Before reading any further, relax. But take it seriously. This is important.
Equifax, one of the three major credit reporting agencies in the United States, was breached and over 140,000,000 people (about 44% of the US population) had their entire credit history stolen. Credit history includes your Social Security Number, past addresses, all previously held accounts, all inquired accounts, any bankruptcies within the last seven years, and more.
How do I know if I was affected?
Are you an American adult that has ever held or inquired about a credit card, loan, car, bank account, cell phone account, electric service, water service, internet service, a security clearance, most jobs, most schools, most apartment complexes, or renting a house? Congratulations! You’re affected! If you’ve ever applied for anything financial related in the United States then Equifax has been spying on you. Not like Big Brother, but Equifax, TransUnion, and Experian spy on you via financial history which every lender and creditor in the nation sends to them.
When did I consent to this?
You didn’t, but that’s the reality. It was likely hidden in the fine print of the first checking account you tried to open or when you inquired about buying a car but let’s be honest – it isn’t consensual regardless. You have no choice because it’s impossible to actually live off the grid and without a credit history. So you’re stuck with the rest of us.
How is this different than other breaches?
Have you heard of the recent breaches with the US Office of Personnel Management Breach, or Target, or Yahoo, or PlayStation Network? This one is not similar to them at all. Target, Yahoo, and PSN don’t keep track of SSNs. They don’t keep track of every bill you’ve ever paid. They don’t keep track of everything you’ve ever thought about buying through financing or credit card. Target, Yahoo, and PSN’s biggest damages were your debit or credit Information being compromised. Big deal; cancel the card and get a new one. With Equifax, you can’t do that. You can theoretically request a new SSN but that request is not likely to be answered, especially on this scale. OPM was the only one similar to this, but that only affected government employees.
So what happens now that my information has been stolen?
Well now you get to play the anti-lottery. 140,000,000+ people, virtually every adult in the United States, has been entered into a lottery of epic proportions. Only in this case you don’t want to win.
What happens if I “win” this lottery?
Then you get to spend literally years fighting to prove to everyone that you are the real you and not the identity thief. During this fight you will not likely be eligible to do anything that requires credit – no cars, no house, no loans, maybe even no utilities or home rentals.This could make your life a living hell for 3-4 years.
How can I improve my chances?
This is where we get to your action items. Here are the processes you should undertake immediately (if they apply to you):
1) Get a copy of your credit report today
Regardless of freeze, alert, or regular credit monitoring get your current credit report to keep on file so you can identify anything new that shouldn’t be there in the future.
There’s really only one true free credit site: Annualcreditreport.com (the rest are all making money off of you)
Why? The Federal Government of the United States requires each of the three major credit agencies give you a free copy of your credit report every year and this is the only authorized site to actually collect on this requirement. The credit agencies have to honor your request. Document this well. Want proof of this claim? Here you go:
But what about the enlightened ads about Credit Karma et al? They’re not free. They might not charge you, but somebody is paying them to do that service. Keep that in mind.
2) Freeze your credit
Call the three credit agencies, the same schmucks that allowed this to happen, and put a freeze on your credit. What does this do? Well, it freezes your credit. Nobody, including yourself, can inquire into your credit for any reason until this freeze is unfrozen.
This does not affect current accounts! Your current loans will be fine. Your score will still go up and down accordingly.
If you are a student or have some other situation where you need to have frequent checks of your credit you can probably safely wait up to 3 months OR initiate a Fraud Alert instead. See the next step.
Does this cost money?
Fees vary by your state. Equifax is waving fees currently.
Does unfreezing cost money? Isn’t this a pain in the butt?
Yes, but only slightly. It will cost about $30 to unfreeze all three when you need to finance something but here’s the bright side: $30 and a few minutes on the phone with an automated system is a heck of a lot easier than the nightmare that will be your identity being stolen. And besides, if you can’t afford the $30 and a day of preparation before financing something – you probably shouldn’t be financing anything anyway.
Does this affect my credit score?
Nope. Your credit will go on as usual, but nothing new can be added or inquired during the freeze. You will still be able to use your credit card.
Here are the phone numbers to initiate a credit freeze:
You must call all three!
You can do this online, but Equifax’s site has been crashing nonstop since the breach was announced. It’s an automated system so the phone route is pretty simple.
What is to stop the credit thief from lifting my freeze?
A long PIN that will be supplied to you when you freeze your credit. This is your only protection so make sure not to lose it! If there is another breach like this while you have the freeze, unfreeze it ASAP, then freeze it again to get a new PIN. Yes, this costs money. It costs less than having your identity stolen.
TransUnion allows you to set your own PIN, Experian will send it in the mail, Equifax will set it for you and give it to you over the phone after your freeze is initiated. IMPORTANT! Do not hang up until you have it written down! You can make it replay the message over and over. Listen to the automated prompts.
Equifax’s phone system may go in and out. RECORD YOUR CALLS or listen very carefully. The * button will make it repeat, but listen to be sure!
3) Initiate a Fraud Alert
If you don’t do a credit freeze, at least do this.
You are a victim of identity theft now. Contact your local police station, tell them you need to file the report to initiate the appropriate processes. They may not know what you’re talking about but they will do it if you explain. If they do not comply you can continue, it will just cost money.
This normally costs money but you’re a victim now. This is why you need the police report/Identity Theft Report. This makes it free. This requires that anyone who wants to run your credit is going to have to jump through extra hoops to verify your identity. This may be a pain for you, but sure as heck a lot less painful than fighting identity theft for years and years.
4) Opt out of pre-screened offers of credit
This incident is probably going to inspire you to get off the grid a bit more. Tired of junk mail? Well here’s how to reduce a ton of it:
Call the number or click the link – either way will work. This will remain for five years at a time but if you return the signed Permanent Opt-Out Election Form to each credit bureau it will remain forever.
P.O. Box 919
Allen, TX 75013
Name Removal Option
P.O. Box 505
Woodlyn, PA 19094
P.O. Box 740123
Atlanta, GA 30374-0123
Innovis Consumer Assistance
P.O. Box 495
Pittsburgh, PA 15230-0495
File your tax return as soon as possible from here on out. With your credit frozen and a fraud alert in place your biggest risk of direct impact is going to come from a fraudulent tax return. Unfortunately, the powers that be at the IRS don’t confirm identity on tax filings except for a SSN. If somebody files with your SSN then you will not be able to file and will have to dispute it. This is a long, difficult and uphill battle. Hound your employers to get your W-2 ASAP.
If your identity is stolen and used this way, TurboTax keeps a webpage to make fighting this battle a little easier. The IRS will never contact you by phone or email to verify your identity. However, if you contact them they will be willing to verify over the phone. If you get a call from anyone claiming to be the IRS for this purpose hang up, look up the IRS number, and call them instead.
Is there any part of my identity that is secure?
Our birth certificates and passports are about all we’ve got left.
If you only have one copy of your birth certificate then look up your County of Birth’s rules on requesting a new one. This will probably cost about $20 as well. The birth certificate is one of the end-all-be-all points of our identity. Keep them in locked and fire proof boxes. Worst case scenario for you is having your identity stolen and then having a fire take these documents. Make sure both can’t happen at the same time.
If you are a Naturalized American then do the same as the Birth Certificate folks, but with your citizenship documents. A birth certificate from your country of birth certainly wouldn’t hurt either.
If you don’t have one already, look into getting a Passport. This will prevent one from being made in your name with your birth certificate in the future, may help you prove your identity if necessary, and you can travel to Europe, Canada, and Mexico without a visa.
Passports use various methods for confirming your identity but the linchpin is your birth certificate. You’ll have to send a 2″x2″ photo and a certified original copy of your birth certificate off the State Department to get your Passport. The photo can be done at a UPS Store or CVS or similar places and costs about $5. The Passport fee itself is closer to $100.
The State Department will send back your birth certificate when they are done with it but it’s advisable to have more than one original on hand. Photocopies are not good enough for either case.
You can freeze your child’s credit once they have an SSN! They probably don’t have an Equifax file unless you’ve had them apply for banks and credit cards already, but freezing it when they are young is not a bad idea.
Stay safe out there.