Digital Security Tip
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When big data breaches happen, there’s immediately a lot of talk about credit reports. Security experts recommend you check your credit reports for suspicious activity. To protect your identity, they also recommend you freeze your credit. Here’s what that means and why it’s important.
What’s a credit report? Do I have one?
If you’ve ever rented an apartment, opened a bank account, or applied for a credit card or a loan, you likely have a credit report.
In fact, you have three credit reports. There are three credit-reporting bureaus in the United States: Experian, TransUnion, and Equifax. Each one holds a report on you that contains personal information about your credit history. Your credit reports contain:
- Personal identifying information, such as your name, past and current addresses, Social Security number, and date of birth.
- Current and past credit accounts, such as credit cards, mortgages, student loans, and auto loans.
- Inquiry information, which are instances in which you’ve applied for new loans or credit cards.
- Bankruptcies and collection information.
- Your credit report does not include your credit score.
Why you should check your credit reports once a year.
By law, you are entitled to one free credit report a year from each of the three credit bureaus. You can request your credit reports at annualcreditreport.com. This is the only official and truly free website to obtain your reports. You can also call Experian, TransUnion, and Equifax directly or request your reports by mail.
Checking your own credit report will not affect your score.
You will never be penalized for checking your own report or your own credit score. And checking your report does not impact your score in any way. Experian, TransUnion, and Equifax may offer paid identity monitoring packages or charge for access to your credit score, but it’s always free to check your report once a year.
Though the information on your credit report directly impacts your score, reports don’t actually contain your score. There are many websites, services, and credit cards where you can check your score for free. So it’s usually not necessary to pay the bureaus themselves to see your score.
What to look for to spot signs of the identity theft
When you receive your credit reports from Experian, TransUnion, and Equifax, review them carefully. These are long, dense documents that can be overwhelming, especially if you have a long credit history. Look for accounts or addresses you don’t recognize or any information that is inaccurate. Make sure:
- All the accounts listed are ones you personally opened.
- All addresses listed and your employer are correct.
- Your balances and credit history are correct.
- All hard credit inquiries are from loans or credit cards you applied for. Soft inquiries may be listed, which are from pre-approved credit card offers. These do not affect your score.
Next step: Block unauthorized access to your credit report with a credit freeze.
Placing a freeze on your credit report is the most effective method to stop identity thieves in their tracks. It’s completely free with all three bureaus and will not affect your credit cards, credit report, or credit score. You can continue using your cards as you were before.
Freezing your credit report means only you can apply for new cards or loans. No one else will be able to do this in your name. It’s like putting a lock on your credit report, and only you have the key. You can unlock (or unfreeze) your credit report at any time. For example, you may want to open a new credit card. You can temporarily lift the freeze to do so, then refreeze your credit report again after.
Federal legislation requires credit-reporting agencies to offer free credit freezes and unfreezes. To freeze your credit report with Experian, TransUnion, and Equifax, call them directly or do it on their websites. You may be asked to create a PIN code or they may generate one for you. Keep this code safe, because it’s the one you’ll use if you need to unlock your credit. A password manager is a great place to save your PIN codes.