Before The massive Equifax in 2017, I bet you had never considered freezing your credit. Unfortunately, according to polls even 1 year later, most Americans still hadn’t considered it. According to Forbes, only 22% of Americans have frozen their credit. this is unfortunate because freezing your credit is the single best way to prevent financial identity theft that you can do. In the Equifax breach, the personal credit profiles of almost 148 million Americans were stolen by Chinese hackers. In this post, we will explain in non-techy terms why this breach was such a big deal, what a credit freeze is, and how you can do it. Freezing your credit makes sense for many people, especially as identity theft becomes commonplace in our society.
What happened with Equifax?
In September 2017, Equifax revealed that they had been breached. The personal credit information of nearly 148 million Americans had been stolen by unknown hackers.
The actual attack had started back in May 2017. It was due to a vulnerability in some software that Equifax used for web applications known as Apache Struts. The vulnerability had been disclosed by the Apache Foundation, the creators of Apache Struts, on March 7, 2017. A patch was released and users were advised to patch it as soon as possible. This bug was considered extremely dangerous. Equifax didn’t patch the vulnerability and left their applications exposed.
Chinese hackers attack the United States
In May 2017, hackers from the Chinese government found vulnerable Equifax systems. Once inside, they began stealing the data they could find. This would go on for almost 3 months before they were detected. By this time, the damage was already done.
The good news, if you can call it that, for most Americans is that the Chinese government is interested in using your credit profile. The most commonly accepted reason for this hack was to combine it with data already taken from the US Office of Personnel Management. This breach enabled Chinese government hackers to steal the profiles of every single US government employee worldwide. Armed with this and the Equifax data, the Chinese government could target those with access to the data they wanted and also credit issues. Money is a powerful motivator for government employees to steal data, especially if they are deep in debt.
As I said, that is the “good news”. The next time a breach of this significance happens, we may not be so lucky. But other kinds of breaches happen every day around the country. Our personal information is for sale on the Dark Web and can be used by hackers everywhere.
How does a credit freeze actually work?
A credit freeze blocks access to your credit report by third parties. This doesn’t mean changes to your credit report won’t happen, such as reporting late payments, credit usage, and other normal usages. But what it does mean is that third parties like banks, lenders, and others won’t be able to see your credit profile and add to it. Because of this, while your credit is frozen, you won’t be able to apply for a credit card, get a home loan, buy a new car, etc, until it is unfrozen. While that may seem like it would make your life difficult, the bad guys also can’t do these things to you. When you’re identity has been stolen, criminals will attempt to open credit cards in your name or perhaps apply for loans. A credit freeze stops this cold… pun intended.
This doesn’t mean that it stops everyone from seeing your credit report. Your current creditors and debt collectors can still access your credit report. You will always have access to your credit reports. There are other third parties, such as child support services and marketers who would still be able to access your credit report.
Freezing Your Credit
To get started, you need to contact each of the three credit reporting bureaus. Each one has made the process easy by allowing online enrollment. When you are done, you will receive a pin number. DO NOT LOSE THIS. This is how you will unfreeze your credit in the future, should it be necessary.
- TransUnion or call 888-909-8872
There is no charge for freezing or unfreezing your credit.
Should I freeze my credit?
This is a question each of us has to answer for ourselves. If you are looking to make a major purchase in the near future, such as a car or a home, then you probably shouldn’t freeze your credit. But if you think that your credit is going to be maintained the same way as it is now, then freezing will give you a high level of protection. Criminals are getting smarter and more devious every day. A credit freeze can protect you from the attack types we know about today along with the new ones we don’t yet know about.
Another consideration is if you were informed that your data was involved in a data breach. A credit freeze would stop your information from being by the attackers.
One thing a credit freeze won’t protect you from is fraudulent charges on your current credit cards. It is only designed to stop new credit accounts.
Is there a way to unfreeze my credit?
Yes, when you need to apply for additional credit or a loan, you will need to unfreeze your credit. To do this, you contact the credit bureaus. They will ask for your pin number. You didn’t lose it did you? This will allow you to unfreeze your credit. It usually takes just a few minutes after you do it so you can quickly apply for new credit.
Summary
Freezing your credit is a good way to keep your own credit profile safe from identity theft. It prevents third parties from accessing your credit reports and opening new types of credit in your name. If you don’t think you will need to apply for a new credit account in the near future, then freezing your credit can provide a strong line of defense against identity theft.