One of the three major credit reporting bureaus – Equifax, at which, there has been a recent data breach, has generated a situation that is uncomfortable, for the more than 145 million American consumers, whose personal information have been revealed.
What should be done, to limit the damage, from the data breach, at Equifax, by means of debt consolidation companies?
Some Timid Initial Steps Are There to be Taken by Everyone
- Ascertain whether your information was exposed (likely, it was).
- All credit card and bank accounts, need to be monitored
- At annualcreditreport.com, a free credit report ought to be ordered, and any suspicious activity or so, must be checked.
However, the most proactive step, as prescribed by the debt help companies, is freezing your credit. That decision has great advantages – no one, including you, can access your credit report until you unfreeze (even known as “thaw”) the report using a pin number or phrase.
This alternative of debt relief plans even comes with great costs in terms of money and inconvenience. But prior to exploration of the pros and cons of that decision, let’s touch on the basics.
A Brief about Credit Freeze
Essentially, your credit report becomes inaccessible, without debt help USA, by means of a credit freeze. That has the implication of the lending institutions, needing that information – like the credit card companies, banks, credit unions, auto dealers – who can’t view the report prior to the decision about extending credit. There are exceptions to it. Have a look at your own records, it is but natural that along with the pre-existing creditors, debt collectors and assorted others. No impact will be held by the freeze on your credit score, but your information is protected, inclusive of your vital Social Security Number (SSN).
The Consequence: If your credit history can’t be viewed by new lenders and credit furnishers, not likely it is that they will approve a new credit line in your name. That would reduce any possible identity thieves. Observers of illegal activity agree that most criminals quickly seek other opportunities if roadblocks are put up in their way.
Benefits of a Credit Freeze
- Peace of Mind: Higher its intangibility is, the more huge it is. Rarely, anyone can open credit accounts in your name – Creditors will be desirous of seeing your credit report prior to approval of a new account, irrespective of whether it’s you or an identity thief. If it is known that you are safe will eliminate all your anxieties, problems and outlays that come due to your stolen identity.
- Ease: Just you need to make a phone call or a few clicks on the internet. You need to provide your name, address, date of birth, Social Security Number and other personal information.
- No Need of Updates: Until the freeze is lifted from you, it will remain. It can be lifted for a particular lender, then revert into effect on your guidelines.
- Business as Usual: Your current creditors – like the back lenders and credit card companies – still are going to access your credit report.
Demerits of a Credit Freeze
Let’s have a look at the following downsides in context to the advice debt management:
- Cost and Inconvenience: Perhaps the cost won’t break the bank, however, it requires, in general, a fee to impose the freeze and to lift it temporarily. Also, a few days might be taken for the freeze to lift, so it is necessary to plan ahead. It’s inconvenient not to have immediate access to credit report for legitimate reasons (like the potential employer). If a PIN/Password is lost or misplaced, that will add difficulties, especially if a new credit line is quickly needed.
- Might Have Unnecessity: As per the situation, there might not be the necessity of a credit freeze. Protection can simply be provided by some people in the course of self monitoring as well as changing passwords.
- Protection Isn’t All-Encompassing: Your present accounts are not bound to be protected. What happens if data thieves are already possessive of your personal information? Still, they could get into your accounts for credit cards and banks. And still they could make use of your Social Security Number for the purpose of landing a job or acquisition of prescription drugs. Hence, security is never guaranteed for everything. Still, you need to monitor your accounts, for imposter transactions.
Equifax says it will directly notify these newly identified U.S. consumers, and will be offering protection of identity-theft as well as credit file monitoring services at no cost to them.