Yahoo data breach shows why everyone should freeze their credit

Is this déjà vu? Just four months ago, Yahoo disclosed that 500 million user accounts had been hacked back in 2014. This week, Yahoo announced that more than 1 billion accounts were hacked in 2013.

These are the largest known security breaches of one company’s computer network.

Why should everyone get a credit freeze?

We’ve long been advocates of everyone freezing their credit. Unfortunately, we’re going to continue to see more and more data breaches, so the more that consumers can prevent identity theft if (or more likely, when) their accounts become compromised, the better.

Thanks to New York Times Your Money columnist for endorsing our position on credit freezes.

The types of stolen information in the Yahoo breach, which appear to include names, emails addresses, telephone numbers, dates of birth, passwords, and in some cases, encrypted or unencrypted security questions and answers, do not appear to be the types of information that can directly be used to commit existing or new account identity theft.

However, the information stolen in this breach could be used to “phish” or gather additional information that could be used to access existing credit accounts or create new credit accounts. Everybody, whether they have a Yahoo account or not, should be on the lookout for suspicious emails asking for verification of or submission of even more personal information.

Yahoo should offer free credit freezes to all customers

“Yahoo should also alert its users to the benefits of credit freezes and offer to pay for credit freezes with all three major national credit bureaus. This would be the most consumer friendly response to a major data breach and would be a huge advancement for identify theft prevention in our country,” said Mike Litt, Consumer Advocate with U.S. PIRG.

Due to huge marketing pushes by credit monitoring services that only alert consumers to fraud after the fact, most Americans are not aware that they can actually prevent ID thieves from opening new credit accounts in their names in the first place by placing freezes on their credit accounts with all three national credit bureaus. Credit freezes help prevent new account identity theft because they keep potential creditors from seeing consumer credit history, without which new accounts are typically not opened.

How can you freeze your credit?

Whether your personal information has been stolen or not, your best protection against someone opening new credit accounts in your name is the security freeze (also known as the credit freeze), not the often-offered, under-achieving credit monitoring.

It works by blocking your credit report from being shared with potential new creditors, such as banks or credit card companies. Most creditors will not issue new credit to a customer if they cannot see that customer’s credit report or score derived from it from at least one of the three major national credit bureaus.

Here is our step by step guide to freeze your credit.


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