Does the name "credit freeze" sound a little threatening? Don't worry. It's not about your bank or other lender freezing your access to credit, even though it might sound that way. It's a step you can take to protect your credit record. When you freeze your credit, you're doing what you need to do to prevent criminals — or anyone else — from accessing your credit. Here's everything you need to know about a credit freeze.
When you freeze your credit, you're restricting access to your credit record. Once you freeze your credit, identity thieves have a very difficult time stealing your identity and opening new accounts in your name. Your creditors also have no access to your credit report when it's frozen, so they're unlikely to extend new credit when the thief files those fraudulent applications.
Unfortunately, there's no one-size-fits-all website to let you freeze your credit record at all three credit bureaus at once. The three credit bureaus — Equifax, Experian, and TransUnion — have different processes for credit freezes, and you have to contact each of them online or by phone to handle the process.
You have to confirm your identity with each credit bureau to freeze your credit. This typically involves providing your whole Social Security number and your birth date. The credit bureaus may ask for other information as well. In addition, you may have to pay a small fee, generally around $10 — though the bureau may waive that fee in the event of unusual circumstances such as a data breach. Also, if you've been the victim of identity theft, your fee is typically waived.
When you freeze your credit, your credit record is locked. No one can authorize it except you. When you activate the freeze, the credit bureau sends you a PIN for access purposes. If you need to provide authorization, if you're applying for a new loan or a new credit card, for example, you can provide the PIN to the creditor so they can access your record. Make sure not to lose the PIN as you won't be able to unfreeze your account without it.
Your credit freeze only stops identity thieves from opening new accounts. It doesn't stop ordinary thieves from making fraudulent charges on credit accounts already in existence to try to steal money from you. Continue keeping an eye on your bank statements and credit card bills to spot any charges you don't recognize.
First of all, you have full access to your credit history at all three credit bureaus, even when your credit is frozen. Also, you are still entitled to a free credit report every year from each bureau. Finally, creditors with whom you already have a relationship can access your account. So can legitimate debt collectors.
It's your responsibility to lift the freeze with all three credit reporting agencies when you're applying for new credit. When you lift the freeze, be specific about whom you're lifting it for, or just lift it for a short time to ensure continued security. You can also ask your new creditor which credit bureau they want to use and just lift the freeze with that agency.
Freezing your credit record is a no-brainer if you're confronted with identity theft. It protects you from a lot of hassle and gives you real peace of mind. If you don't plan on opening any new credit accounts in the near future — such as buying a new car, moving to a new home, or refinancing your mortgage — a credit freeze shouldn't affect your day-to-day life at all. Keep in mind that if you have to co-sign leases or accounts for an adult child, the institution will run your credit, and you'll have to lift the freeze.
In three states — Kentucky, Pennsylvania, and South Dakota — your credit freeze is automatically lifted after seven years. In all other states, your credit freeze is permanent until you ask the credit bureau to lift. By the way, three states — Alabama, Michigan, and Missouri — have no laws governing credit freezes, but the three credit reporting agencies allow consumers in those states to establish freezes anyway.
Freezing your credit can give you peace of mind, but it could be a false feeling. Identity thieves have other ways to access your Social Security number or your credit card accounts, and credit freezes don't protect against these alternative methods. Also, a credit freeze can be inconvenient to set up and unfreeze due to all the steps, from keeping your PIN safe and accessible, to contacting all credit bureaus at every step of the process.