In the age of paperless transactions, identify theft is something that virtually all of us are susceptible to. If your identity is stolen, the consequences can be severe, and in some cases, can take years to recover from. One way to be proactive against fraud and defend yourself from identity theft, is to freeze your credit report with each of the three major credit bureausâExperian, TransUnion, and Equifax.Â
Placing a credit freeze on your credit report will stop identity thieves from being able to open new accounts, lines of credit, or make any large purchases in your name, regardless of whether or not they have your Social Security number or any other sensitive information.Â
What a credit freeze means
A credit freeze is a process that shuts off access to your credit reports at your request. Without your verified consent, your delicate information cannot be acquired. This means that if someone were to attempt to apply for credit in your name, your report would come up as âfrozen,â and therefore the creditor would not be able to see the information needed for the application to be approved.
You can unfreeze your credit at any time by using a PIN or a password.Â
Reasons to freeze your credit
It might be a good idea to freeze your credit if youâre experiencing any of the following situations:
Your data has been compromised in a data breach: It happens. If youâve been a victim of a data breach and personal information related to your identity has been leaked or made vulnerable to cyber criminals, a credit freeze can offer you some extra protection.Â
You have reason to think youâve been a victim of identity theft: Perhaps youâve checked your credit recently and noticed open accounts that you donât recognize. Maybe youâve been getting phone calls from collections agencies requesting payments from accounts you know you didnât open. While a credit freeze wonât be able to stop them from using accounts a thief has already opened, it can stop them from opening any more.Â
You want to protect your child from identity theft: According to the Economic Growth, Regulatory Relief and Consumer Protection Act, parents and legally guardians of children 16 years old and younger have the right to open a credit account for their child with the sole purpose of putting a freeze on it to protect them from identity theft.Â
How to freeze your creditÂ
The process of freezing your credit is simple but does require a few steps. You will need to get in touch with each of the three major credit bureaus one by one and request a credit freeze:
Experian: Contact by phone at 800-349-9960 or go to their website.
Equifax: Contact by phone at 888-397-3742 or go to their website.
TransUnion: Contact by phone at 888-909-8872 or go to their website. Â
The credit bureaus will ask you for your Social Security number, your date of birth and other information to verify your identity.
Once you freeze your credit, your file will be unattainable even if a thief has sensitive information such as your social security number or date of birth. If you need to use your credit file, you can unfreeze your credit report at any time.Â
How to unfreeze your credit
Once youâve frozen your credit file, it will be remain blocked until you decide that you would like to unfreeze it. You will need to unfreeze your credit report in order to open a new line of credit or make a major purchase.Â
Unfreezing your credit file is simple. All you will need to do is go online to each credit bureau website and use the personal identification number (PIN) that you used to place the freeze on the account. If you donât want to complete this task online, you can also unfreeze your credit file over the phone or through postal mail.Â
When the unfreezing process is done online or by phone, it is completed within minutes of submitting the request. However, if you send your request via mail, it will take much longer.Â
Keep in mind that you donât necessarily need to unfreeze your credit through all three of the major credit bureaus if you donât want to. For instance, letâs say you plan to apply for credit somewhere. You can ask the creditor which credit bureau it will go through to pull up your report, and only unfreeze that one credit bureau.Â
You may also have the option to unfreeze for a specific amount of time. Once the time is up, your credit file will automatically freeze again.Â
Credit freeze pros and cons
There are a few reasons why you might want to freeze your credit in this day and age, but just like with anything else, there are pros and cons to credit freezing. Here is a general breakdown of the benefits and downfalls of putting a freeze on your credit report:
Pros:
It prevents thieves from opening new lines of credit: With a credit freeze placed on your account, no one will be able to open a new line of credit or any other type of account requiring a credit check using your personal data. Anyone trying to commit fraud will be stopped in their tracks as soon as lenders notice that the report is frozen.Â
It wonât affect your credit score: Freezing your credit report will not damage your credit score. Additionally, if youâve been a victim of identity theft, freezing your credit report could actually protect your credit score from being damaged due to fraud.Â
Itâs free: It used to be the case that some credit freezes would cost a fee, but that is no longer the way it works.Â
Cons
It requires some effort: Putting a credit freeze on your credit report takes some effort. You will need to get in touch with all three credit bureaus.Â
You will need to remember your PINs: A PIN is required to lift or freeze your credit report. If you lose it, you will need to jump through extra hoops to create a new one.
It canât stop thieves from accessing your existing accounts: Credit freezes can only stopfraudstersfrom opening new accounts using your information.If youâve already been a victim of identity theft, a credit freeze canât block thieves from committing fraud with your current accounts. This means that thieves can still make a purchase using a credit card they stole from you.
Freezing Your Credit is a post from Pocket Your Dollars.
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The COVID-19 coronavirus pandemic has affected everyone all around the world. Extended isolation and sudden job losses have everyone thinking about their futures. Lots of people are concerned about losing a reliable income source during this time of crisis. Some have even been forced to shut their businesses. The global pandemic has turned many people’s financial lives upside down.
As you work on keeping your bills in good standing and your finances going strong, you should also pay attention to your credit score. Even if you’re delaying some major purchases like buying a car or a home or going on a trip, you still need to maintain good credit. You’ll eventually start spending again, and you’ll need a good credit score.
But how can you protect your credit score during COVID-19? Keep in mind that your credit scores and reports play a crucial role in your future financial opportunities. The following steps will be your handy guide in managing and protecting your credit score during this global pandemic.
Stay on Top of Your Credit
Reports
Even on good days, make sure you regularly review your credit reports from the three credit bureaus. You can get free annual credit reports at AnnualCreditReport.com. Through April 2021, Experian, Equifax, and TransUnion are allowing consumers to access their credit reports for free weekly. Take advantage of this offer to make sure that any accommodations you request from lenders are appropriately reported and that your identity is safe and secure.
You can also sign up for the free Credit Report Card from Credit.com. With our report card, youâll see your VantageScore 3.0 from Experian, as well as personalized information on what is affecting your credit score and how you can improve. If you want to dive deeper, sign up for ExtraCredit to see 28 of your FICO scores from all three credit bureaus.
Get ExtraCredit
Keep Up with Your Payments
Late payments can affect your credit history and credit reports for up to seven years. Prioritize paying your bills on time when you can, even during financially difficult times. You can do this by setting up reminders to alert you of payment deadlines. Also, you should make it a habit to make at least the minimum payment each month. Doing so will help you in keeping a good payment history record and prevents you from paying late fees.
Contact your lender whenever you can’t
make payments on time. Lots of lenders have announced proactive measures to aid
their borrowers affected by the global pandemic. Some are willing to provide
loan extensions, interest rates reduction, forbearance, or repayment
flexibilities. The best thing to do is to get in touch with your lender and
explain your current situation. Don’t forget to ask for written confirmation if
any agreements were made.
Be Aware of Your Protections
The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) has protections to help your credit score remain unaffected during the pandemic. This Act puts special requirements on some agencies and companies reporting your payment information to the credit reporting companies. The requirements are applicable if you’re affected by the COVID-19 pandemic and specifically covered by the Act.
If you request an accommodation under the CARES Act, your creditors will report your account to the credit reporting agencies based on the current standing of your credit when the agreement is made. The requirements set by the CARES Act are only applicable to agreements made between 31st of January 2020 and 120 days after the COVID-19 national emergency officially ends.
Get to Know What Impacts Your
Score
If you’re currently unemployed and wondering if it will affect your credit score, the answer is no. Unemployment itself will not impact your score. Making late payments and missing payments are the things that most significantly affect your credit score. This is why we recommend getting in touch with your lender as soon as you suspect you may not be able to make a payment in full on time. Inform them of your current situation. This can also help you cope with your anxiety.
Hard inquiries, account mix, and credit age also impact your credit score, but to a lesser degree. Your major concern should be keeping your credit utilization low and paying bills on time.
Keep Yourself and Your
identity Protected
Securing your personal information and identity is also crucial in protecting your credit score. Identity theft and scams are rampant during this coronavirus pandemic. Your personal information can unlock different financial resources. Hackers and cybercriminals can utilize all your personal information to impersonate you and open credit card accounts, make purchases, transfer funds, and borrow money. If left undetected, this activity can significantly damage your credit score.
Though the damage is reversible, the entire process will be costly. That’s precisely why prevention is always the best option. ExtraCredit from Credit.com, for example, offers $1 million in identity theft protection and dark web monitoring, among other features.
Make Budgeting and Planning a Habit
During this crisis, budgeting is essential for keeping your credit card debt low and your credit score high. Pay attention to how much money you make and the amount of money you spend. Identify expenses where you can cut the usual costs, at least temporarily.
Reworking your budget is necessary, especially if you’re currently unemployed or earning less money. You can consider the following money-saving ideas to maximize your savings:
Put nonessential purchases such as online shopping and clothes on hold
Temporarily suspend nonessential services such as cleaning and lawn care
Cancel subscriptions on cable, music streaming, video streaming, etc.
Search for affordable meal planning solutions
Cancel fitness and gym memberships
Cut back child-related extracurriculars such as tutoring, lessons, and sports
Spend less on takeout
Although reducing costs is not fun, the
result will reduce your financial stress and will allow you to better protect
your credit.
You Can Protect Your Credit Score from COVID-19
All the things mentioned above have one thing in common: All require taking a proactive approach to your finances and credit. Follow the six credit-protection strategies mentioned above to maintain and protect your good credit even if you are facing a financial crisis.
About the Author
Lidia S. Hovhan is a part of Content and Marketing team at OmnicoreAgency. She contributes articles about how to integrate digital marketing strategy with traditional marketing to help business owners to meet their online goals. You can find really professional insights in her writings.
The post How to Protect Your Credit Score During COVID-19 appeared first on Credit.com.
Being a victim of tax related identity theft can leave you scrambling to take the proper steps to set things right. Here’s are the things you need to do.
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In response to the coronavirus pandemic, major credit card issuers are offering relief to their customers.
Even though many places around the country are open, the pandemic continues to impact the U.S. economy. Workers are still at risk of being laid off or facing reduced hours or pay.
“This is a rapidly evolving situation and we want our customers to know we are here to provide assistance should they need it,â Anand Selva, chief executive officer of Citiâs consumer bank, said in a statement in Spring 2020.
At the same time, scammers are now trying to take advantage of coronavirus concerns by sending out fake emails about the virus that are designed to steal consumersâ personal and financial information or to infect their computers with malware.
Financial strategies if you’re self-employed
How to manage your credit cards during the coronavirus outbreak
Coronavirus: What to do if youâre unemployed and have credit card debt
What to do if youâre struggling to pay your credit card bills
Many credit card issuers are allowing customers to opt into financial relief programs online. These programs are a convenient way to access short-term relief. But it could come with a long-term cost as many cardholders will continue to see interest accrue. With the average credit card interest rate sitting at 16.05%, cardholders might find more cost-effective relief through other options.
Here’s what issuers are currently offering:
American Express
Cardholders who are having difficulties can get assistance through American Express’s financial hardship program. Eligible cardholders have the option to enroll in a short-term payment plan, which provides relief for 12 months, or a long-term plan, which can provide relief for either 36 or 60 months.
Under both options, you will receive lower interest rates, plus waived late payment fees and annual fees. But you might not have access to certain card benefits and features.
If you enroll in the short-term plan, you might be able to continue putting new purchases on the card but with a reduced spending limit. If you are participating in the long-term plan, you will not be able to use the card.
Amex will report participating cardholders to the credit bureaus as current, assuming they comply with the program’s rules. But the program’s terms do offer some important caveats: Amex will inform the credit bureaus that you are enrolled in a payment assistance program (if you’re in the long-term plan). And under both plans, Amex will report that you have a lower credit limit.
While these factors do not have as much of an impact on your credit score as a delinquent account does, it could still signal to other lenders that you might be having some financial hardship.
Bank of America
Bank of America cardholders who have trouble paying credit card bills can request a credit card payment deferral by calling the number on the back of their card.
To qualify for payment assistance, cardholders must be carrying a balance, according to the website.
Bank of America sent an email to Preferred Rewards members in May 2020 stating that the company had temporarily suspended the annual program review process. Members whose assets dropped below the regular threshold to keep their status would continue to qualify for program benefits. It is unclear if Bank of America is still suspending this program.
Barclays
Barclays urges credit card account holders to request payment relief online. As of May 4, 2020, the bank is granting payment relief for two statements, but interest will continue to accrue.
Capital One
âWe understand that this is a time of uncertainty for many people, and we know that there may be instances where customers find themselves facing financial difficulties. Capital One is here to help and we encourage customers who may be impacted to reach out to discuss how we might be of assistance,â the bank said in a statement.
In a March 26, 2020 update, Chairman and CEO Rich Fairbank confirmed that they are offering waived fees and deferred payments on credit cards for some cardholders.
Because each customerâs situation is different, the bank encourages customers to contact it directly. To contact Capital One customer service about an existing account, call (800) 227-4825.
See related: How to clean your credit card
Chase
Previously, Chase Bank stated that customers will be able to “delay up to three payments on your personal or business credit card” if needed, with interest continuing to accrue. The website currently does not specify how many payments cardholders can defer.
It also stated that active duty military members who are responding to a disaster might have access to additional benefits. Servicemembers can call the bank for more information.
In a letter to shareholders, the company’s CEO, Jamie Dimon, also promised to not report late payments to the credit bureaus for “up-to-date clients.”
See related: Chase offering limited-time bonus on food delivery for some cardholders
Citi
Citi customers who have been impacted by the coronavirus pandemic might be eligible for assistance. Previously, the bank was waiving payments and late fees for two consecutive billing cycles. However, Citi has ended its pandemic assistance program.
“Due to a significant and steady decline in enrollments, our formal COVID-19 assistance program has concluded and we will focus on providing assistance options to those customers financially affected by COVID-19 on a case-by-case basis. We continue to closely monitor the situation and will evaluate additional actions to support our customers and communities as needs arise,” a spokesperson for Citi said in an email.
During the bank’s pandemic assistance program, interest continued to accrue, but accounts that were current at the time of enrollment were not be reported as delinquent.
Discover
Discover will be extending relief to qualified customers who are experiencing financial difficulty caused by the spread of COVID-19.
“We encourage them to contact us by calling and are directing them to www.discover.com/coronavirus for phone numbers for each product line and other FAQs,” Discover said in a statement earlier this year. “We also can provide relief through our mobile text app, which connects a customer directly with an agent.”
Discover it Miles cardmembers can also put their miles towards their bill â including their minimum payment.
See related: What to do if you can’t pay your business credit card bill
Goldman Sachs
Apple Card customers can enroll in an assistance program. Previously, cardholders could waive payments without accruing any interest. The website currently doesn’t specify if this is still the case.
Key Bank
Cardholders can defer payments for three billing cycles. Though interest will continue to accrue, enrolled cardholders will not receive late fees, and their accounts will be reported as current, as long as accounts were not delinquent at the time of enrollment.
Synchrony
Synchrony is extending relief to customers experiencing financial hardship. The company’s website previously stated that this could include payment relief for up to three statement cycles, while interest would continue to accrue. The website currently offers no specifics about what the issuer is prepared to offer.
Truist (formerly SunTrust and BB&T)
Previously, Truist offered payment relief assistance to customers with personal and business credit cards, among other products. As of April 14, it was willing to delay payments for up to 90 days. The website currently offers no specifics about what the issuer is prepared to offer.
Wells Fargo
Previously, impacted cardholders could defer monthly payments for two consecutive billing cycles. The company’s website currently does not specify what assistance cardholders can expect to receive.
See related: Coronavirus stimulus legislation doesnât suspend negative credit reporting
ultimate guide to coronavirus limited-time promotions for more offers designed to help cardholders maximize rewards amid the coronavirus pandemic.
Business credit cards
If you are a small-business owner and cash is not flowing and bills are piling up, the most important thing to do is contact your card issuer.
Some banks are also providing assistance in case you can’t pay your business credit card bill.
Another coronavirus complication: Scams
As consumers wrestle with the impact of the coronavirus, scammers are trying to take advantage of the situation.
In a June 2020 public service announcement, the FBI warned that the increasing use of banking apps could open doors to exploitation.
“With city, state and local governments urging or mandating social distancing, Americans have become more willing to use mobile banking as an alternative to physically visiting branch locations. The FBI expects cyber actors to attempt to exploit new mobile banking customers using a variety of techniques, including app-based banking trojans and fake banking apps,” the PSA warns.
Scammers might also be capitalizing on health and economic uncertainties during this time. In one such scam, cybercriminals are sending emails claiming to contain updates about the coronavirus. But if a consumer clicks on the links, they are redirected to a website that steals their personal information, according to the Identity Theft Resource Center (ITRC).
Identity theft in 2020: What you need to know about common techniques
Bottom line
The outbreak of a disease can upset daily life in many ways, and the ripple effects go beyond our physical health. Thankfully, many card issuers are offering relief. If you’re feeling financially vulnerable, contact your credit card issuer and find out what assistance is available. And while data security may seem like a secondary consideration, it’s still important to be vigilant when conducting business or seeking information about the coronavirus online.
Hackers steal more than 1 million records globally every hour. And improvements in technology make it easierânot harderâall the time for cyber thieves to access your personal and financial information. While identity theft is a scary thought, you arenât helpless.
ExtraCredit provides tools to help you not feel helpless. Sign up for dark web monitoring and $1 million identity theft insurance for proactive alerts and support if the worst happens.
The three major credit bureausâExperian, Equifax and Transunionâoffer three ways to help you protect yourself from someone opening an account in your nameâa fraud alert, credit freeze and a credit lock. Though they sound the same, each one provides a different level of protection and impact and each has different requirements.
What Are Fraud Alerts?
A fraud alert is a basic form of credit protection. It acts as a roadblock that makes it harder for thieves to open an account in your name. If you have a fraud alert in place, a lender or other business isnât supposed to open an account for you without first taking steps to verify that the account is, in fact, for you and not someone pretending to be you.
Unlike with a credit freeze, your credit file is still accessible to business and lenders. Thereâs just an added step that must be taken before the lender or another business opens an account in your name.
Because you provide your contact information when you set up the alert, inquiring banks often use your telephone number to contact you if someone, including you, is trying to open a new account in your name. This gives you the opportunity to confirm or deny that you applied for the account.
Three Types of Fraud Alerts
There are three different types of fraud alerts that you can add to your credit reports at the three credit bureaus.
An initial fraud alert can be added by anyone at any time and for any reason. You can add it at any one of the three reporting agencies. The bureau you request an alert from has to let the other bureaus know about The other two then have to add an initial fraud alert to your report as well. An initial alert automatically expires after a year.
An extended fraud alert requires that you verify that youâre a victim of identity theft or fraud. Verification involves sending an identity theft report with a copy of a police or other law enforcement report. Requesting an extended alert, as with an initial fraud alert, can be done at one of the reporting agencies who then has to alert the other two bureaus on your behalf. An extended fraud alert stays on your report for seven years.
An active-duty alert or active-duty fraud alert is used for active military service members. Like an initial fraud alert, it lasts for one year but can be extended if the service member remains deployed. Like the other alerts, opening an active-duty at one bureau requires that reporting agency share it with the other two.
What Is a Credit Freeze and Credit Lock?
While a fraud alert instructs businesses to take steps to verify your identity before opening a new account, it doesnât keep them from looking at your credit file. A credit lock or credit freeze, also called a security freeze, does prevent anyone from looking atâor making a hard inquiry onâyour credit report.
A lock or freeze prevents a business or lender from even considering you for a loan or account, where an alert lets them see your credit report. With an alert, they can get to the point of wanting to extend you the loan or account, but not actually opening it without first verifying youâre the one who wants the loan or account.
With a freeze or lock in place, the lender can still make a soft inquiry against your credit report. So you can still get pre-approved credit card offers or have a prospective employer check your credit.
Initial fraud alerts and credit freezes are covered by government laws, specifically the Economic Growth, Regulatory Relief, and Consumer Protection Act, which requires they be free for one year.
Credit locks are not necessarily free or covered by laws. They are credit industry products.
Locks and freezes last until you lift them. Ending a freeze requires a PIN you receive when you place the freeze. Ending a lock can be done simply by asking the company who placed the lock usually online or by phone.
When to Place a Fraud Alert
Requesting a credit card fraud alert is easy and wonât hurt your credit score or affect your reports. Itâs okay to request one at any time. Because an alert only lasts a year, you may want to reserve requesting one for when you think you might be in jeopardy, such as:
You notice fraudulent activity on any of your accounts.
You think you are a victim of fraud.
Your information may be at risk in a data breach.
Your wallet, credit card, Social Security card, etc. was lost or stolen.
You want to take extra precautions against identity theft.
When in doubt, a fraud alert gives you some reassurance. If youâre planning to take out a loan or apply for a credit card soon, an alert gives you some protection without restricting your ability to apply for financing.
If you have a credit freeze or lock in place and you apply for a loan or credit card, youâll have to at least temporarily lift the freeze or lock and take extra steps. Those steps arenât cumbersome but will take a small amount of time. If you choose a lock or freeze, simply know that youâll have to do some workâmore than answering a phone callâif you need a new loan or credit card and have one in place.
How to Apply for a Fraud Alert
Experian lets you submit a fraud alert request online. You can enter either your personal information or identifiers from a recent credit report. If youâd prefer not to input your Social Security number, you have the option to upload other documents to verify your identity.
TransUnion lets you request a fraud alert online through TransUnion by creating an account and completing the online form.
Equifax lets you create an account and file for a fraud alert online. With Equifax, you can also mail in an application or set up an alert by phone at 800-525-6285.
What Else Can You Do to Protect Yourself?
A fraud alert, credit freeze or credit lock are just some of the tools you can use to protect yourself from identity theft. Another tool you can use is your credit score. Using a service, such as Credit.com, to monitor your credit score can alert you to any changes in your score which can indicate somethingâor someoneâhas abused your credit.
You can sign up for a free Experian VantageScore credit score or a $1 FICO credit score from Credit.com. Your score includes access to a free credit report cardâshown belowâthat tracks the five key areas that go into your scoreâpayment history, debt usage, credit history, account mix and inquiries. Â Your score and your report card are updated every two weeks, so you can see any changes and take action if needed, including adding a fraud alert, freeze or lock when needed.
The post How Is a Fraud Alert Different from a Credit Freeze or Lock? appeared first on Credit.com.
