Properly Align Loans with Your Debt Payment Ratio: How Often Should I Check My Credit Report?

We recently have been discussing the debt payment ratio and various ways to improve upon your cash flow with the proper use of debt. When you take on new debt or restructure existing debt, part of the process will be a credit check. While great strides have been made in the arena of cybersecurity, any time your personal information exchanges hands creates an opportunity for fraud or identity theft. As a dentist, you are a particularly vulnerable target. Instances of cybercrime are increasing and it is one of the most underreported crimes in the world. In this article, we will look at some the trends in cybercrime, specific areas of vulnerability for dental practice owners and some simple steps you can take to decrease the likelihood of falling victim to it.

Identity Theft: Two of the biggest targets of identity theft are U.S. taxpayers and kids. Throughout tax season, a common fraud is to claim a refund on a victim’s Social Security number. Keep in mind that the IRS will not contact you by email, text or phone. They send letters, aside from in situations related to collection activities, where the IRS has started to use collection agencies.

Kids are victims of identity theft due to their perfectly clean and often unmonitored credit reports. It’s usually a bad sign if your child starts to receive credit offers. When checking your own credit report, also check your children’s credit reports. Teach your children to keep their Social Security number secret and consider freezing their credit files. Not every state currently allows children to freeze their credit (or for you to do it on their behalf). States highlighted in orange on the following map are those in which you can freeze a child’s credit:

Properly Align Loans with Your Debt Payment Ratio: How Often Should I Check My Credit Report?

Social Engineering:
 One of the primary ways fraudsters receive your personal information is from you. They use many tactics to achieve this end. Phishing, or fake emails that look official, are a common form of social engineering. Before clicking through an email, hover over the link to see the web address. If it is not official, do not click it. For emails from payment accounts (PayPal, Venmo, etc.) or banks/credit card companies, do not click through at all. Open a new window and navigate directly to their website.

For dentists, who have sensitive information and patient histories on their practice’s computer system, ransomware is a real threat. Ransomware is a downloaded virus that you have to pay the fraudster to remove. Often ransomware is introduced to a system through means of social engineering. These viruses lock out the end user from accessing any files, and victims usually have a time limit to pay before data is completely erased. Rarely is this software removable by any party aside from its creators. Hospitals and police departments have been targets of ransomware and have paid the ransom.

So, what can you do? Be cautious. Don’t download unknown or unneeded software. Use strong passwords (a mix of letters, numbers, capitalization and special characters). Check your credit report regularly and consider freezing your credit with the three major credit bureaus (you can unfreeze it when you need it). Also, freeze your children’s credit reports. For practice owners, keep a data back up and store it offline.

Freezing your credit report disables a creditor from accessing the information. It takes about 20 minutes to do across the three credit agencies and costs about $20. It is a very effective way to limit damage from any identity theft. Credit monitoring can also be effective. Credit monitoring provides real-time notification of changes to your credit score. While it is useful information, it is not as effective in terms of prevention as freezing your credit. Ideally, you would both freeze and monitor your credit.

You have the opportunity to retrieve one free credit report annually from each credit bureau. That means you have three free looks per year. It is good to time a check of your credit for the start of the year.

Credit protection services (like LifeLock) are best viewed from their value as identity theft insurance. By taking the above actions – freezing your credit, setting up credit monitoring, and checking your credit report regularly – you are accomplishing the vast majority of what a credit protection service would provide. Where these services provide additional value generally is with insurance in case of a credit breach. Consider the cost of the service in light of the value of the insurance you receive.

Dentists are high-income-earners, often have families, maintain medical records and are small business owners with complicated tax returns. All of these factors increase the likelihood of being a cybercrime target. Take the time to protect your data. Use security-scanning software regularly, encrypt your practice data and maintain an off-network back up. Take time to protect your identity. Freeze your and your family’s credit, only releasing it when you are proactively looking for financing.

Freeze your credit here:
Experian: www.experian.com/freeze
Transunion: www.freeze.transunion.com
Equifax: www.freeze.equifax.com

View your credit score (Experian): https://www.freecreditscore.com/
View your credit reports: www.annualcreditreport.com

This commentary originally appeared May 7 on DentalTown.com

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The opinions expressed by featured authors are their own and may not accurately reflect those of Buckingham Strategic Wealth. This article is for general information only and is not intended to serve as specific financial, accounting or tax advice.

© 2018, Buckingham Strategic Wealth®

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Thomas Bodin, CFA, CFP®

As a practice integration advisor, Thomas provides comprehensive financial advisory services to dental and medical offices, including tax, pension and retirement planning. He is motivated by a passion to help medical professionals connect the hard work they put into their practices with their most deeply held values and goals, all through Buckingham’s evidence-based approach to true wealth management.

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