The Pros and Cons of Freezing Your Credit

Last year, more than sixteen million Americans had their personal information stolen and fraudulently used by thieves. Many consumers looking to be proactive against identity theft and fraud opt to place a freeze on their credit—a lock down of their credit report. A freeze will not lower your credit score. But is freezing your report worth the time and effort?

What does a credit report security freeze do?

A freeze places a restriction on your credit report and protects you against a thief opening an account in your name. Your credit report cannot be shared with potential creditors without your consent. Few businesses will open a credit account without first checking your credit history. If your credit files are frozen, even someone who had your name and Social Security number probably would not be able to obtain credit in your name.

While a credit freeze prevents new lines of credit, it doesn’t protect thieves from charging an existing line of credit, though, so you still want to monitor your credit activity.

How do I place a security freeze on my credit files?

Contact each of the credit freeze portals of (or call) the three major credit reporting agencies. You’ll need to provide your full name, address, Social Security number, date of birth and other personal information.

Equifax — 1-800-349-9960

Experian — 1‑888‑397‑3742

TransUnion — 1-888-909-8872

Is there a cost?

For now, it costs money to place or lift a freeze. Prices vary by state. The cost to put a freeze in place ranges between $10-$15, while the cost of unfreezing runs from free to $18. In Maryland, consumers currently may place a freeze on their credit reports from all three credit reporting agencies, free of charge.

New legislation by Congress will make credit freezes free in all states beginning in late September 2018.

How long will it take to initiate a security freeze?

DON’T BE FROZEN OUT
REMINDER FOR POTENTIAL
LOAN SHOPPERS

Lenders tend to pull reports from the three main credit bureaus when approving a buyer for a home loan, car loan or applying for a credit card.

To avoid hassles getting approved for a loan or refinance, remember to unfreeze your credit before applying for a loan.

The credit reporting agencies will send you a confirmation letter and a unique PIN or password to use when you want to permanently or temporarily remove your security freeze.

To initiate a freeze, it’s easier by phone rather than navigating the bureaus’ websites. You should be able to freeze your files with the three big bureaus in about 30 to 40 minutes.

How long does it take for a credit freeze to be lifted?

Credit bureaus can usually comply with an online or telephone request to lift a security freeze within 15 minutes. Credit bureaus have up to three business days to comply with a written request to lift a security freeze after they receive the request by mail.

Do I have to freeze my file with all three credit reporting agencies?

Yes. Different credit issuers may use different credit agencies. If you want to stop your credit file from being viewed, you must freeze it with Equifax, Experian and TransUnion.

Can I open new credit accounts if my files are frozen?

Yes. You’ll have to lift the freeze for a temporary period. Contact the credit agencies and provide your PIN or password.

Can anyone see my credit file if it is frozen?

Creditors who request to see your credit score while your file is frozen will get a message or code indicating the file is frozen.

When you have a security freeze on your credit file, certain entities will have access to it. Your credit report can still be released to your existing creditors or to collection agencies acting on their own behalf. They can use it to review or collect on your account. Other creditors may also use your information to make offers of credit.

Resources: The Federal Trade Commission, Money Talks News, CreditCards.com, The Balance