The Blue Blaze

Equifax Breach Blues? Before You Freeze Your Credit, Read This.

Posted by Frankie Corrado

identity theft, personal inforamtion breach, cyber security

Earlier this week, we posted a letter we shared with clients containing some insight into the Equifax data breach, including options for responding to this potential invasion of privacy and identity theft. We’re sharing that information again, below.

And if by some chance you haven’t heard, hackers stole the personal information of 143 million Americans.  That's about 50% of the US population. Equifax, one of the ‘big three’ credit reporting agencies is admitting:

  • The breach lasted from mid-May through July.
  • Names, Social Security numbers, birth dates, addresses, and in some cases, driver's license numbers were exposed to hackers.
  • The credit card numbers of 209,000 people were also stolen.

This is the latest in a series of high-profile hacking incidents where millions of people’s personal information has been compromised and they are now at increased risk for identity theft. Media channels are stuffed with stories about the breach, and many of them include suggestions about how to react.

But please...Don’t react. Respond with actions that make sense for you and your personal financial situation.

For instance, one solution we see being pushed pretty aggressively is putting a freeze on your credit. While this is certainly a way to protect yourself, we also think it is a potential overreaction. Rather than being your first option, make sure it is the right option. Here’s why:

  • There are costs (time and money) to freeze your credit. If you potentially need to open an account or line of credit, it will cost you to freeze and unfreeze each time. It’s usually $30 per person per agency. So, if you are married and thinking about going through the credit freeze option, it would cost you a total of $540 every time you wanted to take out a credit card, auto loan, or mortgage. ($30 fee/agency x 3 agencies x 2 people x 3 to initially lock, unlock, and re-lock once the credit is open). Don’t forget about the value of the time you’ll spend doing this.
  • Compare that with simply creating a proactive credit maintenance plan where you register for ongoing credit monitoring (Life Lock - paid; Credit Karma - free), as well as regularly (as in 1-3 times a year) checking your credit reports.
  • Let’s face it - with 143 million Americans with compromised data, you are not alone. While there is a lot of data out there, there are also a lot of fish in the sea. With this latest data hack, I foresee the marketplace unifying around the development of additional safeguards when opening lines of credit.
  • I spoke with a client the other day and he explained that he doesn’t expect to open a line of credit (mortgage, auto loan, etc), for at least 10 or 15 years. He is retired, has a mortgage already, and no plans to take out a new credit card. He was very worried about the threats of identity theft. Based on his situation, I told him - of course - freezing your credit makes a whole lot of sense.
  • But another client called with the same concern, only she is 53, and her kids will be attending college soon where she plans to co-sign credit cards, student loans, and rental applications. Additionally, she is considering buying a new home in the next 6-12 months and the family car has less than 2 years left. Instead of freezing her credit, we had her set up a credit monitoring plan. She signed up for Credit Karma’s free service and also set calendar reminders every 4 months to check her various credit reports. This is a free method that allows her the flexibility to still open credit quickly if needed, but also a plan to flag potential threats before issues arise.

There is certainly cause for concern whenever there’s a chance our personal information has been stolen. And, as we are all vulnerable, we should all have a plan and take action to protect ourselves.

However, just as with our personal financial plan, our personal information protection strategy and any remedies we employ after a security breach should include responses that make sense for us and our own, individual situations.

And all our decisions and actions should be based on knowledge and insight -- not fear.

Where you can find out more. 

Additionally, Equifax is offering a year of free credit monitoring and they have removed the stipulation that you lose the right to take part of any future class action lawsuit! Just be aware that after the first year, Equifax will begin charging for this service.

However, don't take your security for granted with this free credit monitoring. You must still remain vigilant and proactive when it comes to your online security.

We recommend:

  • Review your credit report annually at  There is no cost to do this. Additionally, you get one free report from each of the credit bureaus. In all, that is 4 free credit reports each year available to you.
  • Continue to read all of your account statements for charges to credit cards and bank accounts that you did not make.
  • Sign up for a free account at to help with ongoing credit monitoring.
  • Avoid sending personal information by email.
  • Use encryption where possible when storing information on cloud-based systems.
  • Be aware of phishing attacks and do not click on links that are emailed to you concerning your financial accounts. Always go to the website directly to check and update your information.
  • Check any SSNs of your children for identity theft, as well as your own. Minors are often overlooked, but not by hackers.

 Other options:

  • You may also post a, "Fraud Alert", on your files. This warns creditors that you may be a victim of identity theft and also makes routine credit transactions subject to higher scrutiny.
  • An extreme remedy for suspected identity theft is to place a credit freeze on your files. This makes it harder for someone to open an account in your name, but also makes that harder for you.This is a last resort if you feel particularly vulnerable or want to certain no one (including yourself) can open an account in your name.

There's also the possibility that breached information could be used to file a fraudulent tax return. The best way to avoid this is to file as early as possible. The IRS has a process to protect the victims of identity theft, but it makes every interaction with them cumbersome.  The process should not be invoked as a preventive measure.

Finally, most homeowner's insurance policies have identity theft coverage, so be sure to review the details with your agent if you have concerns.

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Photo credit: Pixabay

Topics: Credit, Identity Protection, Tips