Tom Kerr writing on data protection…

Back in January, I alerted you to ways that the “big three” credit reporting agencies – Experian, TransUnion, and Equifax – can compromise your privacy and sell your personal data.

Now, Equifax has stupendously bungled its security and exposed the credit files of 143 million Americans to criminal hackers.

Adding insult to injury, the company inexplicably kept this most recent data theft a secret from you and me for more than a month…giving the hackers a generous head start. During that time, three top Equifax executives dumped stock they owned in the company. As expected, once the hack was revealed Equifax saw its stock price plummet…so those execs got out just in the nick of time.

All these and shenanigans are just further evidence that credit bureaus cannot be trusted.

Many folks pay a monthly fee for credit monitoring services. Those can be helpful, because they typically monitor any unauthorized use of your identity and alert you that you’ve been hacked. But that’s just basically notifying you that your horse has already left the barn. The fact is that no company offers absolutely bulletproof protection from identity theft.

That’s why you may want to initiate your own DIY safeguard system. You can take independent, proactive steps to help lock down your files…which contain precious details like your Social Security number, credit card numbers, and driver’s license information.

One of the most effective steps you can take to protect yourself is a “freeze” that you can order credit bureaus to put on your credit reports. Once that’s done, nobody can view your files without your authorization. If a crook tries to open a fraudulent account in your name, the lender or credit card company won’t be able to check the file. However, freezing credit reports does not interfere with your current loans or existing credit cards. And your credit score or credit rating is not affected by the freeze either.

Without access to that key information, virtually all banks and other lenders will deny the request…thwarting potential fraudsters from exploiting your identity.

The first time I opted to do a credit freeze was for my mom, who suffered from severe dementia. I had legal responsibility for her finances, and deploying a credit freeze was extraordinarily useful. The whole online process of freezing reports at all three bureaus only took 20 minutes and didn’t cost a penny.

Regulations do vary from state to state, and you may be charged $10 or so to do a credit report freeze or thaw. But that’s a small price to pay for peace of mind. You can find out what rules apply in your state by using the ChexSystems website. It has an index of states, and you can just click on yours for more information. The Federal Trade Commission also provides lots of details about the credit freeze process – including a helpful FAQ section – on its website.

If you want to authorize someone new to check your credit, all you have to do is lift the freeze using a secret PIN provided by the credit agency. Thawing in this way normally takes three business days or less.

I don’t consider that short wait an annoyance either. To the contrary, I think it’s a cool, fringe benefit. That’s because it makes you slow down the process just enough to sleep on it before putting yourself in a position that could land you deeper in debt.

To me, the mandatory timeout to think it over may, in fact, be the best reason of all to freeze my credit reports.

If you can’t wait that long you may need to rethink your approach to consumer spending.

P.S. Discover how you can enjoy a more laidback, authentic, independent way of life in Truth & Plenty. Sign up below to have it delivered – free of charge – to your email inbox.

Image: ©iStock.com/Martin Dimitrov

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