How Freezing Your Credit Report Can Protect You From Fraud

How Freezing Your Credit Report Can Protect You From Fraud

Kim Pinnelli

by Kim Pinnelli
Senior Contributing Writer

February 14, 2020
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How Freezing Your Credit Report Can Protect You From Fraud

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If you aren’t in the market for new credit, it may be a good idea to place a credit freeze.

Are you worried about thieves accessing your credit information? A credit freeze may help stop them in their tracks. This method restricts access to your credit report by anyone, including potential lenders.

When you want to apply for new credit, you’ll have to enter a secure PIN provided to you by the credit bureau. This PIN lifts the freeze temporarily. You choose the period the credit is unfrozen. It automatically refreezes after the time expires.

When you unfreeze your credit, creditors and lenders have access to your credit report. This puts you at risk of identity theft again, but only for a short amount of time. Typically, the credit bureaus respond to your request to freeze/unfreeze your credit report within a matter of hours when you request it online or over the phone. If you make the request via mail, it may take a few days.

Is Freezing Your Credit Report a Good Idea?

When you place a credit freeze, you are restricting access to your credit, reducing the risk of fraudulent activity on your credit file. It’s especially important for those that have already been a victim of identity or credit fraud.

How to Freeze Your Credit With Each Credit Bureau

Each credit bureau, Experian, TransUnion, and Equifax have a different procedure for freezing your credit, but all offer methods online, over the phone, and via mail:

Bureau Online Telephone Address
Experian Form 888-397-3742 P.O. Box 9554, Allen, TX 75013
TransUnion Form 888-909-8872 P.O. Box 2000, Chester, PA 19016
Equifax Form 800-349-9960 P.O. Box 105788, Atlanta, GA 30348

How to Lift a Credit Freeze

Before you lift a credit freeze, decide if you want a permanent or temporary lift. A permanent lift means you don’t have the protection any longer. A temporary lift means you give creditors a specific amount of time to check your credit, which is applicable when you are applying for new credit.

Fortunately, both lifts are free. You can freeze and unfreeze your credit as much as you need without the worry of cost.

Each bureau has its own procedures:

  • Experian – You can lift a credit freeze online, via phone or mail. In addition, Experian offers one-use PINs you can request for a single creditor. This doesn’t require you to unfreeze your credit but gives the appropriate company access to the necessary information.
  • Equifax – To lift a freeze with Equifax, you must create a myEquifax account online. You can then freeze and unfreeze your account as much as necessary.
  • TransUnion – TransUnion requires an online account to freeze and unfreeze your credit. They also offer the option to schedule a lift up to 15 days in advance.

The Downsides of Freezing Your Credit

While it may help to place a credit freeze, it does have its downsides:

  • It can provide a false sense of security – Placing a credit freeze doesn’t protect you from all identity theft and credit card hacking. Crooks have a variety of ways they can get to your information including stealing your credit card numbers and hacking into your bank account. A credit freeze is just one piece of the puzzle.
  • It’s inconvenient – When it’s you that’s applying for new credit, you’ll have to provide the PIN each time you want your credit pulled. You also have to know which bureau is being queried – for example, if you are shopping for a car, and the dealer asks to run your credit, they may not know which bureau their system runs your credit against, which will make supplying the correct PIN confusing.
  • Your insurance rates may increase – If you live in a state that allows insurance companies to pull your credit, you may lose out on the good credit score discount.

Does Freezing Your Credit Hurt Your Credit Score?

Essentially, freezing your credit doesn’t directly hurt your credit score. It doesn’t affect the score itself at all. Instead, it prevents future creditors from accessing your credit information, which in turn, could hurt your chances of taking on a new loan or credit card.

What is the Difference Between Locking and Freezing Your Credit?

A credit lock and credit freeze essentially do the same thing – restrict access to your credit report. A credit freeze, however, is more restrictive than a lock.

You should use a credit freeze if you’ve been a victim of identity theft or you think your information has been compromised. While it’s slightly inconvenient to enter the PIN every time you want to provide access to your information, it provides great protection from further identity theft.

A credit lock is a preventative measure that anyone can use. A credit lock isn’t governed by law, like the credit freeze. With a credit lock, though, you can instantly lock or unlock your credit via the bureau’s mobile app or online. Both Equifax and TransUnion offer a free credit lock service, whereas Experian charges between $9.99 and $19.99 per month.

Explore your options when deciding to place a credit freeze on your credit report. If you think you’ve been compromised or are at any risk, it’s always a good idea, especially since it’s free. Keep your PIN in a safe place and always check on your credit despite having the freeze.

It is recommended that you pull your own credit reports every few months. Each credit bureau provides free access once a year. If you pull a credit report every four months, you’ll cover the entire year. This gives you the chance to make sure everything on your account is accurate. If you notice errors or fraudulent activity, you can alert the credit bureaus right away and decide if a credit freeze or credit lock is the better choice.

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