Letter to the Editor
CONSUMER FOCUS: Credit report and identity theft monitoring
Tuesday, March 29, 2016
Anyone who has a credit history or plans to establish one should have an interest in what appears on their credit report.
Your credit report includes information about your identity, detailed credit history, and other information about you, including court judgments. Your credit report can affect your ability to get a credit card or loan, how much interest you pay, your insurance rates, and can even impact where you can live and work.
Because so much rides on what is in your report, it's important to know about any negative information that might appear and whether it's correct. You may also be concerned about threats from data breaches and identity thefts, as a criminal could use your name and good reputation to obtain funds, new credit and loans, utilities, or even pretend to be you.
That's why some turn to credit or identity theft monitoring services. For a monthly or annual fee, these services may offer to help you track or monitor your financial account activity, history, and personal information. Many consumers who subscribe to these services may find it convenient that the services take responsibility for regularly monitoring credit or taking steps to address a data breach or identity theft.
However, monitoring service providers may charge $10-$30 per month for some services that are available for free or at a low cost, or may not provide the level of protection that they may imply or you expect. Before subscribing to a credit report or identity theft monitoring service, be sure you understand what you are paying for, as well as what you can already do for free or at a low cost.
* Credit Reports: Some services may advertise that their fees include providing a copy of your credit report at no additional cost. Keep in mind that federal law entitles you to receive one free credit report per year from each of the three major credit bureaus (Equifax, Experian and TransUnion). The only authorized site for these free annual reports is www.annualcreditreport.com. (Tip: You can get free year-round protection when you stagger and rotate your requests by seeking a report from one of the three bureaus every four months.)
* Fraud Alert: A fraud alert, which is available for free, requires a lender to take certain measures to verify your identity before opening credit in your name, and the alert may make it harder for identity thieves to open accounts in your name. A credit reporting bureau that receives a request for fraud alert must notify the other two bureaus. The alert lasts 90 days, but you can renew it.
* Security Freeze/Credit Freeze: A security freeze, also called a credit freeze, helps prevent others from opening new credit under your name, or making changes to your existing accounts. A credit freeze restricts access to your credit report. A credit freeze is free to identity theft victims, and otherwise costs $10 per credit report. It stays in place until the consumer requests to lift it. A temporary lift costs $12, and permanently removing the freeze costs $10 (the fees are waived for identity theft victims).
There are services that offer additional options, such as access to your credit score, credit activity notifications, identity theft response assistance, and credit record rebuilding support.
Services that offer you a free credit score in exchange for your credit card number generally enroll you in a monthly service that carries with it monthly charges.
One of the best ways to protect yourself from financial fraud on existing accounts is to review your financial account statements and periodically review your credit reports. One of the best ways to protect yourself from others opening new accounts under your name is through a security freeze.