Should I sign up for identity theft protection right away?

Posted by Caitlin on January 28th, 2009

The following post in our Reader Question series is an actual user submitted question. To maintain the integrity of the original question, we do not edit or change reader questions in any way.

Q: My car was broken into tonight and my purse stolen. I have my driver license, passport, employee ID card and a check book. We canceled our two credit cards. Should I sign up for your [identity theft protection] services right away?

A: Yes, we would strongly encourage you to sign up for an identity theft protection service as soon as possible. Canceling your credit cards was a good start, but a thief could easily use your checkbook to write fraudulent checks. Different banks have different liability policies, so you may or may not be protected in the event that this occurs. If you have not already notified your bank of the theft, you should do so immediately.

With so many of your personal and financial documents, a criminal could also open new accounts in your name. This is one of the most serious risks associated with identity theft. In order to prevent this from occurring, you should contact each of the three credit bureaus and ask them to place a fraud alert or a credit freeze on your credit report.

A fraud alert is an annotation on your credit report that lets potential lenders know that you have reason to believe that you are an identity theft victim. Fraud alerts expire every ninety days and do not automatically renew. You will need to reset fraud alerts every ninety days by contacting each of the credit bureaus directly.

A credit freeze is a more serious measure. It will completely lock down your credit file and ensure that no financial accounts are opened in your name. However, this will also prevent you from opening legitimate financial accounts. There is a small fee in most states for setting a credit freeze.

Here is the contact information for each of the three credit bureaus:

TransUnion: 1-800-680-7289; www.transunion.com; Fraud Victim Assistance Division, P.O. Box 6790, Fullerton, CA 92834-6790

Equifax: 1-800-525-6285; www.equifax.com; P.O. Box 740241, Atlanta, GA 30374-0241

Experian: 1-888-EXPERIAN (397-3742); www.experian.com; P.O. Box 9532, Allen, TX 75013

Since you are at an elevated risk for identity theft, you should probably consider an identity theft prevention service such as TrustedID or LifeLock. These services will automatically renew your fraud alerts before they expire, and employ various other monitoring techniques to help prevent identity theft. If you do become a victim, they will help you recover your identity. To learn more about identity theft protection services, see our reviews and comparison chart.