welcome back to the financial freedom
show my name is rob berger and
in today's video we're going to talk
about an incredibly important topic
it's how to protect your credit from
identity theft now if you watched the
last video you know
i kind of fell victim to this my my
information my identity was compromised
i don't know when
there have been a number of data
breaches that i'm sure you've heard
about over the last number of years so
it could have been
any one of them and someone used my
information
in an attempt to get a loan from the
small business administration now
the good news is the loan was rejected
the bad news
was that the sba put a hard inquiry on
my credit report at experian now
you can check out the previous video to
learn exactly the steps i took
to get that hard inquiry off my credit
report i was able to do it
in less than a day so that's good but
today we're going to talk about now how
do we actually
take some affirmative steps to protect
our credit rather than waiting like i
did
uh for something bad to happen how can
we how can we kind of get on top of this
ahead of time so today we're going to
talk about
three related concepts fraud alerts
credit freezes and credit locks they're
similar but they're each different
i'm going to talk about what each of
them are how you can use them when you
should use them
how much they cost two of them are free
by the way
and so that's the goal today now at the
end
of this video i'm going to show you how
you can get access
to my notes you're looking at the some
of the notes
now it's a program i use called rom
research
i will show you how you can get free
access to these notes where i'm
starting to build out almost like a
wikipedia of information on personal
finance and investing
if you don't want the notes no problem i
will leave all the links to all of the
resources
that we talk about in this video in the
description
below the the video so let's get right
to it and i want to begin
with fraud alerts so remember we're
talking fraud alerts
credit freezes and credit locks now
with a fraud alert it's pretty
straightforward
you put an alert on your file that tells
potential
lenders hey this person's credit
may have been compromised and what you
need to do
is make sure you're dealing with the
person
you think you're dealing with before you
actually issue them a credit card
or give them a loan that's what a fraud
alert does now the good news is
they're totally free you don't have to
pay for them they've been free since
legislation was passed a few years ago
that made them free
so they're totally free here's the other
nice thing you only have to call one of
the three credit bureaus once you have a
fraud alert
place on your credit file at one of the
three credit bureaus
they will notify the other two for you
that's exactly what happened
in my case and i got emails almost
instantaneously certainly the same day
from all three credit bureaus confirming
that a fraud alert had been placed on my
file
now what you see on the screen is from
the federal trade commission
again i'll leave links to all of this
below the video this walks through
how fraud alert alerts work and what
you'll learn
is that there are actually three
different kinds of
fraud alerts so here's the deal with a
i'll call it a regular fraud alert
again you can put it on your your credit
report for free you just call one of the
credit bureaus to do it they'll notify
the other two couldn't be any easier
but it only lasts one year you can renew
it but you have to remember to do that
if you just let it go it's going to
expire after
a year so there are two other types of
fraud alerts
that you can consider the first is
called an extended fraud alert
you can see that here the ftc has a page
on this and
if your identity has actually been
compromised so imagine someone's
actually taken out a credit card in your
name or
a car loan for example you can get an
extended
fraud alert put on your credit that
lasts seven years now
in order to do this though you first
have to report the identity theft
at identitytheft.gov i mentioned
this website in the last video it's
where you can go
to it's a federal trade commission run
website and report identity theft
as i mentioned in the last video someone
actually has to use
your identity to for example get a loan
or a credit card if they attempt
to do that but fail which is effectively
what happened in my case
that's not the kind of thing that you're
going to report to identity theft.gov
but if they're successful
you can report it and then once you've
done that you qualify for an extended
fraud alert
of the last seven years now there's
actually a third type
that many folks don't know about and
it's called an active duty alert so it's
a little different than a fraud alert
but it effectively does the same thing
for members of our military that are on
active duty it just alerts creditors
that well you're on active duty
and to reach out to you to confirm that
you are the person applying for credit
so for example
if you're stationed overseas and i don't
know someone in topeka
tries to open up a best buy credit card
and best buy sees this active duty alert
you know they're going to take steps to
make sure that it's actually you
applying for the credit now
with an active duty alert you can renew
it every year that you're on
active duty so fraud alerts are a great
tool to use they're
very easy again notify one bureau they
notify the other two
for you it's a quick phone call it's
free
and there are as i mentioned three
different kinds the regular fraud alert
an extended fraud alert if your identity
has actually been stolen last seven
years
and for members of our military on
active duty there's also an active duty
alert now
having said all of that my strong
preference and recommendation and what
i'm doing is to actually put a credit
freeze on my account now they're
different and so let's get right to them
and again the ftc has an excellent page
of information
on how a credit freeze works but uh
here's here are the basics and what you
need to know
first of all they're totally free just
like a fraud alert the same statute
passed a couple of years ago
made credit freezes free uh it actually
followed from a data breach from one of
the credit bureaus that sort of
triggered that new legislation so
credit freezes are totally free one big
difference though
you have to you have to set up the
freeze with each
one of the three credit bureaus you
can't just
freeze your credit at one and expect
them to notify the other two
doesn't work that way having said that
it's extremely easy to do
i was able to do it in a matter of oh
about a half hour total time
i think one was done on on the phone
with experian
uh one with transunion it was done by
the by phone but i didn't even have to
actually interact with
a human being it was just all
computerized and
with the third uh equifax i just i did
it online it's
very simple to do but again you have to
do it
with each of the three credit bureaus
now here's another big difference
with a fraud alert a potential lender
can still gain access to your credit so
imagine
someone who has stolen your identity
they could apply
for say a credit card and the credit
card issuer would have access
to your credit file now they would see
the fraud alert
and then they would be required to
confirm your identity but they would
still get access to your credit report
one option with credit freeze would be
to say look i don't even want them to
get
access to it i want to freeze them out
if you will
from even looking at my credit report
and that's what a credit freeze does and
it's frankly
why i prefer it now there are
at least one potential downside to a
credit freeze and that is
creditors are frozen uh frozen out or i
don't know
prevented from looking at your credit
report even if you're the one applying
for the credit
so if you're going to apply for a credit
card or some other sort of loan
you'll need to remove the credit freeze
before you do now again the good news
there is it's very easy to do
you can do it online uh so you could go
in and
remove the credit freeze under federal
law they have to remove it within one
hour
if you request them to do so either
online or by phone
and you could then apply for credit and
when that process is
done you could go back and and add the
freeze back onto your credit file so
are there a few more hoops you have to
jump through if you want to apply for
credit
for yourself yes but i personally think
unless you're in some situation where
you're applying for a lot of credit
over an extended period of time i think
the credit freeze
is the much better way to go over
a fraud alert so that's the fraud alert
now we have the credit freeze and as i
said i've done that for all three of
my credit reports and i'm in the process
of doing it for my wife
and i'm also going to do it for our our
grown children or
at least talk to them and get them to do
it frankly at this point
given the amount of identity theft
that's occurred data breaches that have
occurred
i think the default view should be put a
credit freeze on each of your three
credit reports now beyond that you're
going to hear the term credit
lock what does that mean well what uh
the three credit bureaus have done
is taken a credit freeze and then added
additional
i'll call them features and then charge
for it so
the credit lock unlike a credit freeze
or a fraud alert costs
money what they typically do are a
couple of things
they add credit monitoring to it and
they
they promise to remove the the credit
lock if you want to apply for credit
immediately you don't have to wait for
that that full one hour
now if you're like me it's like i don't
really care about waiting for an hour
and i can get
i can monitor my credit through
any number of credit card issuers who
will do it for free
so in my view most people don't need a
credit lock it's just not worth
the money i suppose some of you might
just think it's easier and i feel safer
and i can
remove the lock immediately and it's
worth the money
but keep in mind that depending on which
credit bureaus you you use
and presumably you'd want to use all
three you know you're going to be
spending 25 to 50 bucks a month on
credit locks
and again for my money it's just not
worth it
but i pointed out here because you'll
see it and when you go to freeze your
credit with the credit bureaus
you'll see advertisements and links for
a credit lock
and i don't want you to be confused
about what a credit lock is versus a
credit freeze
so again a credit freeze is free it
freezes
out all all potential lenders from
looking at
your credit report all a lock does is
adds a few
extra features provided by the credit
bureaus but again they charge for it
and frankly particularly when it comes
to credit monitoring
you can get those features for free
elsewhere
so there you go that's a fraud alert a
credit freeze and a credit lock
extremely important and a great way
particularly the freeze or maybe the
fraud alert to protect your credit from
a
potential data breaches or identity
theft now
i mentioned access to my notes let me
show you that
this is the page i've created fraud
alert versus credit freeze versus
credit lock let me add that i keep my
notes
in a tool called rome research this
particular file is where i'm keeping
basically all of the personal finance
and investing content
that i discuss on this channel my goal
is over time this will be hopefully a
wealth of information
and resources that you can use to help
improve
your finances again i give access to it
for free
for those that sign up for my newsletter
which is also free
so if it's something that's of interest
to you you'll see
in the description below the video how
to sign up for the newsletter and you'll
get instant access
to these notes and if that's not of
interest to you no worries i'm also
going to include the links to the
resources at the ftc that i mentioned in
this video
below in the description and if you have
any questions as always just leave a
comment i'll do my best
to help any way that i can
until next time remember the best thing
money can buy
is financial freedom