Interest in credit freezing has increased following the Equifax data breach in 2017. A credit freeze can prevent a thief from using your personal data to open a fraudulent loan, but it will not stop someone from misusing your data for other purposes, such as filing a fake tax return, insurance fraud, or using a stolen credit card to make purchases.
WHAT IS A CREDIT FREEZE?
A credit freeze restricts creditors from accessing your credit report, which prevents both legitimate and fraudulent loans and accounts from being opened in your name. The primary benefit is obvious: a credit freeze is a safety precaution that can block a credit thief from taking out credit in your name.
A credit freeze does not impact your credit score, and you can still obtain a free annual credit report from each credit bureau. Your existing creditors, as well as some government agencies in specific situations, will also have continued access to your credit report.
Here are some things you should know before proceeding with a credit freeze.
FREEZING TIMES THREE
You must contact each of the nationwide credit bureaus to institute a freeze. If you do not place a freeze at each bureau, you are not protected.
- Experian: 888.397.3742, experian.com
- Equifax: 800.349.9960, equifax.com
- TransUnion: 888.909.8872, transunion.com
PIN SECURITY
Each bureau will provide you with a PIN that you’ll need in order to remove or temporarily lift the freeze. Make sure to store the PINs in a secure location.
FREEZE COSTS
There is a cost to most individuals for starting, temporarily lifting, and removing a freeze. Costs vary by state, ranging up to $10 in New Mexico and California.
WHEN DO YOU NEED TO LIFT YOUR CREDIT FREEZE?
You’ll need to lift the freeze if you are applying for a loan, including a credit card. You may also need to lift the freeze in other situations, such as when you apply for a new job or an apartment.
Let the lender, employer, or other entity know you’ll need to lift a freeze; if they plan to contact only one of the bureaus, you can save some money by lifting the freeze only where necessary. Failing to request a lift can significantly lengthen the time it takes to get approved for a loan, and you may incur additional fees if the lender charges for your credit check.
For more information, visit the Consumer Financial Protection Bureau website at consumerfinance.gov and search for “credit freeze.”
