Credit freezes are intended to keep sensitive data from credit files from being accessed without consent from the individual in question. This in turn can have many benefits: it can help to prevent a credit score from being hurt by constant checking, and it can protect you against fraudulent credit applications. This way, even if someone should gain access to information such as your social security number and bank details, they still won’t be able to take out a loan in your name.
This is completely free to do, and it’s something that won’t affect your credit score in any way. So how do you go about freezing your credit score?
How it Works
Credit freezes protect the individual by blocking access to credit reports. This way, when someone applies for credit using your details, the lender won’t be able to get the information they need about you.
Usually, when you take out a loan, a creditor will need to research your credit history. This means they will examine your performance with previous loans – whether you have repaid the full amount on time, or whether you have defaulted. This information allows the lender to decide whether you are a good fit for your loan, and to adjust the price depending on how much of a risk you pose to them. The loan simply cannot be processed without this information!
Thus, when the lender performs the check and your credit is frozen, the fraudulent attempt will fail.
The great news is that it’s also easy to unfreeze your credit at any time.
How to Freeze and Unfreeze Your Credit
If you want to freeze your credit score, then you can simply contact each of the three major credit bureaus. These are Equifax, Experian, and TransUnion. Get in touch and they will freeze your individual credit account.
Equifax: Call 800-349-9960. You can also do this online.
Experian: Call 888-397-3742 or visit the website.
TransUnion: Call 888-909-8872 or freeze your credit through the website.
You’ll need to provide your Social Security number, your birthdate, and additional supporting information to demonstrate your identity.
Your credit freeze will then be enacted and will secure your file until you opt to lift the freeze. You can even keep your credit frozen and then only release it temporarily as you need new credit.
To unfreeze your credit, visit the bureau website and use the PIN or password you were given when you first froze your account. You can also do this by phone or snail mail. Make sure that you don’t lose these codes!
When you apply for credit, it is also possible to ask a single credit bureau to unfreeze your credit for a single check. If you intend on shopping around for loans online however, or if you have lots of loans/deals to take out, then you may need to contact all three and get them to lift the freeze indefinitely.
You can also choose to unfreeze for a set period, after which the freeze will resume automatically.
Who Should Freeze Their Credit?
While many people aren’t aware of the option, it’s actually wise for anyone not actively shopping for a credit card or loan to freeze their credit. This process is easy and free, and as it doesn’t negatively affect your score, there is really no reason not to consider doing so. Many of the biggest money blogs and gurus recommend the process.
The simple fact is that it is becoming more and more commonplace for our data to be compromised. Most of us won’t be wise to the fact that our information has been leaked until it is too late. By freezing your credit even when you don’t have reason to suspect a problem, you can take a proactive role in defending yourself.
This of course becomes all the more important if you think your data has been compromised in any way. If your Social Security number has been disclosed, or if you have lost personal documents. Likewise, if you have experienced previous fraud attempts.
Can Anyone Still Access Your Records?
When your credit is frozen, this will make your reports inaccessible to most people. That said, there are a few exceptions.
For instance, you will still be able to access your own records. That means you will also receive free annual credit reports, and still check your score online.
Existent creditors will still be able to access your score, as will debt collectors.
Marketers can see your scores in order to send offers.
You can also give specific permission to employers to check your score. The version they see will be limited.
Parents and guardians can freeze and unfreeze the credit of their children.
Finally, government or child support agencies can still see your score under certain circumstances.
Credit Freeze vs. Credit Lock
Credit freezes and credit locks both work by blocking access to credit reports. The difference is that a credit lock is a product that is offered by credit bureaus and incurs a fee. Freeze services are mandated by law and are free.
Usually, the main difference functionally is convenience. Often companies will offer a credit lock as simply as swiping on an app.
Are There Any Downsides?
While credit freezes offer many advantages, there are also potentially a couple of risks involved.
Freezes might for instance provide a false sense of security, when in fact you might still be vulnerable through other means.
This can also create complications when performing certain actions. For instance, if you want to make a mySocialSecurity online account, you will need to visit the Social Security office in person.
Insurance rates can increase if the state uses credit information to set its rates.
It can be a little inconvenient and cumbersome. When taking out new loans, you’ll need to go to the trouble of unfreezing your accounts, and that will involve speaking with each of the agencies independently. This is frustrating given that companies could provide the service much more easily if they weren’t trying to sell competing credit lock products.
That said, keep in mind just how much more inconvenient it is to deal with credit fraud! With that in mind, this is still something we recommend that everyone do.