More than a year has passed since the massive data breach at Equifax that put highly sensitive information about 148 million Americans at risk. It sent many people scrambling to freeze their credit reports or place fraud alerts and subscribe to credit monitoring services.
Consumers no longer have to pay a fee to establish or lift a credit freeze. Thanks to Congress, freezing your credit — which lets you restrict access to your credit report, which makes it more difficult for identity thieves to open new accounts in your name — now is free and easy.
Applause is unnecessary. You would think that a system that could track hundreds of millions of Americans’ entire financial histories using computer programs also could figure out a way to limit access to that information. The fees simply rewarded bureaus for not doing their job well, engendering fear and encouraging people to pay to freeze their accounts.
A freeze keeps someone from accessing your information to create new accounts. If you’re applying for insurance or a mortgage, you will have to unfreeze your account. And you must enact a freeze at each of the three major credit bureaus: Experian, Equifax and TransUnion.
The freeze will last until you lift it. But that was not always the case, so if you froze your credit after the breach last year, make sure you check up on it at each bureau and, if necessary, reinstate it under the new rules.
Or you can place a fraud alert on your account. Under the new law, the alert must last at least one year (as opposed to the previous 90 days), and it requires the bureau to use extra diligence and to notify you if someone tries to open a credit account in your name. Set up an alert at one major bureau, and the other two will be notified automatically.
One less noticed feature of the new law is the ability to set up a freeze on your child’s credit report. No, infants and toddlers can’t get credit. But because most parents apply for a Social Security number for their child at birth and then never check on it until perhaps the teen applies for a driver’s license, there is plenty of time for an unscrupulous person to steal the information and start using it for credit fraud.
Note: There is no age identification on a Social Security number, so a new, fraudulent credit history could easily be built.
This is not a minor issue. According to Javelin Research, more than 1 million children — or 1.48 percent of minors — were victims of identity theft or fraud in 2017. Two-thirds of those affected were age 7 or younger. Experian estimates that one in four minors will become victims of identity theft before becoming an adult.
The new law that went into effect Sept. 21 allows a parent to set up an account for a minor child with the credit bureaus and then freeze the account. First, ask each bureau to run a manual credit report check using your child’s Social Security number — just in case someone else has used that number to establish credit.
If your child has become an identity theft victim, go to www.IdentityTheft.gov/steps and scroll down to the section on child identity theft. It will direct you how to get that account removed and report the fraud.
Consumer credit expert Gerri Detweiler of Nav.com, advises: “If it was too much of a hassle to freeze your credit last year, please reconsider. It will now be free, and hopefully a lot easier — and permanent.”
Good advice. And that’s The Savage Truth.
Terry Savage is a registered investment adviser and the author of four best-selling books, including “The Savage Truth on Money.” She responds to questions on her blog at TerrySavage.com.