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Large data breaches that expose consumers' sensitive personal information have become a routine part of life. So it pays to know your options.
In July, Capital One disclosed that a breach had affected approximately 100 million U.S. consumers and 6 million consumers in Canada. It promised free credit monitoring and identity protection services to the groups affected: those who applied for Capital One credit cards between 2005 and 2019, and existing credit card and secured card customers.
The news came just after a settlement of the massive 2017 Equifax data breach, which exposed the personal information of nearly 148 million U.S. consumers, more than half the adults in the U.S.
Whether your financial data has been compromised or you simply want to proactively guard your credit, you can take action. Follow these steps to safeguard your financial life:
1. For best protection, freeze your credit
A credit freeze makes it unlikely your stolen financial information can be used to open new accounts in your name. Most creditors check your credit history as part of the application process — with a freeze in place, they can't access your credit history and will decline to open a new account.
Freezing your credit doesn't affect your score. And when you want to open up a new credit line, you can simply unfreeze your credit temporarily.
Freezing and unfreezing your credit at each of the three credit bureaus — Equifax, Experian and TransUnion — is now free to all consumers.
2. Place a fraud alert if you can't freeze right now
If you don’t want to lock out creditors — perhaps you're in the middle of applying for a mortgage or car loan — you can instead add a fraud alert to your credit reports.
This type of alert flags potential creditors that they should verify your identity before issuing new credit in your name.
A fraud alert lasts for a year and is renewable. You need to contact only one of the three bureaus and ask for the alert; it will notify the others.
For best protection, remember to freeze your credit at all three bureaus once you're done with your applications.
3. Check all 3 credit reports
You’re entitled to at least one free credit report from each credit bureau every 12 months via AnnualCreditReport.com. If you've already accessed them within that time frame, you get another round of free reports once you've placed a fraud alert.
In addition, the Equifax breach settlement will provide all U.S. consumers six extra free credit reports a year for seven years, starting in 2020.
Check over your reports for signs of trouble, especially:
New accounts that you didn’t open.
Credit inquiries that don’t match when you applied for credit.
Balances that don’t match your statements.
In between your annual free reports, monitor your credit more frequently by taking advantage of a free credit report source.
4. Watch your credit card activity
Freezing can stop new accounts from being opened in your name — but it can't prevent fraudulent charges on an existing account. Protect yourself in these ways:
Stay on top of your credit card statements. Look for charges you don’t recognize and if something seems fishy, dig into it. There’s often a phone number listed along with the merchant name for each transaction.
Sign up for text or email alerts about credit transactions. Many credit card issuers let you set them for every charge, or ones above a certain dollar amount.
If you see a suspicious charge, call your issuer right away to dispute it. Most often, your liability is limited to only $50 and perhaps less.