Freezing your credit after the Equifax breach won't prevent the most common type of identity theft — here's what will

Wednesday is the last day to request a free credit freeze from Equifax.
A credit freeze protects against new accounts being opened in your name, which happens to 4% of identity-theft victims.
However, freezing your credit will not prevent the most common type of identity theft: misuse of current accounts.

After the Equifax breach, identity-theft horror stories have been easy to come by.

One solution, according to many experts, is freezing your credit — something hardly anyone has done.

Equifax offered consumers the option to freeze their credit for free in the wake of the massive hack, but that benefit will soon expire. Wednesday is the last day to request a free credit freeze from Equifax.

Freezing your credit protects against new accounts being opened in your name — one of the rarest types of identity theft out there, affecting only 4% of victims, according to the most recent Bureau of Justice Statistics data.

It's not because criminals haven't had access to Social Security numbers before.

A 2015 data breach at the health-insurance company Anthem exposed the personal information, including Social Security numbers, of 80 million people. A class-action lawsuit was settled this summer, awarding up to $50 to each person who was affected. Last year, 4.2 billion personal records were stolen. If someone wants your data, it's probably already out there.

The vast majority of identity theft victims — 86% in 2014 — have problems with a current account, such as a credit card of bank account, according to BJS data. Freezing your credit won't prevent that type of crime.

News coverage of the Equifax data breach made it seem as though half of Americans' financial future was over. Though there's a risk of identity theft for those affected, it's not a guarantee. And if it happens to you, your chances of buying a home or opening another credit card are not ruined forever.

"The good news is you know all of your own history, and this breach is so well-known and far-reaching that if you are a victim, it should be easier than usual to fight," Mark Nunnikhoven, the head of cloud research for the cybersecurity firm Trend Micro, told CNN.

Resolving credit issues is a headache — but not impossible

Even when missteps on your credit report are your own doing, resolving them can be easier than you think.

As a financial planner in New York City, I've helped multiple clients improve their credit scores, including one client whose score increased to the mid-700s from the low 500s in three months. It's not because I have the magic touch — it's just a matter of making calls and submitting documents until the issues are resolved. In some cases it takes longer, but even bankruptcy falls off your credit report eventually.

Victims of identity theft — who are more likely to be white and have annual incomes of over $75,000 — spent an average of seven hours resolving problems associated with the crime, according to the BJS. Since banks and credit-card companies typically reimburse people for unauthorized account use, only 14% of victims lost money. Among those who did, the median amount was $100.

Still, identity theft is a crime. Companies should have better cybersecurity in place, but even when large systems fail, there are ways you can protect your identity. The BJS found that 85% of Americans had already taken steps to prevent identity theft, including changing passwords and shredding documents with personal information.

Rather than stressing out over the Equifax breach, here's what you can do now to prevent headaches if your identity is stolen now or in the future.

Protect your credit and identity after the Equifax breach:

Monitor your current accounts daily or weekly.
File your taxes early.
cracking down on tax fraud
Use secure passwords and two-step verification.
Set up alerts for new credit activity.
Credit Karma
Credit Sesame
fraud alert or credit freeze
Check your credit reports regularly.
AnnualCreditReport.com
improve your credit score
fix any errors on your credit report
optimize your collection of credit cards
Choose identity-verification questions and answers carefully.

If you have been a victim of identity theft, the Federal Trade Commission has a .

Freezing your credit after the Equifax breach won't prevent the most common type of identity theft — here's what will

Resolving credit issues is a headache — but not impossible

Protect your credit and identity after the Equifax breach:

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