Freezing Your Credit: What You Need to Know

A credit freeze is a way to protect yourself from a new account or loan being opened with your personal information by businesses (or criminals) without your permission. With a credit freeze the process of accessing your credit information from the credit reporting agencies is blocked. Freezing your credit at the three major credit reporting agencies is now free, thanks to a new Federal Law signed in September 2018.

In order for a credit freeze to be effective, it must be done at all three agencies; Experian, TransUnion, and Equifax. Here’s what you need to know if you’re considering freezing your credit:

• A credit freeze blocks lenders from opening accounts with your information because they’re unable to access your credit report.
• Your credit can be frozen and ‘unthawed’ when you want to apply for credit through using an assigned PIN or logging into your account at the agency to allow a credit report to be accessed. In most instances, the reporting agency will lift the thaw within one hour when you contact them by phone.
• You can freeze your child’s credit for free if they’re under age 16. If your child is over age 16 they must do it themselves. Why freeze a child’s credit? Children’s social security numbers are used for education and medical records and tax filing, making them at risk for identity theft if a data breach occurs or their personal information is compromised.

According to data from the 2018 Identity Fraud Study, the number of identity theft victims in the U.S. rose to 16.7 million in 2017, and over 1 million of those victims were children.

Along with a credit freeze, you can sign up for free one-year fraud alerts from all agencies; active military receives free fraud alerts during their entire deployment regardless of the length of time.

Individuals that have had their identity compromised are entitled to seven years of free fraud alerts when they freeze their credit, but must provide reporting documentation of the crime.

You may want to freeze your credit at all three agencies and order your credit report at the same time to check that the information is accurate. Protecting your identity and preventing fraud using your personal information is as critical to your financial success as managing your credit.