A Free Defense Against the Next Big Data Breach: Freeze Your Credit
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What is the main topic discussed in this episode?
Access to affordable credit helps me pay my employees, but I don't really need it. Inflation is killing me. But who cares? Big retailers are making record profits. That's why we support the Durbin Marshall credit card bill. See? Banks and credit unions help small businesses make payroll. This bill would cut the vital resources they need. While increasing megastore profits. They deserve it, don't they? Tell Congress, stop the Durbin Marshall money grab for corporate megastores. Paid for by the Electronic Payments Coalition.
What is the credit-freeze safety tip introduced at the start of the episode?
Here's your Money Briefing for Monday, September 9th. I'm J.R. Whelan for The Wall Street Journal. Identity theft can destroy your credit and take months to resolve. And a majority of all identity fraud reports in the second quarter of 2024 were tied to fraudsters opening new accounts in someone else's name. One way to stay ahead of the bad guys is to freeze your credit.
If you already have a line of credit, like a credit card that's already open, you can continue to use that credit card. You could even have your credit limit increased. So your existing creditors can still have access to your file if they want to devaluate your account for a higher limit or potentially reduce that limit.
We'll talk to Wall Street Journal personal finance reporter Amani Moiz after the break.
How does a credit freeze actually block new account fraud?
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A simple free way to protect your credit from identity theft is to freeze your accounts. Wall Street Journal personal finance reporter Imani Moise joins me. Imani, when somebody freezes their credit, what exactly is frozen?
So what a credit freeze means is that no one could access your credit report for the purpose of extending you a loan. If you are shopping for a car, for example... The dealership won't be able to see your credit score, but nothing else is frozen. So you could still have a landlord, for example, check your credit to get approved for an apartment or a potential employer check your credit to offer you a job. But when it comes to a new loan, no one can take that out in your name.
Is an account holder's ability to use their credit cards frozen in this process also?
If you already have a line of credit, like a credit card that's already open, you can continue to use that credit card. You can even have your credit limit increased. So your existing creditors can still have access to your file if they want to devaluate your account for a higher limit or potentially reduce that limit.
Why is the spotlight on freezing credit now?
Because a few weeks ago, there was a major data breach that came to light from this company called National Public Data, which, interestingly enough, a lot of people had never heard of before this breach. But there's a lawsuit that alleges that nearly three billion personal records, including social security numbers, mailing addresses and full names, have been compromised in a potential breach. Considering there's not even three billion Americans, you're probably included.
Wow. What kind of damage can identity theft or crimes by fraudsters potentially do to your credit profile?
It could wreak havoc, especially if you're not paying close attention. So say a fraudster gets your credentials on the dark web and they open up a credit card in your account. You may not get alerted right away. They can max out that credit card, do that a few more times. And then by the time you check your credit report or you get a notification about your score, it's probably fallen something like 400 points. So on the plus side, All credit cards have protection so that if you can prove that it was not you that made those charges, you're not financially liable for those debts. However, it can mess up your credit and take a really long time to unwind and clear your name with all of the banks and the retailers or whatever companies may be involved.
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Chapters
4 chapters
1
What is the main topic discussed in this episode?
0:00–0:34
2
What is the credit-freeze safety tip introduced at the start of the episode?
0:34–1:27
3
How does a credit freeze actually block new account fraud?
1:27–4:24
4
Can I still use my existing credit cards after freezing my credit?
4:24–9:16
Speakers
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