Freeze Your Credit and Make 'Em Change

Of all the massive hacks of recent years, the Equifax hack may be the worst.  Some 145 million persons had their personal information stolen.  Even though other hacks may involve larger numbers (the Yahoo hack may have victimized 3 billion--yes, billion--accounts), Equifax had the crown jewels:  Social Security numbers, birth dates, home addresses and phone numbers, and some credit card account numbers and drivers license numbers.  Bad guys can use this information to open phony credit card and other loan accounts in your name, steal your tax refund, grab your Social Security check and get prescription drugs in your name (which could interfere with your ability to get medications and maybe even implicate you in police investigations). 

What to do?  The best thing is to freeze your credit accounts.  These freezes, called security freezes, prevent new creditors and other persons from getting access to your credit information unless you specifically authorize it.  It doesn't stop existing creditors and their collection agents, or the government from getting access.  But it puts a substantial barrier in the way of fraudsters.  It's not perfect--the bad guys might still try to use your stolen personal information to snare your tax refund or your Social Security benefits, or snag some opiods in your name.  But a credit freeze is a lot better than the alternatives.  Forget about credit monitoring and fraud alerts--they aren't great protection.  And a credit lock isn't as good as a credit freeze.  Credit freezes give you legal protection under state law, while a credit lock is just a contract with the credit reporting agency that may be difficult to enforce.  Credit locks may also cost you more in fees (which is one reason the credit reporting agencies might want to sell you a credit lock). 

Credit freezes can be a little inconvenient, because you have to lift them any time you want to apply for credit.  But that is a lot less bother than the aggravation of cleaning up your credit after the bad guys have impersonated you (a process that can take months or years).

One more reason to freeze your credit is to make the idiots (the ones that got hacked) change things.  The credit reporting agencies and banks and other lenders don't like freezes.  They interfere with business and revenue flow.  The credit reporting agencies and lenders have a harder time making money if a lot of people freeze their accounts.  And that is the point.  The current system using Social Security numbers as universal identification numbers has just been blown up by the Equifax hack.  For all practical purposes, you have to assume that your Social Security number is publicly available.  You have no privacy any more.  You're not safe, and your finances are not safe.  The SSN system of personal identification is now completely kaput.

Make 'em change.  Freeze your credit and take profit opportunities away from the credit reporting agencies, and the banks and other lenders.  Faced with a business downturn, these massive institutions will lead the way to change.  With the potential loss of who knows how many millions of dollars of profit, they will implement posthaste new and improved systems of personal identification.  Either that, or their senior executives' stock options will belly flop.  And that they won't allow.  So freeze your credit.  It might be the best thing you can do right now for your financial privacy.