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How To Freeze Your Credit

Freezing your credit, also known as a security freeze, keeps your private data from being utilized to open a new account in your name. It’s one of the best ways to fend off identity theft.

Freezing your credit is free to do and does not impact your credit score. It protects you from fraudulent credit applications, even if the criminal has all your sensitive data like your social security number and birth date. Putting a freeze on your credit will make it extremely hard for anyone but you to take out credit in your name.

How Does A Credit Freeze Work?

When you place a credit freeze on your account, it essentially blocks access to your credit reports. If someone goes to a bank or lender to apply for credit using your information, the creditor will not have the ability to see your data.

When you freeze your credit, you will need to do so at all three credit bureaus – Equifax, Experian, and Transunion. You will then be provided with a password or PIN to use if/when you’re ready to unfreeze your credit.

What Is A Credit Freeze?

When you freeze your credit, the three credit bureaus do not provide information to those making inquiries. Attempts to open a credit card, car loan, or anything else in your name will be thwarted.

In 2018, a new law passed that makes it free for you to freeze your credit as needed. Previously you needed to pay a $10 fee to each bureau. After the Equifax data breach in 2017, Congress was petitioned to allow free access for credit freezes – and the law passed.

How Do I Place A Credit Freeze?

If you’re ready to take the steps needed to freeze your credit file you will need to contact each of the credit bureaus individually. To reach them follow these instructions:

Each will provide you with the step-by-step instructions to freeze your account properly.

There are two lesser-known credit bureaus that might have your private information as well. You should also consider contacting them to freeze your credit.

For all five of the credit bureaus above, you will need to prove your identity. You can do so with your social security number, date of birth, and other qualifying questions. Once you have done so, your credit will be frozen until you decide lift the freeze – if ever. You will not have to continue to freeze your credit annually.

How Do I Lift A Credit Freeze?

If you requested a freeze on your account online, you can visit each of the credit bureaus links above and use the PIN or password you created. You can then walk through the steps to unfreeze your account. You can also call them over the phone or via postal mail to unfreeze your credit file. For all these contact methods, you will need to provide the PIN established when you initially froze your credit.

Both online and over the phone methods of unfreezing your account will take effect within minutes. If you unfreeze by sending the request via the post office, the timeline will be dependent upon delivery times of USPS.

To save time and a bit of a headache, if you are applying for credit you can ask the lender which credit bureau they use to verify your credit. You will then only need to unfreeze that bureau.

You also have the option to unfreeze your credit for a specified time period. Your credit will then automatically freeze after the time has lapsed.

When To Freeze Your Credit

Because it is free to freeze and unfreeze your credit, anytime you are not actively shopping for a loan or credit card is a great time to freeze your credit. It is a way to actively protect yourself from having your credit stolen or being compromised.

That being said, if your credit is not frozen, you should consider freezing your credit if your data has been compromised in a data breach or other event.

Is Freezing Your Credit A Good Idea?

Freezing your credit is a great idea to protect yourself from identity thieves. Unfortunately, we live in a world where identity theft is a regular occurrence. Thieves can easily open credit accounts in your name unless you have a credit freeze. This will prohibit the creditor from receiving your consumer credit report and all the data included. Without the information, lenders will not generally extend the line of credit to the person claiming to be you.

Does Freezing Your Credit Affect Your Credit Score?

The great news is that freezing your credit does not have any impact on your credit score! All your existing credit accounts will not be impacted.

Pros And Cons Of Freezing Your Credit

Now that your credit is free, it might seem like a no-brainer to go ahead and take action. However, it might be worth reviewing the pros and cons of freezing your credit to ensure it’s the best action for your personal needs.

Pros Of Freezing Your Credit

  • Freezing your credit reduces your risk of someone creating fraudulent credit accounts with your personal information
  • You will have peace of mind knowing your report is secure
  • Freezing your credit will not impact your credit score or the ability to use your existing accounts
  • It can easily be unfrozen to add new lines of credit
  • Freezing your credit can last indefinitely, so you won’t have to reach out to all the credit bureaus yearly

Cons Of Freezing Your Credit

  • Freezing your credit is not a perfect solution. While in most cases it will prevent identity theft, if a creditor does not run your credit you could still have credit ramifications
  • It takes time and effort to contact each of the credit bureaus to freeze and unfreeze your credit as needed
  • You cannot impulsively apply for credit and will need to plan ahead since you will have to request the temporary lift to unfreeze your credit

Bottom Line To Protect Your Credit

Freezing your credit is a fantastic solution, although not perfect, to protect yourself from identity theft. You can also protect yourself by using secure passwords on your banking and email accounts, making it harder to be hacked.

For a detailed list of ways to protect yourself, your credit, and your financial future, reach out to your financial advisor to ensure you are doing everything needed to protect your bottom line.