Two Ways of Responding to the Recent Credit Reporting Agency Breach

Many people will by now have heard about the cyber-attack recently suffered by one of the nation’s three major credit reporting agencies. With the databases maintained by Equifax having exposed the personal information of about 140 million Americans as a result, interest in ways of reducing the ensuing risk has been rising rapidly.

There are two basic tools that consumers can use to make identify theft as a result of the breach less likely. Understanding the purpose and nature of each can make it much easier to choose the best way to proceed.

Freezing a Credit File and Locking Lenders Out

The most commonly reported and recommended response is known as a credit freeze. Each of the three credit reporting agencies allows consumers to request that their files be locked and the information within kept from anyone who might request it.

This can be an effective way of stopping would-be identity thieves in their tracks. Imposing a freeze on a credit file might require that a fee be paid, depending upon a consumer’s state of residence, and does come with some other downsides, as well.

For one, freezing a credit report will mean that even lenders with whom the corresponding person wishes to work will not, by default, be able to access the information. In order to allow for this, the report must first be unfrozen, a process that can take some time and also cost even more money.

Another issue that some have confronted is that the personal identification numbers issued to enable the “thawing” of credit reports can themselves be vulnerable to attack. A thief who was able to discover that PIN might be able to circumvent the protection that freezing affords.

Requesting Fraud Alerts

A somewhat less invasive option is having a fraud alert placed on a credit report. This measure is entirely free of charge and its availability guaranteed by the federal government.

A single fraud alert placed with one credit reporting agency will also be propagated to the others, reducing the amount of work that consumers need to do. Placing an initial fraud alert will ensure that for the next ninety days, lenders will be advised to contact the consumer in question directly before offering any form of financing.