Identity theft and fraud are growing concerns. In 2020, the Federal Trade Commission received nearly 1.4 million reports of identity theft—double the figure for 2019—and received a staggering 2.2 million reports of fraud. 1
With this type of crime on the rise, it’s understandable if you’re concerned about your hard-earned credit. In this article, we’ll go over seven ways to protect your credit from fraudsters and identity thieves.
Table of Contents
1. Review your financial accounts regularly
Make sure you’re reviewing all of your financial statements on a regular basis and checking them for suspicious activity. You should regularly review your:
- Bank statements
- Credit card statements
- Credit reports
You can view your bank and credit card statements by logging into your financial institution’s online portal. Accessing your credit report is also relatively simple, but it requires visiting a different website.
How to review your credit report
Visit AnnualCreditReport.com to request free digital copies of your credit reports from each of the major credit bureaus (Equifax, Experian, and TransUnion). Check each report for errors and signs of suspicious activity, such as:
- Credit accounts you didn’t open
- Account activity (e.g., large balances on your credit cards) that you don’t recognize
- Unexpected changes in your personal information, such as your address
If you see any suspicious activity, immediately notify your creditors and the credit bureaus that you think you’ve been the victim of identity theft. To protect your credit score, you should also dispute the inaccuracies on your credit report by using a free credit dispute letter template.
2. Sign up for a credit monitoring service
All three credit bureaus offer credit monitoring services that notify you when any new or unusual credit activity occurs, such as transactions being made and accounts being opened in your name.
You can sign up for credit monitoring from:
These services provide you with constant updates. The costs vary according to the service you choose.
Note that you can also monitor your credit yourself by frequently reviewing your credit reports, but that’s more time-consuming than paying for a monitoring service. Also, requesting your reports more often than once per year costs money.
3. Freeze your credit
A credit freeze, also known as a security freeze, restricts prospective lenders from viewing your credit report to conduct a credit check. This keeps people from opening accounts in your name.
You should request a credit freeze immediately if you’ve been a victim of identity theft or you have reason to believe your personal information has been compromised.
Freezing your credit is always free, as per federal law. 2 It requires you to contact each credit bureau separately. The fastest way is to call them or contact them online, which you can do using the contact details listed in the table below.
Once the bureau receives your request, they’re required to freeze your credit within 24 hours. 3
Where to submit your credit freeze request
| Experian | Equifax | TransUnion | |
|---|---|---|---|
| Online | Fill out the credit freeze form on Experian’s website | Fill out the credit freeze form on Equifax’s website | Fill out the credit freeze form on TransUnion’s website |
| By phone | 1-(888) 397‑3742 | Automated line: 1-(800) 349-9960 Customer service line: 1-(888) 298-0045 | 1-(888) 909-8872 |
| By mail | Mail your request with the necessary documents to the following address: Experian Security Freeze P.O. Box 9554, Allen, TX 75013 | Print Equifax’s credit freeze form and submit it along with other documents to the following address: Equifax Information Services LLC P.O. Box 105788, Atlanta, GA, 30348-5788 | Mail your request with the necessary documents to the following address: TransUnion P.O. Box 160, Woodlyn, PA 19094 |
Should I get a credit lock or a credit freeze?
A credit lock is another preventative measure against identity theft and unwanted credit activity. Like credit freezes, credit locks put your credit on hold by preventing lenders from viewing your credit report.
There are two main differences between credit locks and credit freezes:
- Cost: Freezing your credit is always free, whereas locking your credit sometimes costs money.
- Speed: Credit locking is instantaneous, whereas freezing your credit can take up to 24 hours.
In most circumstances, getting a free credit freeze is enough, but if you want the convenience of being able to lock and unlock your credit frequently, it might be worth paying for a credit locking service.
4. Place a fraud alert on your credit report
A fraud alert appears on your credit report and warns prospective creditors that you’ve been a victim of identity theft. This lets them know to contact you before opening an account in your name to get additional verification of your identity.
Unlike credit locks and freezes, fraud alerts don’t actually prevent lenders from accessing your report. This is both good and bad—it means they don’t protect you as fully, but it means they’re also more convenient, as you don’t have to remove the alert every time you apply for credit.
Initial vs. extended fraud alerts
There are two types of fraud alerts:
- Initial: This type of alert lasts 90 days. There are no special requirements for requesting it. Request this type of alert if you suspect your information has been compromised, but you haven’t actually been targeted by identity thieves.
- Extended: This type of alert lasts for 7 years. It’s only available if you’ve been the victim of identity theft and have filed a police report. 5
Both types of fraud alerts are free. To request one, you only have to ask one of the credit bureaus, not all three. The bureau that you contact is then required to pass on your request to the others.
5. Sign up for identity theft protection
The credit bureaus offer identity theft protection services, which you can sign up for if you’ve experienced credit fraud or your personal data has been stolen or exposed:
These services usually include insurance for identity theft-related financial losses, and also may feature some of the other services outlined in this article, such as credit monitoring. The cost varies depending on the plan you sign up for.
6. Use multi-factor ID and manage your passwords
One way to keep your personal and financial information safe is to use multi-factor authentication whenever possible.
Multi-factor authentication is a widely available security option that requires you to provide at least two forms of verification to access your accounts. Opt for this method whenever possible.
You can also use a password manager to help manage your login info and generate and store secure passwords for you.
It’s a good idea to change your passwords regularly, as old passwords and usernames can be vulnerable to data breaches. You should change all of your passwords if you believe they’ve been stolen.
7. Develop good credit-building habits
Protecting your credit score isn’t just about guarding against identity theft. It also requires maintaining good credit-building habits so that you don’t inadvertently damage your credit yourself.
Make sure to do the following:
- Pay your bills on time: Your payment history on your credit accounts is the single most important factor contributing to your credit score (for instance, it accounts for 35% of your FICO score). It’s very important to always pay your bills on time—a single late payment can be deadly to your credit.
- Keep your balances low: If you have a lot of outstanding debt and a high debt-to-credit ratio (which measures how much of your credit you’re spending compared to your limit), it’s bad news for your credit score. To improve your score, keep your balances on all of your credit accounts as low as possible.
- Keep your old credit cards open: Closing your old, unused credit cards might seem like a good idea, but it’s actually better to keep them open (unless they’re hitting you with steep annual fees). Each card you have adds to your overall available credit, boosting your score.
- Apply for new credit only as needed: Be cautious about applying for new credit. Every application you submit will trigger a credit check known as a hard inquiry, which will take a few points off your credit score.
