Freeze would be a cheaper option.

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