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What to know about credit freezes and identity theft

Identity theft: It's not just a plot device in spy movies anymore; it's becoming a real threat for many of us. According to Javelin Strategy and Research, around 15.4 million Americans, or one in six adults, were the victims of some form of identity theft in 2016. That's the highest number ever recorded and represents billions of dollars worth of stolen credit card numbers, hacked bank accounts or hijacked cell phones.

Even if you follow all the best security rules, like using strong passwords and staying away from suspicious websites, there's a small chance that some kind of identity theft could wreak havoc on your finances. The good news is that if you know something has happened with your bank account or credit card, there are ways to control the damage and prevent it from happening again.

Knowing when to act

Identity theft and credit fraud happen more than you think, but in most cases, it's no big deal. Your bank and credit card company should stay on top of any suspicious activity on your account and alert you if there's been an incident. If your wallet gets stolen or a strange purchase shows up on your account, all it takes is a quick phone call to cancel the card and maybe change your password. After that, you're good to go.

But sometimes, something really bad can happen to your financial accounts without warning. If you get calls about credit cards you didn't open or someone else using your name to make purchases, you might have fallen victim to identity theft. In these and other cases, you might consider ordering a credit freeze.

A credit freeze is an order you can issue to stop any new forms of credit from being opened in your name. If you're confused, remember that before you can get approved for stuff like credit cards or car loans, you need to pass a credit check. That means lenders will ask a credit reporting agency for your credit history. When you order a freeze on your credit, no one can see your report until you lift the freeze, so it can stop most identity thieves in their tracks.

Do you need a freeze?

You are the only person who can place a freeze on your credit. If you decide it is necessary to do so, you need to call each of the three major credit agencies (Equifax, Experian and TransUnion) to order a freeze on each account you have with them. In most cases, you will pay a fee both to set up a credit freeze and to "thaw" your account to allow access.

Freezing your credit history should prevent anyone - including yourself - from opening new lines of credit, but it won't put the kibosh on any that were opened before starting the freeze. If you know a fraudulent account has been opened in your name, work with that lender or institution directly to close it.

We know it might be a lot to process, but it always pays to be prepared for the possibility of identity theft or credit fraud. Talk to your local Trustmark banking professionals to learn how you can protect your accounts.