If you’re concerned about identity theft, you’ll be glad to know it’s now free to freeze your credit files.

The change is part of a new law, passed in May, that rolls back some of the bank regulations put into place following the financial crisis, in 2010.

We’ll break it down for you.

What’s a credit freeze?

A credit file freeze prevents anyone from taking out new credit in your name. Credit bureaus had previously charged for the service in at least half of all states.

What’s a credit file?

A credit file contains all of the information about your loans and credit accounts, in addition to personal information about you, including your name, address, Social Security number, and employment information.

Each of the three credit reporting bureaus—Experian, Transunion, and Equifax—collects this information and provides it to lenders when they perform a credit check on you.

What’s a credit score?

The information in your credit file is turned into a credit score.

A credit score is a point-based record developed by a company called Fair, Isaac Co. It’s sometimes referred to as a FICO score. It uses credit history data compiled by the three credit bureaus. Your credit usage information is regularly transmitted to these agencies.

The score is determined by a range of factors, including your credit mix, repayment record, the amount you owe, and how often you apply for credit.

That information is then compiled into a score, which changes over time based on your credit habits.

A credit score can range from 300 to 850. The better your credit, the higher your score. Perfect credit is 850. Many banking and credit card apps will give you access to your credit score

How do I freeze my files?

You must contact each of the credit bureaus individually to place a freeze on your file.

You can do that online, at the websites listed below. After answering some security questions, each site will give you a PIN that you’ll need to unfreeze your file if you plan to apply for new credit.

TransUnion: transunion.com/credit-freeze

Experian: experian.com/freeze/center.html

Equifax: www.freeze.equifax.com/Freeze/jsp/SFF_PersonalIDInfo.jsp

You can also call each agency, or write a letter requesting a freeze.

Some experts also recommend freezing your credit at something called the National Consumer Telecom and Utilities Exchange, as criminals could also use your information to open a cellular account in your name.

National Consumer Telecom and Utilities Exchange: www.nctue.com/Consumers

Good to know: In addition to checking your credit score, you should check your credit file, or report, at least once a year for any mistakes, which could include evidence of fraudulent accounts opened in your name.

By law, you’re entitled to one free credit report annually from each of the three credit bureaus.  You can get all three at a centralized website set up by the credit bureaus, called annualcreditreport.com.

Additional information

You can set something called a fraud alert on your credit report. A fraud alert requires businesses and lenders to verify your identity before they open a credit account in your name. These alerts are free and last for one year. When you put an alert on your file with one credit bureau, it will notify the other two to do the same.

Why is online security a big deal?

The change comes as a result of a hack attack about a year ago.

In September 2017, cybercriminals stole the personal details of 148 million U.S. consumers from Equifax, one of the three credit reporting bureaus in the U.S. The information taken included Social Security numbers, home addresses, credit card numbers, driver’s license numbers, birth dates, and passport information.

The stolen information is typically bought and sold by criminals on the black market, and via something called the dark web.

It’s likely that your information has been stolen in at least one of these breaches. Consumers can check to see if they were affected in the Equifax breach by entering their information at this website.

Numerous other companies in recent years have also suffered big hack attacks resulting in the loss of important customer data. Two such attacks include Yahoo, where names and email addresses for 1.5 billion customers were stolen in 2016, and JPMorgan Chase which lost names and logins for about 80 million accounts in 2014.

In 2015, health insurance provider Anthem lost nearly 40 million records, also affecting 80 million customers.

What can criminals do with my information?

  • The Equifax break affected just about every U.S. consumer who has applied for credit and involves up to five pieces of personal information, which is enough for criminals to open accounts in your name.
  • In addition to credit card accounts, cybercriminals can apply for other loans in your name, including mortgages. Additionally, they can commit medical insurance fraud, or file for tax returns. With your personal information, it’s also possible for cybercriminals to commit non-financial crimes in your name.
  • Identity theft resulting in the opening of fraudulent accounts can affect your credit score.

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