Credit Freeze: Now is the Time

If you live in the US, there’s just no good reason why you shouldn’t freeze access to your credit report, right now. Here’s why and how.

credit freeze

Why Do I Need a Credit Freeze Now?

I wrote a blog about this years ago and I have been recommending it in my book and on my podcast for years, as well. Since that initial article, a couple key things have happened. First, there have been a lot more data breaches – very serious data breaches. (As always, you can check to see if your data was part of any of those breaches.) The recent massive AT&T data leak, which includes basically everything you’d need to open a credit card in someone’s name, is reason enough to lock down your credit report. It’s one of the only ways to guard against this sort of identity theft.

Second, when I first wrote that article, it cost a good bit of effort and even money to freeze and thaw your credit report. Starting in the Fall of 2018, the US passed a law to make this process free for all US citizens. And the credit bureaus have actually made it pretty easy to manage your credit freeze, including setting up a temporary thawing for a specified time period. This is very useful for the times when you actually need someone to pull your credit report. (It happens more often than you’d think and way more often than it should – see below.)

Beware the Bait and Switch

Credit reporting companies make money off your credit report, and if it’s frozen, that hurts their bottom line. When you go to the credit bureaus and try to freeze your credit, you will probably be offered something else called a credit lock. (Note that they may have slightly different marketing names for this service.) Freezes and locks are not the same. TransUnion and Experian will charge you a subscription fee for a lock. All of them will try to tell you why a lock is better, including faster locking and unlocking. Don’t be fooled. Credit monitoring is nice – and if you can get it for free, great. But it’s no replacement for a credit freeze.

A fraud alert is something you may want to consider, however – and this can be done independently from (and in addition to) a credit freeze. A fraud alert will require creditors to do more to verify identity before issuing a new line of credit (e.g., a loan or credit card). It’s free, anyone can ask for one, and it will last for a year – at which point you can renew it. If you are unfortunate enough to have been a victim of identity theft (and it’s documented), you can get an extended fraud alert which lasts 7 years and comes with other benefits. Military services members can also get an active duty fraud alert.

How to Freeze (and Thaw) Your Credit

I’m not going to go through all the steps – there are several excellent articles that explain the process very clearly and concisely. Here are a few of my favorites – pick one you like. Again, it’s free and easy to do – and it won’t affect your credit score.

The only real downside to freezing your credit is that you’ll have to thaw it when applying for a new credit card or loan. You may also need to thaw it for other weird things, like applying for a job, renting a home or apartment, or turning on new utility accounts. Note that you only need to thaw the report at the credit bureau that they will be querying – so ask them which one they use.

One painful aspect to freezing your credit is that you will need to do this with each credit reporting agency individually. There are three primary credit agencies: TransUnion, Experian and Equifax. You might also freeze your credit with Innovis (4th largest). And while you’re at it, you might want to consider opting out of The Work Number, which tracks income and employment history.

Finally, you may want to freeze the credit for minor children (identity theft can hit children, too) or elderly relatives.

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