If you’ve ever dealt with personal credit fraud, you know what a nightmare it can be. And even if you haven’t dealt with it personally, you probably know someone who has and have heard their horror stories.
Having someone open up an account using your personal information not only feels like a major violation of your privacy, but it can cause some serious damage to your credit, preventing you from being able to get a new credit card, purchase a car, and more.
What’s more, 2019 set a new record with over 3 million reports of fraud to the FTC, 270,000+ of which were reports relating to credit card fraud.
If you’re worried about becoming a victim of fraud, or you want to make sure it never happens to you again, there are two immediate steps you can take that may help you prevent fraud from happening in the first place.
A credit freeze is almost exactly like it sounds. Also called a security freeze, this is a request you make to the credit bureaus to restrict access to your credit report.
Anytime you open a new account, the creditor *should* pull your credit report to approve your request. If you restrict access to your credit report with a credit freeze, this makes it much more difficult for identity thieves to open new accounts in your name.
A credit freeze does not negatively impact your credit score, nor does it prevent you from opening new accounts.
However, it doesn’t protect your existing accounts. So, it’s still important to continue monitoring your bank and credit card accounts for any transactions you don’t recognize.
You can activate a credit freeze by contacting each of the nationwide credit bureaus (Equifax, Experian, and Transunion).
Another option to help prevent fraud is setting a fraud alert. Like a credit freeze, fraud alert is free to initiate and it does not negatively impact your credit score.
A fraud alert does not completely remove access to your credit report but creditors must use information provided by you confirm your identity before opening a new account.
For example, if you provide your telephone number or address to open a new account, the creditor must call you to verify that information.
A fraud alert is slightly easier to activate than a credit freeze. You only need to call one of the credit bureaus to request it and they in turn will notify the other two.
THE BOTTOM LINE:
Fraud can have a devastating effect on your personal credit and if trends continue, the number of cases each year will only continue to rise. It may be time to consider either a credit freeze or fraud alert to protect your accounts