Between Equifax and the Yahoo breaches, millions of Americans and billions of accounts were exposed. Rather than rant and rave about how security violations happen, I’d like to focus on how to take control. Given the laws of probability, we all experience some kind of fraud or exposure. Many of the tips shared below I’ve done, or we’ve helped clients straighten out the messes caused by fraudulent activity.
Anatomy of a Social Security Number
Did you know the last four digits are the most important numbers in your social security number? Those last four numbers are unique to you. All the other digits are assigned based upon where you lived when the card was originally issued to you. The first three digits represent an area number. The middle two digits are “central” or a group number and aren’t related to a particular geographic area. Curious what your social security number says about you? Check out this primer.
Lock Down Your Credit
In a recent Bankrate article, they recommend assuming your identity has been compromised. Consider freezing your credit at all three credit bureaus. The upside is that freezing blocks fraudsters from applying for new credit. The downsides are: 1) you may have to unfreeze your accounts when applying for new credit, (e.g., car loan) or opening a new service (e.g., cellphone) and then refreeze them afterward, and 2) it can be a time-consuming process when applying for a new credit account.
Potential fraud aside, freezing your credit has another benefit especially if you’re struggling with credit card debt. The average American family owes $8,377, which is 6% higher than last year. While locking down your credit doesn’t help you with outstanding debt, it’s a psychological stake in the ground. Start your New Year’s resolutions early and vow to pay down those cards and avoid taking on new debt obligations.
In this Simple Dollar article, there are links to all three credit bureau freeze forms.
Paid Monitoring Services
If freezing your account is not your style, a paid monitoring service might be the solution. LikeLock is one option; it may get expensive depending upon the plan. Many of my clients use EverSafe (it’s an AARP award winner) and they offer discounts for family members and seniors (60+).
There are many other identity theft monitoring providers, so I recommend you do your due diligence to find the right service for your needs and budget. Such providers typically monitor:
- Credit file activity
- New loans
- Requests for change of postal address
If you are affected by fraud, most paid service provides will also help you restore your credit.
There are also free monitoring services like CreditKarma. Curious about your credit score or want to build up creditworthiness? Then this may be the service for you. Receive alerts if anything important changes on your TransUnion report as well as get access to financial calculators and educational articles. The service is free because CreditKarma partners with financial providers; you’ll receive recommendations (and approval odds) based upon your credit file. If you’re already a CreditKarma user, check your profile settings to see which alerts are checked. I recommend you at least check: 1) credit monitoring, 2) large purchases where you set the amount, and 3) credit limit changes.
Credit Sesame offers a similar service, and you can upgrade to a premium account for monitoring of all three credit bureaus.
Free Fraud Alerts with Each Credit Bureau
Did you know that under Federal law, if you put a fraud alert on one credit bureau, they must notify the other two? If you’re one of the many Americans concerned by the Equifax breach, place a fraud alert on your credit. Fraud alerts make it harder for identity thieves to open more accounts in your name. An initial alert lasts at least 90 days. An Extended Fraud Alert can last seven years. This FTC article provides an excellent overview of the fraud alert process.
Don’t forget that you’re also eligible by law to receive an annual review of your credit report for free.
Super Safe Passwords & Other Not So Safe Items
I’d be remiss if I didn’t address safe passwords, especially to online banking accounts. “123456” is still the most common password, according to a CNN Tech article. We all know the importance of difficult-to-hack passwords. We should also have unique passwords each for each account. I can hear you now… “but that’s such a hassle and I can never remember them!!” Consider a password vault (like LastPass) or other solution to generate passwords that aren’t easily guessed or hacked by brute force software. In light of the Equifax and Yahoo attacks, it’s a good idea to update the passwords on all your accounts.
Lastly, remember that sending sensitive information via email isn’t a good idea. Oh, and never log into bank or sensitive accounts on a public computer. While I’m not promoting paranoia, caution is warranted. Hackers are very crafty at getting our personal and private information. Better safe than sorry.
We’re Here to Help
Feel like your financial life is in disarray? Need help in paying your bills or creating a workable spending plan? Contact me for a complimentary 30-minute consultation.