This month, we got the bad news that hackers stole names, Social Security numbers, birth dates, addresses and driver’s license numbers for more than 140 million Americans by breaking into the computer files of Equifax, the credit reporting agency.
What should you do to protect yourself? We brought that and other questions to John Ulzheimer, a national credit expert.
I'm told I should "freeze" my credit reports. What is a freeze and should I do it?
A freeze will stop anyone (including you) from opening a new credit card, loan or apartment application in your name.
That is important because the Equifax hackers obtained social security numbers, names and birth dates, which are key to applying for new accounts.
A freeze will not affect your ability to make purchases with your credit cards.
So yes, says Ulzheimer, it is a good protective move. And he recommends maintaining the freeze indefinitely, except for when you need to temporarily un-freeze your reports (more on that below).
So how do I freeze my credit reports?
There are three credit reporting agencies (Experian, Equifax and Transunion), so you should freeze all three of your credit reports.
Each site will ask you to create an account with a PIN number, pay $1o and activate your freeze. The freeze will remain in place until you say so, Ulzheimer says.
Each state has its own rules for security freezes. Here are California's rules.
Keep your login and PIN information handy, because you'll need them if and when you want to unfreeze these reports.
What happens when I next apply for a new apartment, credit card or loan?
You will need to un-freeze or "thaw" your three credit reports.
To do that, you'll return to the Experian, Equifax and TransUnion websites, log-in with your PIN numbers and pay $10 on each site to thaw each credit report.
Ulzheimer says it can take some credit agencies two to three days to process a thaw request.
While you're logged in at Experian, Equifax and Transunion, you should also set a date to "re-freeze" each credit account. Re-freezes are free (they're included in the cost of the thaw).
There is one exception: If you apply for a job, and your potential employer wants to run your credit, you do NOT need to unfreeze your account. The employer will be able to look at your credit report, even with a freeze in place, Ulzheimer says.
What about my current credit cards? Did hackers get that info, too?
They might have, although it's less likely. According to Ulzheimer, the Equifax hackers obtained credit card numbers for about 200,000 Americans (that's a relatively small number compared to the 143 million Americans who had their social security numbers exposed).
So, while it is possible that illegal purchases could be made using one of your existing credit card numbers, you should be more concerned about someone opening new lines of credit in your name. Ergo, the credit freeze advice above.
Now, if you're still worried about hackers going on a buying spree with your credit card numbers, you can pay for monthly credit monitoring. It costs about $15 per month, and Experian, Equifax and Transunion all sell this service.