Types of Identity Theft Protection

Taking Control of Your Credit Identity

It may begin with confusing collection calls for debts you don't owe and quickly progress to credit damage, application denials and even lawsuits. It's identity theft--and no one is safe. Even if you take extreme measures to prevent your personal information from falling into the wrong hands, identity thieves often scour public records for the names and Social Security numbers of potential victims.

Even if you have been vigilant about protecting your important personal information, you can still become a victim of identity theft. All it takes is for one purchase on an unsecured website, an improperly delivered piece of mail, or a stolen credit card for an identity thief to latch onto your identity and redesign it for his own use. This type of thief is quite skillful at stealing other people's information and using it to pay for all sorts of property and services.

The belief that you are in complete control of your own life can get you into some pretty serious trouble. Your unique identity, your reputation and especially your credit scores are ruled by your own actions, but only to an extent. To be absolutely certain that your life and your identity are under your own control, you need to take identity theft prevention measures.

Here are a few options that may help you decide which alternative provides the most value and best fits your needs;

Fraud Alerts;

Fraud alerts can help to guard against becoming an identity theft victim by placing a notation on your credit report from each credit bureau instructing creditors to contact you by phone to verify that you have, in fact, authorized a credit check.  A fraud alert poses no obstacle when you decide to legitimately apply for a new loan or credit card. Should an identity thief apply for credit in your name, however, a quick telephone call from the creditor due to a fraud alert within your credit file can thwart a potential thief.

As a rule, the credit bureaus do not share consumer information with one another unless an individual requests a fraud alert. If you decide to make the request, however, informing only one credit bureau may not be enough. Although the credit bureaus claim to cooperate with one another to help prevent identity theft, the only way of knowing for sure that you have a fraud alert on file with each credit bureau is to notify each bureau separately. You may file fraud alerts with both Experian and Equifax online. TransUnion does not offer online alerts, but you may request a fraud alert either via telephone or by mail. Fraud alerts must be renewed every 90 days.

Don't allow the fact that you have a fraud alert on file with the credit bureaus lull you into a false sense of security. While fraud alerts should help -they aren't foolproof. Unfortunately, there is no law that mandates lenders call you before extending credit in your name--even if you place a notation within your credit file requesting them to do so.

There are two types of fraud alerts: an initial alert, and an extended alert.

    * An initial alert stays on your credit report for at least 90 days. You may ask that an initial fraud alert be placed on your credit report if you suspect you have been, or are about to be, a victim of identity theft. An initial alert is appropriate if your wallet has been stolen or if you've been taken in by a "phishing" scam. When you place an initial fraud alert on your credit report, you're entitled to one free credit report from each of the three nationwide consumer reporting companies.
    * An extended alert stays on your credit report for seven years. You can have an extended alert placed on your credit report if you've been a victim of identity theft and you provide the consumer reporting company with an "identity theft report." When you place an extended alert on your credit report, you're entitled to two free credit reports within twelve months from each of the three nationwide consumer reporting companies. In addition, the consumer reporting companies will remove your name from marketing lists for pre-screened credit offers for five years unless you ask them to put your name back on the list before then.

Although the credit bureaus' fraud alert system is one option -it isn't a magic bullet and will not prevent an identity theft from occurring.

Credit Freeze

A credit freeze is different from a fraud alert in a number of ways. A freeze generally stops all access to your credit report, while a fraud alert permits creditors to get your report as long as they take steps to verify your identity.

A credit freeze is free to identity theft victims who have a police report proving they have been victims of identity theft. For individuals who are not victims of an identity theft, the cost is $10 per credit bureau, or $30 for all three bureaus to freeze your credit. To place a freeze on your credit file, you must write to each of the three credit bureaus, provide your identifying information and include your payment to each bureau. Freezing will prevent you from opening a new account yourself, applying for a job, renting an apartment, or buying insurance, if your credit report needs to be accessed by a creditor. Once your file is frozen, if you want to open a new credit account, refinance, or get a new loan, you must "thaw" your credit file. That costs money too. Credit freezes can't block thieves from accessing your current credit cards or bank accounts.

Who can access my credit report if I place a credit freeze?

If you place a credit freeze, you will continue to have access to your free annual credit report.  You'll also be able to buy your credit report and credit score even after placing a credit freeze.  Companies that you do business with will still have access to your credit report - for example, your mortgage, credit card, or cell phone company - as would collection agencies that are working for one of those companies.  Companies will also still be able to offer you pre-screened credit.  Those are the credit offers you receive in the mail that you have not applied for.  Additionally, in some states, potential employers, insurance companies, landlords, and other non-creditors can still get access to your credit report with a credit freeze in place. 

Can I temporarily lift my credit freeze if I need to let someone check my credit report?

If you want to apply for a loan or credit card, or otherwise need to give someone access to your credit report and that person is not covered by an exception to the credit freeze law, you would need to temporarily lift the credit freeze.  You would do that by using a PIN that each credit reporting agency would send once you placed the credit freeze.  In most states, you'd have to pay a fee to lift the credit freeze.  Most states currently give the credit reporting agencies three days to lift the credit freeze.  This might keep you from getting "instant" credit, which may be something to weigh when considering a credit freeze. 

What does a credit freeze not do?

While a credit freeze can help keep an identity thief from opening most new accounts in your name, it's not a solution to all types of identity theft.  It will not protect you, for example, from an identity thief who uses your existing credit cards or other accounts.   There are also new accounts, such as telephone, wireless, and bank accounts, which an ID thief could open without a credit check.  In addition, some creditors might open an account without first getting your credit report.  And, if there's identity theft already going on when you place the credit freeze, the freeze itself won't be able to stop it.  While a credit freeze may not protect you in these kinds of cases, it can protect you from the vast majority of identity theft that involves opening a new line of credit.

Identity Theft Protection & Restoration Services

Recent headlines about data breaches and losses of personal information have prompted many companies to advertise products or services to help consumers prevent or minimize their risk of identity theft.

The Federal Trade Commission (FTC), the nation's consumer protection agency, says before you pay for an identity theft prevention product or service, make sure you understand exactly what you're paying for. Many people find value and convenience in paying an outside party to help them exercise their rights and protect and recovery their name and date.

Knowing and understanding your rights can help you determine whether--or which--commercial products or services may be appropriate for you.

Neither a fraud alert nor a credit freeze can stop a criminal from using your name to commit other crimes. Remember, your identity is much more than just your credit report. There's no protection that's one hundred percent fool-proof against identity theft. None.

There are many companies that offer to take on the task of protecting your identity and recovering it if a criminal steals it. Coming from my experiences as an ID theft victim, I can tell you first hand, the peace of mind and value of having someone in your corner to turn to, once discovering your information has been compromised is immeasurable to me. 

Before hiring one of the many services on the market today, take the time to compare the services offered, learn whether or not they include proactive technological services, restorative services and determine which services offer the most value to you.

Whether you freeze your credit, flag it with fraud alerts, purchase credit monitoring services or hire someone to take these steps for you, it is still impossible to be certain that you will never become a victim of identity theft. However, before you find yourself in the unfortunate situation of having to spend months or years clearing your name and credit, you need to take safeguards to lessen the odds and impact of an identity theft. The best way to avoid an identity theft is to prepare for one.

Credit Monitoring

Credit monitoring services are heavily advertised, and many people have the impression that these services alone will provide a high level of protection against identity theft. This is a serious and potentially harmful misconception.

Credit monitoring is offered by most banks and all three credit bureaus. Sometimes the service only includes monitoring one bureau's report, which is a problem, since many creditors don't report to all three bureaus. The credit report you are monitoring may not be the one a fraudulent account is reported to.

Another problem with credit monitoring services is that they're designed to inform you of any changes to your credit report; this sounds good, but what many consumers don't realize is that the data in credit reports may not be recorded in "real time." If you purchase something on credit today-do you know when the creditor will report your activity to the credit bureaus? Or when the credit bureaus will update you file? Credit monitoring services are reactive in nature-not proactive. The services are designed to let you know about a problem only after it occurs. If you are considering credit monitoring, find out if it they monitor all three bureaus, if the monitoring is done in real time and whether or not they offer identity and financial recovery services, should an ID theft occur.

Think fraud! If not now, when?

Identity theft Prevention