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Protect Your Credit After a Data Breach


In recent years, big companies have lost millions of consumer information in data breaches. Having your information stolen in a data breach makes you far more likely to become an identity theft victim. One in four people who received a data breach notification letter in 2012 because a victim of identity theft, according to Javelin Strategy and Research. A data breach puts your credit at big risk, but there are things you can do to minimize the risk of identity theft and clear it up faster if it does happen.

Read the Data Breach Notification

Depending on state law, companies who suffer a data breach may not have to send a notification letter to affected consumers. However, if you receive a letter, read it carefully to understand the type of information that was stolen and the company’s plans to correct the damages. The type of personal information compromised will impact how you move forward. For example, you need to take more serious action if your social security number is stolen versus your name and address being stolen.

The company may offer free services following the data breach. Specific instructions for activating your services, e.g. a discount code, will be detailed in the notification.

Monitor Your Credit

Many companies offer free credit monitoring to consumers who were affected by a data breach. However, these are limits to the free service. First, the free credit monitoring may only cover one major credit bureau. Signs of identity theft that appear on a different bureau’s credit report (there are three major credit bureaus) will go undetected. Second, you’ll only receive free credit monitoring for a certain number of months, e.g. 12. What if the identity theft happens in the 13th or 16th month after the data breach?

Despite the limits of complimentary post-data breach credit monitoring, it’s still a good idea to take advantage of the service. You may be able to monitor your other credit reports through other services, like CreditSesame.com or CreditKarma.com. Both are free and cover Experian and TransUnion credit reports, respectively. Some banks offer free credit monitoring. Check with yours to see if that’s an option.

Finally, you can sign up for credit monitoring through a service, e.g. all three credit bureaus have their own version. There are others like Identity Guard or Lifelock. Prices range from $10 to $40 per month. Some monitoring services will alert you only when information changes on your credit report and others give you access to a new credit report every month.

You can order your credit report free through AnnualCreditReport.com (once a year). In some states, you can get an additional free credit report. Or, you can order your credit reports for a discount. The drawback is that once a year might not be enough to catch identity thieves.

Change Your Passwords, if Necessary

The password to your account may have been discovered during the data breach. If this is the case, change your account password to prevent thieves from having access to your account. It’s a good idea anyway to change your passwords periodically throughout the year to reduce the risk of being hacked.

Call Your Credit Card Issuer

If your credit card information was stolen, contact your credit card issuer to close that account and get a new one. Once you let your card issuer know your account number was compromised, they can block future fraudulent charges.

Fortunately, you’re not held liable for unauthorized credit card charges made using your credit card number as long as your card is still in your possession. Still, rather than having to deal with fraudulent charges that result from a stolen credit card number, it’s easier to get a new, undiscovered credit card number from your credit card issuer.

If you spot unauthorized charges on your account, contact your credit card issuer to dispute them immediately.

Place a Fraud Alert on Your Credit Report

You can place a 90-day fraud alert on your credit report that lets businesses know to take extra steps to confirm your identity before granting credit. You're also entitled to a free credit report with a fraud alert. Note that the fraud alert may prevent you from doing instant credit applications.

Consider a Security Freeze

The most important thing - especially with social security numbers being stolen - is to watch your credit report continually - one or two times a year at least - to be sure no one is opening accounts in your name. If you see something suspicious on your credit reports, dispute it. Consider getting an extended fraud alert (lasts 7 years and requires a police report or identity theft affidavit) or security freeze (locks your credit report).

Dispute Fraud on Your Credit Report

If the worst happens and you discover fraudulent accounts on your credit report, work quickly to get them resolved. File an identity theft report with local law enforcement so you have documentation supporting your identity theft claim. Dispute the fraudulent accounts with the credit bureaus. Finally, contact the companies to have the accounts closed.

Continue monitoring your credit report and your financial accounts for fraud, even in the months and years to come. That’s a good habit to follow even if you haven’t been a data breach victim.

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