What do Adidas, Delta, Panera and Whole Foods have in common? Besides being businesses you may have purchased something from recently, they’re also among the list of at least 16 big companies that have reported data security breaches since January 2017—resulting in hackers gaining accessing to personal details, like credit card numbers, emails and passwords, they can use to steal our money.
According to cyber security firm Symantec Corporation, 143 million Americans were victims of cybercrime in 2017—more than half the U.S. adult online population—costing consumers more than $19 billion, plus nearly 20 hours trying to untangle things afterwards.
Ouch. What can I do to make sure that doesn’t happen to me?
The best way to spot shady activity is to check your credit report—something more than a third of Americans have never done. If you suspect your information has been compromised (or just want another layer of protection), you can also enable a credit freeze, which, as of September 21, 2018, is totally free of charge.
Is a credit freeze when you put your credit card in a block of ice so you won’t use it?
Not quite. A credit freeze doesn’t prevent you from using your credit cards (a common misconception, according to a University of Michigan study); rather, it keeps other people’s hands off your credit. A credit freeze restricts access to your credit report—which lenders review when issuing new credit—which, in turn, stops identity thieves from being able to successfully use your information to open new lines of credit in your name and potentially wreck your credit.
Will a credit freeze hurt my credit?
Not only will a credit freeze not negatively affect your credit score, but all the good habits you’ve put into place to improve yours—like making on-time payments and paying down debt—still count. And you can still check your credit report yourself, which is a good idea in general. About 20 percent of credit reports contain score-dropping errors that should be addressed ASAP.
Is there a catch?
Just that the credit freeze applies to you, too—meaning you’ll have to “thaw” your credit for your own legit inquiries. So if you’re getting ready to buy a car or home, rent a new apartment or sign up for a new cell phone plan, you’ll want to wait until your activity dies down to instigate the credit freeze.
The good news: Freezing your credit used to cost up to $10 per credit bureau, depending on what state you live in, plus another fee to unfreeze. But under a new law, all three major credit bureaus—Equifax, Experian and TransUnion—must now allow both freezing and unfreezing totally gratis. The bureaus are also required to speed up their response time: Requests made online or via phone must be handled within one business day (three days for snail mail).
But keep in mind that a credit freeze only protects you in the future; it won’t repair damage that’s already been done. So make sure to report lost cards and any activity you don’t recognize on your credit report.
How do I set up a credit freeze?
Simply contact all three credit bureaus by mail, phone or online. Once you make an account, safeguard your PIN and password. You’ll need them to lift the freeze when you’re ready.