How to Protect Your Credit From Identity Theft

Do one thing: If you haven’t already, consider freezing your credit at all three major credit reporting bureaus: Equifax, Experian, and TransUnion. You can find them through quick internet searches. 

How to Stop Identity Theft in its Tracks

It can start with something as small as a $4 charge for a coffee you didn’t buy. If that sale goes through without detection, the next fraudulent purchase could be for hundreds or even thousands of dollars, draining your checking account and causing untold hours of hassles as you work to rectify the situation.

Your Credit at Risk

If someone can steal and use your account information, then chances are, they can also create cracks in your credit score. Unfortunately, identity theft – when someone steals your personal financial information and uses it for monetary gain – can potentially damage your credit and take weeks or even months (and sometimes longer) to sort out. 

The good news is that there are proactive steps you can take to protect yourself – and your children – from potential fraud.

Freeze Your Credit 

Jeff Arber, CFP, founder and CEO of Triple Play Planning LLC, has been helping his clients for years with prudent steps to shore up their financial lives. He suggests that everyone freeze their credit and walks them through the steps on how to do so with all three major credit bureaus: Equifax, Experian, and TransUnion.

“At this point, I believe that all of our information is out there being bought and sold after it was hacked by someone who had our information on file,” Arber says. “The only way to fight back against being taken advantage of is to proactively play defense against theft.”

Freezing your credit only takes about half an hour, he says, but it can save lots of headaches later on: “I even insist that if they have children, that they freeze their child’s credit as well.” 

Unlocking Your Credit

And while freezing your credit can take a little time, unlocking your credit (only when you need to use it) is pretty straightforward. Arber suggests unlocking your credit only for a fixed period of time, say 24 hours if you know you will need to have it unlocked for something such as a credit check for a new personal loan, mortgage, or refinance. 

Last year, Arber says having his credit frozen saved his family from potential credit damage when criminals tried to open a credit card in his wife’s name: “Since our credit was frozen, the bank could not run our credit, and subsequently denied issuing the card. If our credit was not frozen, we might not have known what was going on until some financial damage was done.”

Check Your Credit Reports

Another way to make sure no one is trying to take out new credit in your name, or already has, is to pull your credit reports at least a few times a year. Since the pandemic, the three major U.S. credit scoring bureaus each allow you a free copy of your report every week. If your financial institution is a SavvyMoney partner, you also have 24/7 online access to your reports and VantageScore credit score. 

Set Up Online Credit Purchase Alerts

Another step that’s vital to help protect your credit from identity theft is enabling online credit card purchase alerts. This, too, is fairly simple to set up with your credit card issuer, Arber says, and can even be accomplished online.

• How credit alerts work. Anytime you use a credit card for a purchase – and the physical card is not presented, such as when you buy something online – you receive an email (or text) notifying you of the purchase. Depending on your account, you can also set up a text alert to be sent after every transaction you make. 

“This particular strategy has also saved us in the past,” Arber explains, “as you can find out rather quickly whether or not someone has fraudulently made a purchase just by having your credit card information.” 

Don’t Forget the Kids

Parents and legal guardians can freeze credit for children younger than 16. Why would you do that? Research shows that nearly a million children are victims of identity theft each year in the U.S., and if a young child’s Social Security number is stolen or compromised, the fraud can go unnoticed for years.

With reporting by Casandra Andrews