Skip to main content

Here’s Why a Credit Freeze Won’t Protect Your Identity Completely

By U.S. News & World Report

U.S. consumers are still reeling from news of the massive data breach announced by Equifax in September. Some 143 million Americans were impacted in the hack, which exposed all sorts of personal information such as names, dates of birth, Social Security numbers, addresses, and in some instances, driver’s license numbers.

Data breaches are increasingly a part of modern-day life — so much so that understanding how to react to a data breach is just as important as knowing how to prevent one.

[See: 10 Ways to Protect Yourself From Online Fraud.]

Many people have turned to credit freezes in the wake of the Equifax breach. When you “freeze your credit” you ask the three major credit bureaus –Equifax, Experian and TransUnion — to block anyone from opening new credit in your name. Even you won’t be able to open a credit card or finance a cell phone while your credit is frozen.

But how effective is a credit freeze, really, in preventing identity theft and fraud?

While a credit freeze makes it practically impossible for fraudsters to open up new lines of credit with your name, it’s actually not the one-size-fits-all answer we might like it to be. Here’s what to know.

[See: 12 Habits to Help You Take Control of Your Credit.]

It won’t stop hackers from using your existing accounts to commit fraud. A credit freeze is only good for preventing future misuse of your personal information. If hackers manage to access your existing bank or credit card accounts, it can be difficult to stop them. With the kinds of info accessed during the Equifax breach, scammers could have enough puzzle pieces to commit financial fraud, medical identity theft, employment identity theft or tax identity theft.

It won’t protect you from future data breaches. Credit bureaus aren’t the only businesses that keep sensitive consumer data on file. Think about all the times you’ve filled out medical forms with your Social Security number, birthdate and address, or all the info you fork over to banks or email services when you open a new account. The Equifax data breach isn’t the largest breach in U.S. history by a long shot — it follows massive breaches at Yahoo, Myspace, LinkedIn and Home Depot.

[Read: 10 Simple Ways to Raise Your Credit Score.]

Other ways to prevent identity theft. Banks, of course, have their own sophisticated fraud-detection strategies, but they aren’t fail-safe measures. For that reason, it’s a good idea to set up additional layers of security on your own.

Set up alerts, so you’re notified when someone makes a charge using your credit or checking accounts over a certain dollar limit.

You should also sign up for multi-factor identification for any service you use that offers it, such as email and bank log-in pages. This will generate a unique code and send it to you via email or text. Unless a hacker has both your email account and cell phone handy, he or she won’t be able to log in to your account. Credit cards typically offer zero fraud liability protection, which means you won’t be on the hook for fraudulent purchases.

Look out for any peculiar marks on your credit report and don’t brush off notifications from medical providers or government agencies as spam. They could be clues that someone has used your name to access medical care or tap into your government benefits.

It’s relatively easy to monitor your credit report these days using free services such as Credit Karma or Credit Sesame. You also can access a free credit report from all three bureaus once per year at annualcreditreport.com. You can pay for identity-theft monitoring services, but pay close attention to the monthly fees they charge.

If you notice any red flags on your credit reports, you should dispute them immediately.

How to freeze your credit. If you want the extra peace of mind, you can, of course, freeze your credit. The key is to contact all three credit bureaus and request a freeze at each. Equifax is waiving fees for consumers who want to freeze their credit. Fees for freezing and thawing your credit report vary by state. The National Conference of State Legislatures has more information on state rules on credit freezes and this list from TransUnion offers a look at state-by-state fees.

More from U.S. News

10 Completely Careless Credit Card Mistakes You’re Making

8 Ways to Maximize Your Credit Card Rewards

What to Do If You’ve Fallen (Way) Behind on Your Credit Card Payments

Here’s Why a Credit Freeze Won’t Protect Your Identity Completely originally appeared on usnews.com

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
Read Next Story

Related News

Weather service confirms that tornado hit Caroline County, Md.

Kansas City beats San Francisco, 31-20, to win Super Bowl 54

Ryan Zimmerman reportedly agrees to 1-year deal with Nats