How to Freeze Your Credit

One of the best things you can do to help protect yourself from some forms of identity theft is to put a credit freeze on your credit report at each of the three major credit reporting agencies.

Having a credit freeze on your credit reports at the three major agencies — Equifax, Experian, and TransUnion — can help prevent identity thieves from accessing your credit reports in order to open new accounts, access credit, or make major purchases in your name, even if they have your Social Security number and other personal information.

What is a credit freeze?

A credit freeze is a freezing of your credit report at your request. That means no one can gain access to your credit report even if they have your Social Security number and other personal information about you.

A credit freeze allows you to control access to your credit reports through a special PIN or password. So, even if someone has your Social Security number, they could not use that information to establish new lines of credit or to make purchases on credit in your name.

This is important because, before opening new accounts, most companies will do a credit check of the applicant. With a credit freeze in place, a credit check can’t be done. As a result, an identity thief will be prevented from opening new accounts using your personal information.

Unfreezing your credit

Once you’ve frozen your credit, there may be times when you want to unfreeze it. That might include when you apply for a job (in some states), an auto loan, a mortgage, or take any other action where there is a legitimate need for a business to review your credit history.

This is easy to do by using the PIN you were assigned by each of the three major credit bureaus when you froze your credit report. Then, after your new credit has been established, you can freeze your credit report again using the same PIN.

Worth noting: When you unfreeze your credit report, you can indicate that you want your credit report to be frozen again after a specific period of time.

What does it cost?

The cost of freezing and unfreezing your credit reports became free on September 21, 2018. That’s when the Economic Growth, Regulatory Relief, and Consumer Protection Act became federal law. The law allows consumers to freeze and unfreeze their credit reports for free at any time.

A bit of background: Prior to that date, the cost of freezing and unfreezing your credit at each of the three credit reporting agencies was determined by state laws.

When should I use a credit freeze?

It's a good idea to consider a credit freeze in a few situations, including these.

• You’ve been the victim of a data breach. If your personally identifiable information has been exposed, cybercriminals could try to open new accounts in your name. A credit freeze can provide an extra layer of protection. Lenders won’t be able to access your credit file, making it unlikely that they’ll grant credit to anyone using your Social Security number.
• You believe you’ve been the victim of identity theft. You may start receiving bills for accounts you don’t recognize. Or you may receive calls from collection agencies seeking payment on accounts you never opened. These are likely signals that you might be the victim of identity theft. A credit freeze could help prevent criminals from opening more accounts using your personal information.
• You want to protect against identity theft for a child. A provision of the Economic Growth, Regulatory Relief and Consumer Protection Act authorizes parents or guardians of children under 16 to set up a credit report for their child and then freeze it at no cost. This can help you protect against child identity theft.

How do I freeze my credit?

There’s a specific process for freezing your credit report. Here are the steps.

Step 1. Contact the three major credit bureaus

You’ll need to make a request to freeze your credit report at each of the major credit bureaus — Equifax, Experian, and TransUnion. Each bureau offers information about how to go about the process. You can freeze access to your credit report online, by phone, or by mail.

Step 2. Provide your personal information

To freeze your credit report, you’ll need to supply information that includes your full name, address, date of birth, and Social Security number.

Step 3. Receive a PIN to manage your freeze

Each credit agency will give you a personal identification number (PIN) or password after it receives your request for a credit freeze. You’ll need that information to unfreeze your credit. Be sure to keep that information in a safe place.

Step 4. Manage your credit freeze

How long does it take to freeze your credit? According to federal law, if you request a credit freeze online or by phone, the credit agency must place the freeze within one business day. When you’re ready to lift a freeze, the agency must lift it within one hour of your request.
You can request or lift a credit freeze by mail. In that case, the credit agency must place or lift the freeze within three business days after it receives your request.

Pros and cons of a credit freeze

Credit freezes have advantages and disadvantages. Here’s a sample of each.

Credit Freeze Pros and Cons

 

Credit freeze alternatives

There are a few alternatives to credit freezes, including these.

Credit lock

A credit freeze at each of the three major credit reporting agencies can help protect you from many forms of identity theft. But credit agencies may recommend a “credit lock” instead of a credit freeze to protect your data. Credit agencies may tout credit locks as being more convenient. Sometimes they’re tied to other services.

A credit lock is not the same thing as a credit freeze. Credit freezes are governed by laws that protect you. Credit locks are creations of the credit reporting agencies. A credit lock is tied to a contract between the credit bureau and you. The bureau can change the contract at will. In addition, you may not desire or need the extra services that may be tied to the credit lock.

Credit monitoring services

Credit monitoring services may be helpful. They may be able to inform you of suspected identity theft promptly. No credit monitoring service can prevent all identity theft. Credit monitoring is a service that can be helpful, but it’s not a substitute for credit freezes.

Fraud alerts

The credit reporting bureaus sometimes advise you to put a fraud alert on your credit reports if you think you are in danger of identity theft. A fraud alert allows creditors to obtain a copy of your credit report as long as they take steps to verify your identity, according the FTC.

What’s the penalty if a company fails to contact you before granting someone credit if you have a fraud alert on your credit report? There is no penalty.

What’s more, with a fraud alert in place, credit reporting agencies can continue to sell your information. If you have a credit freeze in place, they cannot sell your information.

Identity theft protections services

In general, an identity theft protection service provides its customers with more than credit monitoring services.

For instance, a free credit monitoring service may point out that there is activity on your credit report. In contrast, an identity theft protection service may do more by monitoring for suspicious or fraudulent activity involving your identity via bank accounts, criminal databases, and other places your Social Security number is used.

If your identity is stolen, an identity theft protection service sometimes helps fix the problem. What’s more, an identity theft protection service may alert you if your personal information is spotted on the dark web because an identity thief is selling it.

Bottom line? While nothing can protect you against all forms of identity theft, credit freezes can help. And since they’re free, they won’t hurt your wallet.