Earlier this year, the personal data of 143 million Americans was compromised by a software breach of credit agency Equifax. With many scrambling to set up fraud alerts and freeze their credit, Your Money editor Lauren Lyons Cole explains why you shouldn’t freak out about the Equifax breach and what you can do to protect your credit information. Following is a transcript of the video.
Equifax was hacked and you were probably affected. 143 million Americans had their social security number and other personal information exposed to hackers over the past few months at Equifax. You might not even know what Equifax is, you really probably wouldn’t probably wouldn’t have had reason to know what Equifax was until this happened, but it’s a credit reporting agency. It basically collects everything you ever do, your names, your addresses, your credit information, and they pooled it all in a database, and that database was breached.
People are pissed, and I understand, it’s a really big problem, but here’s the thing: your online security has never been safe. People probably have seen your social security number before. Just think about when you go to the doctor or you call your bank. We tend to give it out pretty freely, so whether or not your personal identity is stolen is kind of a crapshoot.
You’re better off assuming that your identity has been hacked because it definitely could happen if not this time, some time in the future.
So what do you do about it? You’ve got a few options. Number one, and this is the one that everybody knows and nobody wants to do, you have to have secure passwords. This is incredibly important because if somebody gets access to one of your accounts you can mitigate the damage that might be done by making sure they don’t get access to all of your accounts. For every single account I have, I turn on two-step verification if I can. My password is a completely random string of numbers and letters and characters that I store in one of those password management systems like LastPass.
You’ve probably heard that you should freeze your credit or set up a fraud alert and yeah, maybe you should do that. The thing is, it takes a lot of work and not everyone is going to end up having their identity stolen. So that’s the sort of step you can take if or when someone tries to open a new account in your name.
People are going to disagree with me. A lot of people think you should do this and maybe you should. It’s going to take time and there’s no guarantee your identity is getting stolen anyway, so if you don’t really want to do that just know that you’re taking the risk that it could be a bit of a nightmare later.
So if you decide you want to set up a fraud alert, you have to call one of the credit bureaus. There’s three: Equifax, Experian, and TransUnion. The phone call itself isn’t too hard, but you will have to mail in supporting documents after the fact, things like your driver’s licence or other identifying information so that they know it’s really you who put the fraud alert and not some random other person.
In the future, when you need credit, whether you need a new credit card or you’re trying to buy a home, you’re going to have to go through extra steps to prove that it’s you. That’s the whole point of doing one of these credit freezes. You don’t want to make it easy for the hacker to gain access to your credit, but it will also make it harder for you to gain access to your credit.
It’s hard enough if you’re trying to buy a house or let alone take out a new credit card, but adding another layer where you also have to contact all the credit agencies again and tell them, “Hey, yeah, I promise it’s me, please give all these documents to the people who need to see them.” That’s just another step that you may or may not be willing to take.
Whether or not you decide to freeze your credit or set up a fraud alert, make sure that you’re monitoring all of your accounts regularly. I use Mint.com, you can use your own banking apps, whatever works for you but you need to stay on top of your money. I’ve actually had my credit card stolen twice and both times I caught it before the first transaction even processed. So the more you pay attention to it, the less likely you are to suffer the consequences.
So whether or not you take all sorts of proactive steps like setting up a fraud alert and freezing your credit, just know it’s going to be luck whether or not it happens to you.
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