By Harriet McLeod

CHARLESTON, South Carolina (Reuters) - The number of South Carolina taxpayers who had their Social Security numbers hacked from state computers has risen to 3.8 million, about 5 percent higher than previously reported, a government spokesman said on Wednesday.

The state Department of Revenue also said tax records from up to 657,000 businesses and companies who have filed a state return since 1998 were exposed in the breach of its computers, which was first disclosed publicly by Governor Nikki Haley on October 26.

The department had put the number of taxpayers who had records compromised at 3.6 million but raised the total as part of an investigation that includes state police.

"That's the final tally for now. The investigation is still ongoing," said Samantha Cheek, the department's spokeswoman. She declined to comment on leads or a suspect for the breach.

Investigators discovered attempts to probe the tax agency's computers in August and September, when the hacker, using a foreign Internet protocol address, obtained data for the first time using.

Officials have said the weak spot in the agency's system was closed on October 20 and it is now believed to be secure.

Verenda Smith, deputy director of the Federation of Tax Administrators in Washington, said other states were "alarmed" by the breach and were reviewing their cyber protection.

"There's never been anything like this in a tax agency, in scope," she said.

Haley has said the state is offering residents free credit monitoring for a year through Experian and protection for life. The state agreed to pay up to $12 million for the service.

As of Wednesday morning, the Experian call center for the program had received about 729,000 calls and about 693,000 sign-ups.

Cheek said Dun & Bradstreet Credibility Corp, which helps companies monitor their credit status, would offer businesses free alerts on any credit changes at no cost to the state.

The state agency is now working to encrypt taxpayers' Social Security numbers, Cheek said.

(Reporting by Harriet McLeod, Editing by Ian Simpson and Paul Simao)