In a world of increasingly sophisticated hackers and identity thieves, credit protection is important to safeguard your personal information. The good news is there are more tools than ever at your disposal—but where to start? The best strategy is a two-pronged approach to prevent any new accounts from being opened without your permission and to monitor the sources of credit you already have.
If you think of your credit as a house, the first and most obvious way to protect it is by installing a strong lock. A credit freeze on each of the three major credit reporting bureaus (Experian, Equifax, and TransUnion) prevents anyone from opening new accounts in your name. This means a thief can’t open a new credit card or apply for a loan in your name.
The caveat to this strategy is while no thief can open new accounts, neither can you (without taking additional steps.) For example, if you are at the checkout counter and the clerk offers to sign you up for the store card to save 10% off your purchase—you won’t be able to open this card while your freeze is in place. Some people may consider this extra obstacle to impulse buying a positive, but for others it’s a nuisance. However, as long as you pause your credit freeze, you can easily sign up for a new card, buy a car, etc. Pausing takes mere minutes and can be accomplished either online or over the phone. You can also specify a range of time to pause your credit, such as if you know you are looking for a new apartment over the next few weeks, etc.
The simplest ways to set up a credit freeze is either online at the credit bureau’s website or via mail. During the process, you will create a PIN which you will use to pause or lift credit freezes in the future—be sure to choose a strong PIN and guard it carefully.
Thinking back to the house example: while your lock will discourage any new thieves, what do you do if a thief made it inside before the lock was installed? Similarly, what do you do if someone gains access to your account number? Think of a credit monitoring service as the security cameras.
Credit monitoring services carefully monitor all open accounts and lines of credit in your name and report any unusual or malicious activity. These services can also review whether your personal information (such as social security number) is used for any fraudulent purposes. Furthermore, many credit monitoring companies also include services to assist if any identity theft does occur. A good credit monitoring service will also:
- monitor all three credit bureaus (Experian, Equifax, and TransUnion)
- monitor the dark web and alert you if they discover any of your personal information posted.
- include identity theft insurance to help cover the costs of resolving any credit disputes.
When choosing a credit monitoring company, review the services offered between competitors. Services can range from basic to more comprehensive and result in a wide range of prices. Note that many companies may offer free monitoring services, but there is a trade-off between price and quality of coverage.
While credit freezes and monitoring services are important steps to take towards credit protection, it is important you are still proactive regarding protecting your identity (examples: choosing strong passwords, enabling two-factor authentication, and shredding important documents). Please consult with your advisor for more information about setting up credit freezes, choosing a credit monitoring service or for additional credit protection recommendations.
Important disclosure information
Please remember that different types of investments involve varying degrees of risk, including the loss of money invested. Past performance may not be indicative of future results. Therefore, it should not be assumed that future performance of any specific investment or investment strategy, including the investments or investment strategies recommended or undertaken by RegentAtlantic Capital, LLC (“RegentAtlantic”) will be profitable.
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This article is not a substitute for personalized advice from RegentAtlantic. This article is current only as of the date on which it was sent. The statements and opinions expressed are, however, subject to change without notice based on market and other conditions and may differ from opinions expressed in other businesses and activities of RegentAtlantic. Descriptions of RegentAtlantic’s process and strategies are based on general practice and we may make exceptions in specific cases.
RegentAtlantic does not provide legal or tax advice. Please consult with a legal and or tax professional of your choosing prior to implementing any of the strategies discussed in this article.