Freezing your credit report is the catch-all last stop in security verification for credit. If you suspect your credit has been compromised by identity theft and you want to prevent anyone from fraudulently opening new accounts under your name, a freeze on your report is a great way to do it.
If you don’t think you’ve been a victim of identity theft, but you have been open to vulnerability due to the action of others or other entities, you may not have to go as far as a complete freeze on your credit report. Freezing your report can be cumbersome, inconvenient, and unnecessary if you’re just looking for added personal financial protection.
To initiate a credit report freeze, you’ll need to contact each of the three credit reporting agencies, Equifax, Experian, and Transunion, individually. Each agency will charge a nominal fee to initiate the freeze and it may take a few days to go into effect.
By instituting a freeze, you are essentially preventing any unknown person or entity from taking a peek into your creditworthiness. This means new lenders cannot check on your credit. Existing lenders and businesses, however, can. Collection agencies that are hired by existing lenders with whom you have an open line of credit can also look into your credit.
So while a credit freeze is a great way of preventing new, fraudulent lines of credit from being opened, people engaging in identity theft can still access your existing lines of credit if they have the right information. It is important to monitor your credit transactions and immediately report fraudulent activity to each of your lenders.
Purpose Of A Freeze
Those who are trying to acquire new lines of credit fraudulently under your name will not be able to do so, as long as you institute a freeze with each one of the three credit reporting agencies (aka credit bureaus). Each institution will require detailed information from you such as name, contact information, social security, etc. They may also require small fees, the exact amount of which varies from state to state.
Length Of Freeze
You can determine the length of time you want a freeze to be in place. You can also temporarily lift the freeze for a given period and reinstate it when you need to do so. Just keep in mind that each transaction has a lag time of a few days, so if you are lifting a freeze to apply for an auto loan, for example, make sure you lift it about a week before you apply for that loan.
Also, you will be assigned a PIN to use to access your credit. You can also place and remove freeze to your credit. This PIN only accesses your credit report. Your spouse or other family members must each conduct their own freezes to their credit report if they feel they are equally in jeopardy of identity theft.
Viewing Your Own Credit
Even with a freeze in place, you will be able to view your own credit. You will be able to access your credit report from each of the three bureaus whenever you need it, whether it’s to evaluate any peculiar activity or just to keep tabs on how your credit is faring. Other organizations that still have access to your credit besides current lenders are government organizations. Though this doesn’t occur often, government agencies such as the court system can look into your credit for necessary purposes, despite your placement of a freeze.
Initiating a freeze does not prevent you from conducting any of the normal business that involves your credit rating, such as opening a new account, leasing a residence, applying for a mortgage, interviewing with a company, etc. You just have to temporarily lift the freeze whenever you’re looking to conduct new business involving inquiries into your creditworthiness.
If you feel like a freeze is a bit more protection than what you’re looking for, consider placing a fraud alert on your credit profile. You can institute a free 90-day fraud alert that will require new businesses to verify your identity first before initiating a new line of credit. This will help deter identity thieves from taking advantage of any personal financial information they have on you. Modes of verification often involve email verification or via text messaged code to your mobile phone.
If 90 days isn’t long enough, you can also initiate an extended fraud alert that will last seven years. To place an alert, first, you will need to file an identity theft report. And then, contact one of the three credit bureaus: Experian, Equifax, or Transunion. Make sure that the credit agency you have contacted has informed the other two agencies as well.
Once you have completed the paperwork, your extended fraud alert will remain active for the next seven years. It works just like a 90-day alert. All new credit activity will have to be verified by you before it is allowed to proceed.
With either a freeze or a fraud alert, you will be able to receive at least one free copy of your credit report per year from one of the three credit bureaus. You will also have added protection and peace of mind from all the vulnerabilities you face as a consumer of our ever-growing e-commerce, digital society.
Peace Of Mind
Living in this day and age makes protecting your financial privacy an increasingly challenging task to accomplish. But thanks to added protections the credit reporting agencies are offering as a response to this increased risk, you can have some assurance that you may be able to fight the effects of identity theft if you stay vigilant and before they get out of hand.
Until you need to employ a fraud alert or a credit score freeze, make sure you monitor your credit on a regular basis by signing up for a credit monitoring service or obtaining a free credit report regularly. Knowing your credit is protected in the face of countless security vulnerabilities among major retailers and financial institutions will help you sleep more soundly at night.