The Fair and Accurate Credit Transaction Act of 2003 provided individuals with valuable rights to the credit information companies keep on them.

Credit Reports and Scores

The first thing you should know is that you have a right to see your credit report from each of the three major credit bureaus once annually without cost - including Transunion, Experian, and Equifax. The report will contain the important information that impacts your credit score.

Your credit score is a numerical representation of your creditworthiness, which takes into account past and current credit activities, including any late payments, judgments, liens, bankruptcies, and foreclosures.

The calculation of your score will typically vary between bureaus, so just because one of your reports is fine, it doesn’t mean another isn’t showing an old account that should be listed as closed.

While your credit report can be obtained for free, your credit score will cost you money, except in the case where you have been denied a loan on the basis of your credit score, in which case you may obtain your credit score for free. Also, many banks and lenders are now providing their customers with free monthly credit score updates, but it will vary on which bureau they provide your score from.

When you see an offer for getting your free credit score, it may be a marketing-driven incentive to get you to sign up for a fee-based credit monitoring service. The score may be only available at no cost if you agree to sign up for a trial subscription and don’t cancel prior to the end of that trial period.

Visit https://www.annualcreditreport.com to get your free reports.

Freezing your credit

To help prevent fraud, you are allowed initiate a free credit freeze to prevent lenders from pulling your score.

Many of us have received at least one letter informing us that some piece of our personally identifiable information (PII) has been compromised due to data breaches at different institutions. You might even remember when Equifax, one of the three bureaus in charge of keeping our information secure) had a major data breach!

If a couple pieces of your information gets out on its own, it doesn’t do thieves much good (like a date of birth without a name attached to it). But when pieces are lost in connection to each other (name, date of birth, address, SSN), that’s when the trouble really starts.

By going to each bureau directly, you can request a credit freeze on your account to prevent anyone from applying for credit in your name. When thieves submit a seemingly valid request for a loan, the system checks with the credit bureau and then the application gets rejected if there is a freeze in force. This is often when you’ll receive a letter or call at home confirming “your” request for a loan/credit card was denied because they could not pull your credit report. Validate it is a legitimate letter and then find the proper customer service number on your own to report it as a fraudulent application - use caution when calling a number printed on a form like this, in the event it is also a fake number to direct you to the identity thieves.

If you personally are going to apply for something, simply unfreeze your credit for a short window of time by logging into your account (you can even automate the timeframe it’s open now), submit your application at a lender and then refreeze your score once you’ve been approved. You may need to ask the lender which bureau they pull information from so you can unfreeze your credit.

Links for each bureaus free credit freeze process can be found here:

Transunion

Experian

Equifax

Anytime is a good time to tighten up your identity security

If you haven’t been as careful as you intended, consider this your annual reminder. Here are a few best practices to adopt or continue:

• Change your passwords regularly: Every six months is a great habit to get into, even if just for your most important accounts. Use a password generator to create more robust and complex passwords.

• Check your credit report: You may have been the target of identity theft or fraud and not even realize it until it shows up on your credit reports.

• Tax time is prime time for identity thieves: They would love to get their hands on your 1040 form, and they would also love to claim a phony refund using your personal information. Be careful when sharing information online (see below).

• The I.R.S. doesn’t use unsolicited emails to request information from taxpayers: If you get an email claiming to be from the IRS asking for your personal or financial information, report it to your email provider as spam.

• Avoid “coffee housing” your personal information: Never risk disclosing financial information over a public Wi-Fi network. (Broadband is susceptible, too.) It takes little sophistication to do this—just a little freeware.

• Look for the “https” & the padlock icon when you visit a website: Not just http, but https. When you see that added “s” at the start of the website address, you are looking at a website with active SSL encryption, and you want that. A padlock icon in the address bar confirms an active SSL connection. For solid security when you browse, you could opt for a VPN (virtual private network) service that encrypts 100% of your browsing traffic.

Being careful with your personal data means more than just shredding your documents. Share these reminders with friends and family and help protect against identity theft.