Credit and home buying go together like peanut butter and chocolate. Of late, hackers and identity thieves have left a bad taste in the mouths of many prospective home buyers.
A perfect example was the hacking a few years ago of consumer data from credit files maintained by Equifax, one of our nation’s three major credit bureaus. In addition to stealing the names, addresses, birthdates and social security numbers of 143 million consumers, the identity thieves also pilfered some driver’s license and passport information.
In 2007, the state of New Mexico began making available to its residents a new tool designed make it more difficult for hackers to gain access to their credit files. That tool is known as the credit “Security Freeze.” In essence, the freeze locks, or freezes, access to credit reports and our credit scores so that potential creditors, aspiring thieves and other third parties won’t be able to poke around in individual files unless the customer gives the okay. Mine’s been in place for years.
Who may take advantage of this safeguard? Any New Mexico consumer is eligible to order a freeze, but keep in mind that freezing a file slows down by a day or two the approval process for any type of credit a person may want to obtain.
Putting a freeze in place is as easy as submitting a request to one of the three credit bureaus: Experian, TransUnion and Equifax. The bureaus are obligated to put the freezes in place within three business days if they receive the request by mail, or within 15 minutes if they receive the request by secure electronic method or by telephone. Pin numbers are then issued so that consumers can lock and unlock their files at will.
The freezes will stay in place until the consumer decides to lift them, but certain entities will still have access to the information. Current creditors and collection agencies acting on creditors’ behalf are two such exceptions, with other creditors who want to make us offers of credit being another. These "other" creditors have far less access than do the companies we’re already doing business with and typically see only the basic information contained in so called "credit headers."
Government agencies will also be allowed to nose-around in credit files if they’re collecting child support payments or taxes, or investigating Medicaid fraud. Search warrants, administrative orders and subpoenas issued by government agencies are also keys that can easily unlock files.
Fraud Alerts are also an important tool that can be used to prevent the hijacking of our credit.
According to the folks at the Federal Trade Commission, three types of fraud alerts are available:
Initial Fraud Alert. If you're concerned about identity theft, but haven't yet become a victim, this fraud alert will protect your credit from unverified access for at least 90 days. You may want to place a fraud alert on your file if your wallet, Social Security card, or other personal, financial or account information have been lost or stolen.
Extended Fraud Alert. For victims of identity theft, an extended fraud alert will protect your credit for seven years.
Active Duty Military Alert. For those in the military who want to protect their credit while deployed, this fraud alert lasts for one year.
To place a security freeze or fraud alert on your credit files, simply contact one of the nationwide credit reporting companies. Credit freezes and fraud alerts are free, however you must provide proof of your identity. The company you call, email, or contact online must tell the other credit reporting companies; they, in turn, will place an alert on their versions of your report.
To request a security freeze or place a freeze or fraud alert on your Equifax file, log on to www.freeze.equifax.com or call 800-349-9960. TransUnion can be accessed at www.transuntion.com/credit.freeze or by calling 888-909-8872. Experian can be reached at www.experian.com/freeze or 888-397-3742.
To learn all there is to know about security freezes, fraud alerts and identity theft, Do Not Call legislation and opting out of being on the receiving end of unsolicited offers, contact the Federal Trade Commission at www.ftc.gov or call their I.D. Theft Hotline at 877-438-4338.
While there’s no foolproof way to protect access to your credit files, taking advantage of credit freezes and fraud alerts are excellent, low cost ways to protect yourself from predators who are looking to take advantage of any chink in your credit-file armor.
See you at closing!
Gary Sandler is a full-time Realtor and president of Gary Sandler Inc., Realtors in Las Cruces. He loves to answer questions and can be reached at 575-642-2292 or Gary@GarySandler.com.
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This article originally appeared on Las Cruces Sun-News: Now’s the time to freeze your credit files