Identity thieves can do all sorts of devious things with your personal information — open a new credit card in your name, steal your tax refund, or even get medical care with your health insurance.
As hard as you try, there's nothing you can do to prevent your personal information from being compromised. Nearly 180 million personal records were lost or stolen last year, according to the non-profit Identity Theft Resource Center.
You can stop a thief from using that stolen information to open new financial accounts in your name. To do that, you simply put a "security freeze" on your credit file at the three big credit reporting agencies: Equifax, Experian and TransUnion.
Most creditors will not issue credit without checking your credit score. A security freeze prevents them from accessing your file or generating a credit score based on that file.
That's why U.S. PIRG (Public Interest Research Group) now advises everyone to put freezes on their accounts, even if they haven't had their sensitive personal information stolen.
"This is the only way to prevent new account identity theft, where someone opens a new account in your name," said Mike Litt, PIRG's consumer program advocate. "If the bad guys gets your Social Security number and tries to open a new account, they won't be able to if the account is frozen."
A PIRG report notes that credit monitoring and other services that are usually offered to data breach victims "do nothing to prevent identity theft; they only detect certain types of fraud after it has occurred." Javelin Strategy & Research, a well-respected security company that tracks identity theft, also recommends a proactive freeze.
Al Pascual, Javelin's head of fraud and security, told NBC News he was apprehensive about suggesting this in the past, because of "unintended consequences." But with new account financial fraud on the rise, he now believes the benefits outweigh the trouble.
Javelin's recently released 2016 Identity Fraud Report found that criminals, awash in stolen Social Security numbers, are switching their tactics — opening new accounts rather than using existing ones. The Javelin study found that new account fraud increased 113 percent in the last year. It now accounts for 20 percent of all fraud losses.
"Now is the time for consumers to take advantage of the freeze because their risk of being victims of serious identity fraud is growing by the day," Pascual said.
It won't stop all identity theft
Rod Griffin, director of public education at Experian, worries that people who use a security freeze will get a false sense of security.
"It's presented as a universal solution and everyone should do it, when in fact it's just not suited for everyone," Griffin told NBC News. "Freezing a credit file does not provide universal protection against identity theft."
For instance, if a crook steals your credit or debit card number, they can still use it until the fraud is spotted and the account is closed. They could also use your Social Security number to get a driver's license or file a fake tax return in your name — a huge problem this time of year.
Denise Norgle, a vice president at TransUnion, calls the security freeze "a drastic solution," but in an email to NBC News she agreed that it "can prevent a credit report from being released in response to a new credit application." Norgle noted that a fraud alert is "a good alternative" for many people.
A fraud alert tells potential creditors to contact you before granting credit, but they don't always do that. And Adam Levin, CEO of Identity Theft 911 and author of the book "Swiped," says so many accounts now have fraud alerts on them that they've become like "white noise."
"A lot of lenders, regardless of what they're supposed to do, don't take the time to check," Levin said. "A credit freeze isn't a silver bullet, but it's certainly better than a fraud alert."
The nuts and bolts of a freeze
A credit freeze is free for victims of identity theft who've filed police reports. Otherwise there's a small charge ($3-$10) at each of the three bureaus. It varies by state. Freezes are free in some states and there are often senior discounts available.
You'll pay that fee again if you need to "thaw" or unfreeze the account to allow a potential creditor to access your file. So, if you're getting ready to do something that requires a credit check — auto or home loan, mortgage refinance, new credit card or bank account, insurance policy, utility service or apartment rental — you'd probably want to wait until after you've applied.
"It can be a little cumbersome, which is why a freeze is not for everyone," Levin said. "The question is, would you rather be inconvenienced a little bit, but have greater protection? Sometimes greater security requires a little more effort."
Remember: a freeze locks everyone out of your credit file — even you. It does not stop those who already have legitimate access to it, such as companies you already do businesses with.
You can unfreeze the account online. In most cases, the thaw happens immediately. But you'll need to use the PIN you were issued when you placed the freeze.
"If you lose it or forget that PIN, the process is extremely cumbersome," said Eva Casey Velasquez, president and CEO of the Identity Theft Resource Center. "We've had people call us in tears, just trying to get their credit unfrozen because they're refinancing their house and they froze it five years ago and forgot about it."
Despite this caution, Velasquez believes a freeze can make sense for people who understand how it works and what it does and does not do.
"Credit freezes are the most robust credit protection option available," she said. "This is the most proactive tool there is to thwart new financial account identity theft."
Other things you should do
It's important to monitor your financial accounts to look for signs of fraud, even if you do put a freeze on your credit files.
Watch your credit score. You may get a free credit score from you bank or credit card company, or one of the websites that now offer this service. If your score suddenly drops for no apparent reason, check it out.
Get a free copy of your credit reports every 12 months at AnnualCreditReport.com. Look for anything that doesn't seem right — address changes, new accounts that you didn't open or collection notices you never received.