Key takeaways following the Equifax data breach
In September 2017, Equifax proved to the world that they are as careless and reckless with your personal information as a baby holding a scalpel. The company revealed that the personal information of 145 million Americans had been compromised in late July – nearly two months earlier. While this isn’t the largest data breach in history, it is by far the most serious because of the nature of the information stolen by the hackers.
The credit files kept by Equifax contained extremely sensitive information, like names, addresses, dates of birth, Social Security numbers, driver’s license numbers and credit card numbers. If you applied for credit in the last 10 years, you can rest assured that your information was stolen. The hackers who stole your information will likely sell the credit files to the highest bidders. Your credit scores could plunge once the files are bought since there is enough information available for identity thieves to rack up debt in your name and even steal your tax return.
If Equifax’s careless handling of your information results in your identity being stolen, the credit reporting agencies will likely make it impossible for you to correct the information in their systems, just as they always have. That’s where BoostMyScore may be able to help you out. Even if you have some adverse information showing on your credit report, we can still add positive history to offset it and boost your credit scores.
Protecting your credit
The safest way to prevent identity thieves from opening credit cards in your name is to put a freeze or a lock on your credit. This is something you can do by contacting one of the credit bureaus. You will receive a PIN you can use to unlock your credit if you want to open a credit card or shop for a car loan. Note that you will have to pay a fee to freeze or lock your credit. Also, placing a freeze on your credit report(s) may stop our Authorized User credit cards from appearing, so be sure to remove the freeze while you are working with BoostMyScore.
A fraud alert is another option to consider. Credit issuers will be alerted that your information has been compromised and will take additional steps to verify your identity when you open a credit line. The downside of this approach is that you will have to renew the fraud alert every few months and not all creditors respect the alert and follow the proper procedures.
There are a few things you should do to monitor your credit, including requesting a free copy of your credit report from CreditKarma.com, keeping an eye on what is charged to your credit cards, and signing up for a credit monitoring service. Most homeowner insurance policies include
“Identity Theft Protection Coverage,” too.
The best way to protect your tax return is to file your taxes as early as possible. If you receive a notice saying that a return has already been filed with your Social Security number, you will have to file Form 14039, and the IRS will verify your identity before processing your return.
Boosting your credit score
Most of our clients at BoostMyScore are very diligent about reading through their credit report and setting up a strategy to boost their scores in advance of a large purchase, like a home, car, or small business. If you are not looking to rapidly boost your credit score and you simply want to improve your credit score over the long term, then you may want to:
- Change how you use your credit cards to maintain a credit utilization ratio that is always less than 30 percent.
- Increase the number of accounts. Having only a couple of credit accounts could hurt your score. The people who have the best credit scores have three credit card accounts for every one installment account, like a mortgage or car loan.
- Pay off credit cards with a small balance and keep one or two cards for your monthly expenses.
- Use auto-pay features and reminders to pay all your bills on time. Missing a credit card payment will hurt your credit score.
- Use budgeting and common sense to manage your credit use. Don’t charge more on your cards than you can afford to repay in full that month.
The recent Equifax data breach is worrisome but there are steps you can take to protect your identity and your credit score. You should order a free copy of your credit report and set up some additional safeguards to prevent identity thieves from opening credit lines in your name. Obtaining your credit report is also the perfect opportunity to identify strategies you could use to boost your credit score through credit piggybacking.