If you’re worried about a data breach or identity theft, freezing your credit will protect you. The FTC received 4.8 million fraudulent or identity theft reports in 2020. With this statistic, safeguarding your credit report is more critical than ever.
Read on to learn more about how to freeze credit and how it could benefit you.
What is a Credit Freeze?
When identity thieves try to open new accounts in other people’s names, a creditor will look at a credit report before approving the new account. A credit freeze keeps credit bureau companies from sharing your data with anyone.
Customers typically request a credit freeze, also known as a security freeze, when they believe they’re at risk for identity theft, particularly during a data breach when hackers steal social security numbers. Creditors and other parties can’t see your credit information, so they won’t approve the new account.
When someone places a credit freeze on their account, all three credit bureaus must follow the action at no cost to the customer.
Pros and Cons of Freezing Your Credit
Freezing your credit will protect you from fraudulent transactions under your name. But it doesn’t protect you from identity theft itself. Consider the advantages and disadvantages of freezing credit before going ahead with it.
Credit Freeze Advantages
Freezing your credit is free and will keep your mind at ease, knowing no one can view your file. Another benefit some may enjoy is that it takes about 20 minutes to unfreeze credit over the phone, meaning you’ll be less tempted to apply for new credit without really thinking things through.
These are the significant advantages of freezing credit:
- A credit freeze will lessen the chance of a fraudulent transaction in your name.
- Freezing credit does not affect your credit score.
- You can use your current accounts while freezing credit.
- A freeze doesn’t expire until you decide to lift the freeze.
- Your credit report remains secure and untouchable by third parties.
Credit Freeze Disadvantages
Freezing your credit is an easy and beneficial thing to do to protect your information. But there are reasons to consider not going ahead with the freeze. It’s a tedious process, so it’s up to you to decide if it’s worth the effort.
Consider these drawbacks before freezing your credit:
- A freeze can’t guarantee your information is safe from theft.
- You need to call each credit agency (Experian, Equifax, and TransUnion) or use their online system to freeze and unfreeze your credit. The process can take up to 20 minutes (and longer).
- If you plan on opening a new credit account, you need to remember to call each agency to request a temporary lift on your freeze.
How to Freeze Credit
If you decide that a credit freeze is the best path forward for your needs, you’ll have to contact each credit bureau. You can either call each agency or complete your freeze online. Freezing your credit online is a smoother process, but doing it over the phone is just as effective.
Contact each of the three credit reporting bureaus to freeze credit:
- Experian: Freeze accounts online or call 1-888-397-3742
- Equifax: Freeze credit online or call 1-800-685-1111
- TransUnion: Freeze your reports online or call 1-888-909-8872
Whether you call each agency or do it yourself online, the process will be the same. When you begin making the request, the agencies will ask you to verify your identity. You’ll need to provide your full name, birthday, address, and social security number, and potentially other items.
Upon verification, they will each assign you a PIN to safeguard. This PIN lets you temporarily or permanently unfreeze your credit account.
How to Unfreeze a Credit Report
Unfreezing your credit is a similar process to freezing it. With your PIN handy, call each bureau or head online. Enter your PIN and fill out the information about whether you want to unfreeze your account temporarily or lift it altogether.
You don’t need to unfreeze your credit with every bureau. Suppose you’re applying for a mortgage that will contact Experian for your credit report. In that case, you don’t need to unfreeze your account with TransUnion or Equifax for the lender or creditor to get your information from Experian.
Alternatives to Freezing Credit
If you’re not quite set on freezing your credit, there are alternative ways to keep your information secure from identity thieves. You can also consider the following actions in addition to a credit freeze for the most protection possible.
Use Secure and Unique Passwords on All Digital Accounts
Whether it’s a social media account or your bank account, never use the same password across multiple digital accounts. Use secure passwords that no one could guess from your basic information. Store your passwords in a safe place. A digital password manager is useful since we all have dozens of passwords to remember these days. These managers can also generate strong passwords for you.
Use these tips to create a strong password:
Don’t use personal information someone can glean from a simple search.
- Make sure your passwords are at least six characters long.
- Include uppercase and lowercase letters, numbers, and symbols (if allowed).
- Make your password as random as possible.
Limit What You Share Online
Identity thieves can get your information from various sources, including your social media. Don’t overshare your information that could lead to figuring out passwords or security questions on multiple websites.
What About My Child’s Credit?
Do you worry about someone stealing your child’s credit information? A 2017 report by Javelin Strategy found that over one million minors became victims of identity fraud, so it’s more important than ever to protect your child’s credit.
Fortunately, legislation that went into effect in 2018 allows legal guardians to freeze their children’s credit, including minors in foster care. Using the free service for your children will protect their information and avoid future problems if they become victims of identity theft.
Consider placing a freeze on your child’s credit before identity theft happens. Freezing it now will avoid future headaches. It’s also a great learning opportunity for your child to learn more about credit and why it’s crucial to protect it.