What is a credit freeze? It’s an action you take to lock down your credit report. A lender can’t see your score, which means your Social Security number and credit rating is useless to them. In other words, they can’t tell if you are risky or not.
When an identity thief can access your ID aka Social Security number, they can also create credit in your name. However, if your credit file is frozen, the bad guys can’t access it any longer. With a credit freeze, your credit file is inaccessible.
To get access to your frozen credit, when you need to new line of credit, you have to use a credit bureau issued PIN to unlock or unfreeze it. It’s easy. Freezing a credit report doesn’t affect any existing lines of credit, and the process is free for those who are victims of identity theft. For almost a decade, the big three credit bureaus, Experian, Trans Union, and Equifax, allow non-victims to pay a small charge and also get their credit frozen.
When is it a Good Idea to Freeze Your Credit?
If you are a person who has had their identity stolen, you should freeze your credit. If you have a Social Security number you are a target. If you breathe you are a potential victim. Make your SSN useless to the thief by freezing your credit
What You Should Know Before Freezing Your Credit
Before you freeze your credit, there isn’t much to know. You should simply do it. Your credit should always be frozen from all transactions, and retailers, banks, and lenders have spent many millions trying to stop it. Why? Because this stops them from instantly approving a credit line. They are not concerned about your identity, only their bottom line.
What does it Cost to Freeze your Credit?
The fee for freezing your credit varies based on the credit bureau. It might be free or there might be a small fee. The state Attorney General determines the rate. You must pay a $5.00 fee to lift the freeze.
Is Freezing Your Credit Inconvenient?
Freezing your credit is not an inconvenience. It only takes a couple of minutes to freeze and unfreeze your credit file. Of course, you need to unfreeze before getting approved for credit. That simply means prior to initiating an application for credit, you need to spend 5 minutes administrating the thaw. This boils down to a simple change in the current process which makes you more secure. Think of a freeze as putting on your seatbelt. It’s just something you have to do.
Does a Credit Freeze Harm Your Credit?
Nope. It doesn’t affect your credit score at all. And exiting creditors can still do “soft” checks on your credit.
Doesn’t a Fraud Alert Do the Same Thing?
A fraud alert only lasts for 90 days, and the bad guys can still access your credit file and apply for new credit. This informs a creditor that you might have had your ID stolen, but they can still, and do, issue credit. At their best, fraud alerts simply notify lenders that something might be going on with your identity. It’s really just a false sense of security.
Where You Can Go to Freeze Your Credit:
To freeze your credit with Equifax, click here.
To freeze your credit with Experian, click here.
To freeze your credit with Trans Union, click here.
Robert Siciliano personal security and identity theft expert and speaker is the author of 99 Things You Wish You Knew Before Your Identity Was Stolen. See him knock’em dead in this identity theft prevention video.