When was the last time you checked your credit reports?
For those of us working overseas, keeping track of our credit history in the US doesn’t seem to be that much of a priority. Depending on your living arrangement, you may not have the need for credit or credit-like services (such as a phone bill charged in arrears) from a US company at all. Even though by law it is free of charge for you to obtain credit reports once a year, and the online process is fairly straight forward, you may have very little motivation or just don’t remember to do it.
As a matter of fact, the more important benefit of checking your credit report regularly is not to make sure you have good credit, but to detect if anyone has assumed your identity to obtain credit without your knowledge. Identity theft, a risk popularized by the movie of the same name, is real and present. According to the Bureau of Justice Statistics, 1.1 million people had their information misused to open a new account in 2012. Living overseas may make us more likely victims of identity theft. Since we are not physically present in the US, companies or financial institutions are less likely to reach us in time to clear up fraudulent activities; when fraudulent activities happen, it also takes us longer to resolve them.
So what can you do to reduce the chance of being tangled in identity theft while you are overseas for an extended period of time? In addition to remembering to check your credit report annually to catch any discrepancy after the fact, you should consider placing a Security Freeze on your credit.
Security Freeze is a feature offered by all three credit reporting agencies- Experian, TransUnion, and Equifax– originally only to identity theft victims, but now to all consumers. It allows you to control third party access to your credit reports, so no new credit accounts can be opened without your approval. The downside of this feature for many residing in the US is that it prevents or results in a delay in some application processes that utilize the identity verification system from the credit bureaus. You may remember answering a few questions when you last applied for services online in the US, such as “What institution holds your mortgage?”or “Which of the following addresses have you lived in?” This information came from your credit files, and if you freeze them permanently, you may have trouble utilizing automatic application processes to obtain services.
Being overseas, we are likely to be free from the need to obtain new credit or to utilize this automatic identity check process. In the rare event that you may need to open third party access, you are also able to temporarily lift the security freezes after you place them. For example, if you are thinking about buying a house back in the US, you can lift your security freeze for the period of time that you apply for the mortgage, and replace it once the process is completed. Of course, if you foresee that you will need to lift the security freeze multiple times in the near future, possibly for new “loan, credit, mortgage, insurance, rental housing, employment, investment, license, cellular phone, utilities, digital signature, internet credit card transactions or other services, including extension of credit or services at point of sale”from an US based company, then this feature is not for you since every time you place and lift a freeze, you may incur a cost.
On the other hand, a security freeze does not impact any of the credit lines that are already open and it does not prevent your current lender from submitting information and accessing your report. You will be able to continue using your current credit cards and paying your student loan and mortgage without problems. All it does is close your information from any new third party. Therefore, as an added benefit, you may find that you are not getting as many unsolicited credit card offers as you used to!
Ready to pull the trigger? Before you place the freeze, make sure that you request the latest free annual reports and verify that all the information is correct. Once that is done, you will need to go to the dedicated website of each of the three credit bureaus, create an account, and follow their process to place the security freeze. It is not free, but the fee is uniform across all three bureaus because it is regulated at the state level. In most states, it is $10 to freeze the report in one bureau; and depending on your state of residence, it may be free or require a small charge to lift the freeze. (I know state of residence is an odd concept for us globetrotters, but it should be the one that is reported as your current address on your credit report, unless that is incorrect, then you need to correct it.) You will also need to mail in some kind of proof of identity, such as a driver’s license (that hopefully shows the same address as the one on the credit report.) Application fees and international postage may add up to be $50 or so for you to complete this task overseas; but compared to credit monitoring services that charge from $10 to $20 a month, I think it is a worthy investment.
Have you successfully placed a security freeze from overseas? Let me know your experience.