Basic Simple Common Sense Precautions, and How and When to Freeze your Credit
What is it:
A social security number is our default version of both a national identification number and your personal credit file number. With just a name, address, date of birth, and social security number, thieves can open various lines of credit creating havoc in your personal financial life. Therefore, it is in your best interest to protect this number just as you would the keys to your home and the checks from your bank account. Very few people should be given access to this crucial number.
Social Security numbers were first created in 1936 during the new deal with the purpose of identifying retirees that were to begin receiving social security benefits. It has since morphed into our national ID number.
Until such a time when social security numbers are solely used for social security benefits, it is imperative to protect it, as it is the key to your financial castle.
Don’t Carry Your Social Security Card in your Wallet:
There is no reason to carry your social security card around with you anymore. Simply put, if there is a legitimate reason for someone to need your social security number, you can either recite it from memory or call them with it later. However, I would caution you to only sparingly give out this number. The risk of carrying your social security card complete with your social security number and full name is just too great. Consider just carrying your driver’s license or state issued identification card around, instead.
Don’t Always Share your Number:
Our society seems to be built around asking for social security numbers on all sorts of forms, but many companies no longer require it. Sometimes, offering up your driver’s license number may suffice. Your driver’s license number is in and of itself not enough identification to open up various lines of credit. There are some situations when you will have to hand out your social security number, such as when you buy a house or get life insurance.
One suggested solution to requests for social security numbers on forms is to ignore them. In other words, just skip over the question and see if someone contacts you about it missing. Often, it ends up not mattering to many private companies and government organizations. Likely, you are not the first person to decide to not give it out.
Be Wary of Strange Phone Calls and Emails:
There are all sorts of scams of people calling or emailing asking for your social security number. Don’t let yourself be hoodwinked. Just because someone asks for this number, does not mean that you have to give it to them. You should tell anyone that needs your social security number to send you a letter to the address that they have on file for you. Any organization that legitimately needs your social security number will already have your home address. If they do not have your full address already, just hang up the phone. If they do have your address, then this will allow you time to consider your options and perhaps ask your neighbors and family.
Thankfully, Medicare is Changing:
In the past, federal Medicare used social security numbers as your Medicare Identification number. As of April 2018, Medicare has changed to offering: “new unique numbers in place of cardholder SSNs.” This is a terrific enhancement to our national Medicare program. However, the issue of what to do with all of those cards still out there is still being solved. Luckily, this same program is expected to replace millions of existing cards with new ones in the next couple of years.
Just Freeze it:
There are two methods to protect your credit files which use your social security number. Method number one is something called Credit Monitoring. Generally, there is a monthly fee involved and it notifies you when someone pulls your credit file.
The second method involves locking or freezing your credit file. This method, although more complicated, is really an actual solution as opposed to just a notification. Would you rather have a notice that a thief is breaking into your home or a lock to prevent that door from being opened?
In the end, the decision to monitor or freeze your credit is up to you. But, be aware that both solutions require action on your part. The pricing on freezing and unfreezing your credit used to be state dependent. However, because of a new law, the New York Times reports that you will be able to freeze and unfreeze your credit for free.
If you have reached the point in your life where you will not be opening up too many more lines of credit, I cannot see why given the quantity of social security number thefts, that you would not lock your credit file with a credit freeze. Even for those of us still opening up new lines of credit, I still believe that freezing your credit is a worthy safety precaution.
How to Freeze your Credit:
The best credit freeze guide available is on the consumer advocate Clark Howard’s site. In order to freeze your credit, you will need to sit down at a computer or phone and contact each of the three credit rating agencies. Of course, you can also call each and every one of them.
Transunion: 1-888-909-8872
Equifax: 1-800-685-1111
Experian: 1-888-397-3742
If you are computer savvy, often the easiest way is to go direct to their sites and fill out their online forms. Be careful with exactly which sites you go to (another reason to use Clark’s guide.) You will need to be prepared with your social security number, date of birth, and other vital information. Typically, they will test your knowledge, as they should, to confirm you are who you claim to be. Gratefully, you will no longer need to pay to do this.
Conclusion:
Your social security number is your vital unique identification number, whether you like it or not. Do not be fooled into thinking that you are safe just because you have never had an incident in the past. Protect the keys to your castle with knowledge and action.
Written by Scott W Johnson
Scott W Johnson is an insurance agency owner at Whole Vs Term Life Insurance and is based in California. He believes in detailed client risk analysis. He is passionate about the outdoors and his family. He locked his social security number over five years ago and never looked back.
*The views expressed are those of the author and do not necessarily reflect those of Future File or Intercap Merchant Partners, LLC. We always recommend that you talk to a trusted advisor.
