2019 Protecting your Credit

Aug 2019


We live in a world where we are bombarded with so much news and information that it becomes overwhelming. Just think over the last week, we’ve had news of another major breach, this time affecting Capital One, President Trump putting new tariffs on China, a potential trade war breaking out between Japan and South Korea, ongoing issues regarding Brexit, the new jobs report, and also let’s not forget the Federal Reserve for the first time in more than a decade lowering interest rates. I can go on and on with other stories that hit over the last week, but I think you get the point. This is the world that we live in and we have to adjust. My view is that you cannot react to every story, because you would end up being like the hamster running the wheel in the fact that you would be moving at a fast pace, but in the end you’d be in the same place. At the same time, if you ignore everything it could be at your peril. As far as I’m concerned, the issues that you should focus on are the ones that directly affect your situation.

Of all the stories that have come out over the last week or so, whether it be lower interest rates or new tariffs on China, the one story that you should pay attention to is the Capital One hack. Even if you don’t have a Capital One account and never dealt with them, this is the story that you should focus on. It’s not that the other stories aren’t important, but I don’t think it’s important that you react to them. I believe the Capital One story is important because data and security breaches put you at risk, and when you consider that over 100 million Americans were affected by the Capital One breach, it’s a reminder of the vastness of this problem. Even though there is not one thing that you can do that will 100 percent guarantee you that you will not be hacked, there are things you can do to better protect yourself. One of the things you may wish to consider is to put a freeze on your credit report.

When you put a freeze on your credit report, it basically prevents others from accessing it. Typically, when you apply for credit your lender is going to review your credit report to determine if you’re credit worthy or not. When you put a freeze on your credit report it prevents the identity thieves and crooks from opening a new account in your name. People that have been subject to identity theft find that the crooks take out loans or open charge cards in their name. Having your credit reports frozen prevents this. Therefore, it’s something that I recommend more and more people do. It is important to keep in mind that when you freeze your credit report, it does not have any impact on your credit score, and you can always unfreeze your account if you apply for credit.

To freeze your credit report is relatively simple; all you need to do is to go to each individual credit bureau and click on their security freeze page. In that regard, it is important that you type in the website into your browser as opposed to linking from an email. The three websites are equifax.com, experian.com and transunion.com. The reason I mentioned that you shouldn’t directly link from an email is because that is one of the ways the scammers get your information. One thing they do is put up fake websites and pop-up ads that look real, and they use that to capture all your information. In fact, the Federal Trade Commission just issued a warning about this.

As you may have heard, Equifax reached a settlement with the government regarding their security breaches. As part of that settlement you can go on their website, and if you’re affected, apply for a cash settlement or free credit monitoring. Unfortunately, the crooks are already trying to take advantage of this. As the Federal Trade Commission pointed out, there have already been fake websites claiming to be the Equifax Settlement Claim website, and also bogus pop-up ads. That is why to protect yourself, you must always type the address into the web browser yourself.

I remember in the good ole days all you had to do to protect yourself was to tear up your carbons from your charge cards; unfortunately, that is no longer the case. The identity thieves have taken advantage of technology to our detriment. This is the world we live in, and we cannot put our head in the sand and do nothing. In addition to putting alerts on your accounts, review all statements, and be very judicious about whom you give your sensitive and personal information to. Freezing your credit is something that I believe will protect you and give you some peace of mind.

Good luck!


Rick is a fee-only financial advisor.


If you would like Rick to respond to your questions, please email Rick at bloomassetmanagement.com.