You already know that your business is always at risk of a data security breach, and you’ve taken all appropriate precautions. Your personal information is as vulnerable, if not more so. If either your business or your personal accounts are hacked, it can wreak havoc on your finances in both realms.
If you’re a small business owner, oftentimes you are the business, meaning your business and personal bank accounts are one and the same. That also means that credit is shared, so when your credit score gets hurt by identity theft, it’s much harder to get the money that your business needs to conduct operations like process payroll, purchase inventory, and generally stay afloat. As the face of a company, you’re also a bigger-than-average target for criminals who assume — rightly or wrongly — that you have lots of money.
We’ve discussed the steps for recovering your business operations after a breach, but there’s something else you can do to protect yourself: lock your credit file.
A Credit Cold Front
One reason that thieves steal your identity is to leverage your good credit rating to open up new credit cards as you and then make purchases that you will have to pay for. But as you know, any time you apply for a new credit card — or a mortgage, or a loan — the lender runs a credit check on you. Locking your credit file prevents anyone from running a credit check, meaning that the thief will be denied opening that credit card, mortgage, or loan.
A credit lock is similar to a credit freeze. Both prevent companies from accessing your credit file in order to approve a new account. A lock takes effect more immediately than a freeze, however, and it’s easier to lock and unlock than to freeze and unfreeze your file.
Because of recent high-profile credit bureau breaches, a new law mandates credit bureaus to offer credit freezing without fees. There are also more consumer protections in place with a freeze. The credit lock is often easier, however, because it is essentially a subscription service. Whichever you use, it’s smart to take action immediately.
An Extra Layer of Protection
In addition to freezing your credit when your business or a business you patronize has been the victim of a data breach, you can also proactively purchase identity theft protection services. These services range in price and scope, but for about $25 a month, you can typically cover your whole family. In most cases, the service provider agrees to cover the costs of undoing the damage from identity theft up to a certain amount (often a nice, around $1 million), giving you the peace of mind that you won’t be responsible for huge credit repair charges.
While these companies can take some defensive measures, they aren’t exactly in the business of identity theft protection. Instead, they monitor for threats by keeping an eye on your credit and combing the dark web to make sure that your sensitive information isn’t for sale — sort of like an insurance policy for your data. Because there’s a lot riding on your identity, including your family’s well-being, the reputation of your business, and your financial future, I personally think that it’s money well spent.
The risk of identity theft is ever-present. Hackers target the e-commerce websites you frequent, your favorite big-box retailers, and even your bank or credit unions. Locking your personal credit file, purchasing identity theft protection, and shoring up your business’s cybersecurity are all ways to lower the odds that you’ll be hacked and to minimize the damage if you are.