The term credit freeze is becoming more well known thanks to the Equifax data breach earlier this year, but it can still be a little confusing to sift through all the information. As you probably know, Equifax is one of the nation’s three major credit reporting agencies. The other two agencies are Experian and TransUnion.
The Equifax data breach occurred in May 2017 and lasted through July 2017. Data accessed includes our names, social security numbers, birth dates, addresses, and possibly even driver’s license numbers and credit card numbers. That’s just fantastic isn’t it?
We were victims of a data breach on a much smaller scale several years ago. We had the joy of learning about credit freezes back then, and we have had credit freezes in place since 2013. The process seems easier now than it was when we first signed up. Here are some key details that you need to know.
What is a credit freeze?
A credit freeze is also called a security freeze, and it freezes access to your credit file. It prevents anyone but you from viewing your credit report. A credit freeze is designed to prevent credit from being opened in your name without your consent. It also prevents YOU from opening new credit until you lift the freeze, but it’s a simple process. Since lenders can’t access a frozen credit report, credit applications should be declined.
What is the cost for a credit freeze?
The cost varies by state, but the fees range from $3 to $15 each. (It’s $5 in Ohio for my local folks!) The fee may be waived if you are the victim of Identity theft. Of course, you have to take time and effort to provide documentation of the identity theft to qualify for a free credit freeze. To view state specific information, visit these pages at Experian, Equifax, and TransUnion.
How do I sign up for a credit freeze?
You need to contact each of the three major credit reporting companies separately to place a freeze with each of them. After receiving your freeze request, each credit reporting company will send you a confirmation letter containing a unique PIN (personal identification number) or password. Keep the PIN or password in a safe place. You will need it when you choose to lift the freeze.
- Place a Security Freeze online
- Call 1-800-685-1111
In addition to the standard security freeze option, TransUnion is now also offering a free service called TrueIdentity that gives you the control to “lock” or “unlock” access to your credit in realtime with no fees. The service will also alert you to changes in your credit information. According to their website, the main difference appears to be control. Either you control it with a “Lock” through the TrueIdentity service, or they control it with a “Freeze” through the standard credit freeze process. TrueIdentity sounds pretty awesome, and I might consider it if I didn’t already have a credit freeze in place. Take a look and see what works best for you.
Does a credit freeze protect my current accounts?
NO! A credit freeze will prevent NEW accounts from being opened using your information, but it will not stop someone from using your existing card numbers if those happen to be compromised. You should always keep a close eye on your checking and credit card accounts to look for transactions you don’t recognize. Many credit card issuers have great fraud identification built in, but don’t leave it up to them. Watch your accounts closely.
Can I still access my own credit report?
Yes. You can check your credit reports for free once a year by visiting AnnualCreditReport.com. I downloaded all three of my credit reports last month before I even knew about the breach. It was a fairly simply process, but you do have to go through steps for EACH credit bureau, and you have to answer security questions to prove your identity. Take your time and answer these questions carefully. If you answer wrong, it is a much more cumbersome process to get your own information.
How do I apply for new credit with a freeze in place?
In most cases, a security freeze remains on your credit file until you remove it. In a few states, credit freezes expire after seven years.
You will have to contact each of the three credit reporting agencies again to temporarily or permanently remove your credit freeze. When you “lift” your security freeze, you can allow access to your credit file for a specific company or you can request a complete lift of the freeze for a specified time period. You may be subject to a fee EACH time you request a temporary lift of your credit freeze.
Typically your credit file can be unfrozen within a matter of minutes, but must be completed within three business days. Again, each state has its own laws and procedures. To be on the safe side, plan ahead and allow up to three days for your credit history to be thawed before attempting to use it.
Are there any reasons NOT to freeze your credit?
Of course it depends on who you ask, but most of the resources just site cost and inconvenience as reasons to avoid a credit freeze. Paying $15 (in Ohio) to lock down my credit seems worth the investment to prevent potential issues. I’d rather spend the money now than try to fix a problem later.
We’ve had a credit freeze with all three agencies for 4 years now, and it hasn’t been that much of a problem. It actually helped us avoid the allure of “same as cash” financing on things that we couldn’t really afford. This year when I wanted to apply for new credit cards for balance transfers and cash rewards, I just lifted our freezes for two weeks and completed the applications in that time period. The freezes automatically went back into effect at the end of the two weeks.
If you decide not to place a security freeze on your credit reports, you can still place a fraud alert in your credit file to warn creditors that you may be an identity theft victim.
What else can you do?
Check out IdentityTheft.gov for even more tips on how to protect yourself if your information is lost or stolen. This site is run by the Federal Trade Commission, so they aren’t trying to profit from the information provided.
Stay on top of your finances and communicate frequently with your joint account holders. If you spot a fraudulent charge, report it immediately to limit your exposure.
What advice do you have for the rest of us?
Have I missed anything? Do you have experience with credit freezes? Have you been affected by a data breach or been a victim of identity theft? Share your advice for others in the comments.