What the Target Breach Can Teach You About Protecting Your Credit

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If you’ve been anywhere near a television or the internet this week, then chances are you’ve heard about the Target data breach. As of now, some 40 million people who’ve shopped at Target since Thanksgiving could be at risk of having their credit card information stolen and sold.

For those who’ve shopped at Target even once in this time frame, it could mean constant vigilance to catch fraudulent purchases. For those not affected, perhaps it’s a simple sigh of relief. However, there is much that we can all learn from this. When it comes to data breaches like this, the question may be more of a “when” than an “if”. Here’s how you can protect your accounts from current and future attacks.

If You’ve Potentially Been Affected by the Breach:

If you’re one of the 40 million customers who has shopped at Target since Thanksgiving, then the time to act is now. Consider yourself a potential victim and take the necessary steps to protect your money and credit – because you actually may not hear from Target. Here’s why, according to an article in the New York Times:

“To date, Target customers have not yet been made aware of the breach. Though state notification laws differ, most states require that companies notify customers of a breach if their names are compromised in combination with other information like a credit card, Social Security number, or driver’s license number.

But states make exceptions for encrypted information. As long as companies scramble consumer information with basic encryption, the law does not require companies to tell customers about a breach.”

Here’s what to do if you’re a potential victim of this breach:

Change your pin
If you used a debit card during a transaction and were asked to choose “debit” or “credit” and you chose debit, then change your pin. When you enter any pin at the point of sale, it is then susceptible to attacks like this. According to The New York Times,

“If they were able to intercept the PIN information, as well, it is also possible that thieves could withdraw money from a customer’s account through an A.T.M.”

Until you change your pin, monitor your checking account balance to ensure that cash hasn’t been withdrawn from anyone other than yourself or authorized users on your account.

Change your passwords
Just in case you’ve been affected, go online and change the passwords to your bank account and credit cards. As always, create unique, complex passwords and don’t create one password for all accounts.

Monitor your transactions
It’s possible that you won’t know you were affected by this breach for sure until you see a fraudulent charge on your account. Keep checking every few days and make sure that all transactions match your receipts.

If informed of a breach on your account, change your credit card numbers
If you are informed by Target that you were directly affected by the breach, call your bank and credit card companies and ask them to close your accounts and create new ones. You’ll want to speak to the fraud prevention departments to do this.

How to Protect Yourself from Future Data Breaches:

If you’ve been nowhere near a Target in the past few months, then you can breathe a sigh of relief. However, data breaches can happen like this at anytime so don’t sit still for too long. This troublesome situation is a good opportunity to become more proactive on protecting your financial accounts.

Protecting yourself from fraud doesn’t have to be an arduous task. Below are some steps to follow as well as some tools to help you automate them.

Sign up for credit score monitoring.
Fraud doesn’t just affect your purchases. If someone is able to get their hands on the right information, they can actually open brand new accounts in your name. This allows them to buy as much as they can get on credit using your information without you being alerted (since the purchases aren’t on your current credit lines). In other words, this could go on for years before you ever find out.

That’s why credit score monitoring is so important. If you see a sudden drop in your credit score, then that’s the first alert that something strange is going on. But the only way you can see this is if you understand your current score and can be alerted quickly of changes. Here at ReadyForZero, you can sign up for credit score monitoring as an upgrade on your debt payoff plan. If you don’t currently have debt, you can also monitor your credit score on websites like Credit Karma, Credit Sesame, and Credit.com.

Review your credit report quarterly.
There’s a difference between your credit score and your credit report – and you’ll want to stay on top of both. Each year you are allowed one free credit report from each of the three credit reporting bureaus. That equals one per quarter, allowing you to spot suspicious items on your credit report quickly.

To obtain your free credit report, go to AnnualCreditReport.com and only obtain one report at a time. The reporting bureaus you’ll see are Experian, TransUnion, and Equifax. If you do see errors on your credit report at any time, dispute the error the error with the bureau whose report is showing the error (or all three if it’s showing up on all three). If you’ve done all of this and still haven’t received resolution, contact the CFPB.

Sign up for an app that allows you to monitor your transactions.
Finally, find an app that helps you view your purchases in real time so you can be alerted as soon as something posts. If you have a ReadyForZero account, you can do this by setting up a purchase alert, which alerts you if any purchases over the amount you designate is made. Again, if you don’t have debt, then you can set up a similar type of alert using Mint. If you do see a purchase that wasn’t made by you, contact your bank or lender (depending on what was used to make the purchase – debit card or credit card) and ask to speak to the fraud protection department. Many banks are quick and adept at handling this so if you act fast, you can prevent this from compounding into a larger issue.

By signing up for alerts to notify you of unusual purchases, monitoring your credit score, and reviewing your credit report, you can rest assured that you’re taking the right steps to protect your finances both now and later against data breaches. While you can’t prevent or predict an attack, you can build a system to help you spot a problem and act fast.

Image Credit: Eric M Martin

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