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The Pros and Cons of Freezing Your Credit
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In a world where data breaches are increasingly common, many Americans are taking action to protect against credit and identity fraud. Freezing your credit (also called a security freeze) can be an effective way to ward off identity thieves and save yourself a lot of headaches and money down the road.
A credit freeze temporarily suspends anyone from accessing your credit report, which means neither you nor identity thieves can open new lines or credit or loans in your name. Think of it as locking away a valuable item for safekeeping until you need it again. When that time comes, you can unfreeze your credit report and once again allow lenders access. Freezing and unfreezing (or thawing) your account does not affect your credit score.
To freeze and unfreeze your credit, you’ll need to contact all three national credit bureaus by phone, online or in writing.
The pros and cons of freezing your credit
Before deciding if a credit freeze is the best course of action for you, consider the following:
- It’s free. As of September 2018, the federal government made freezing your credit a free option for all consumers. It also does not cost anything to temporarily or permanently lift your freeze.
- It’s a great weapon against identity thieves. A credit freeze is a great choice to help protect yourself from identity thieves because it is guaranteed by law. A credit lock also restricts access to your credit report but isn’t regulated and may require a fee.
- It’s a simple process. The new law, known as the Economic Growth, Regulatory Relief, and Consumer Protection Act, requires all three national credit bureaus to maintain websites where consumers can request credit freezes. If you need to thaw your credit, you can choose exactly how long you want it open for. If you don’t choose a date, your account will remain open until you take action to freeze it again.
- It stops credit bureaus from selling your data. Have you ever wondered why you get so many credit card offers in the mail? It’s because the credit bureaus are allowed to share some of your information with potential lenders, even if you haven’t specifically authorized it. When you freeze your credit, you prevent them from sharing that information, which should stop the credit card offers. (You can also choose to opt out of these offers at any time.)
- You may need to provide a PIN every time you want a creditor to access your credit report. Once you freeze your account, you will receive a PIN from each credit bureau. Though Equifax and TransUnion allow consumers to unfreeze their accounts without their PIN (they will ask you authentication questions to prove your identity), you will need your PIN to thaw your Experian report.
- Lifting the freeze creates extra work for you. The FTC requires that credit bureaus must unfreeze your account upon your request (they must do it within one hour if you request online or by phone, or within three business days if you make your request by mail). But you do have to make the request. This means that anytime you want to apply for a new line of credit, or perform some action that requires a credit check, you will need to take action. And you need to contact each bureau individually to have it done.
- It’s not a 100% guarantee against credit fraud or identity theft. A freeze protects you from identity thieves looking to open new credit lines or loans under your name, but it does not protect you from fraud against existing accounts. If someone has access to your credit card information or Social Security number, they can still commit fraud. In order to protect against those types of thefts, monitor your accounts closely. Take advantage of checking your free credit report from AnnualCreditReport.com, which you can pull weekly until April 2022 (then just once a year after that from each credit bureau), and check your credit score with LendingTree’s free tool.
Is a credit freeze right for you?
Since credit freezes are free and don’t affect your credit score, there isn’t much downside to taking the extra security measure. You can also get free fraud alert protection by registering with one or all three credit bureaus that lasts for one year, and victims of identity theft are protected for seven years. Members of the military on active duty also get free fraud alert protection for one year and can opt out of prescreened credit card offers for two years. Prices for credit monitoring depend on the provider.
Whether you’re a victim of credit or identity fraud or choosing to be proactive against these crimes, freezing is probably your best option for protecting yourself. You can freeze your accounts online, by phone or in writing with the three credit bureaus:
- Equifax: Call 800-685-1111, go online, or mail your request to: Equifax Information Services LLC, P.O. Box 105788, Atlanta, GA 30348
- Experian: Call 888-397-3742, go online or mail your request to: Experian Security Freeze, P.O. Box 9554, Allen, TX 75013
- TransUnion: Call 888-909-8872, go online or mail your request to: TransUnion P.O. Box 160, Woodlyn, PA 19094
FAQs about freezing your credit
How long does a credit freeze last? A credit freeze typically lasts until you remove it. But in a few states, a credit freeze expires after seven years, according to the Federal Trade Commission (FTC).
Do you need to freeze your credit with all the credit bureaus? Yes, you should, for full protection. Unlike a fraud alert, for which you can contact one credit bureau and that bureau must notify the others, a credit freeze requires that you contact each of the three bureaus separately.
What’s the difference between a credit freeze and a credit lock? Both credit freezes and credit locks can restrict the access lenders have to your credit reports. However, credit freezes are free under federal law, while credit locks are products often offered for a fee.
Is freezing your credit card through your issuer a credit freeze? No. If your issuer offers a freeze or lock feature for your card, this is not the same as freezing or locking your credit reports with the credit bureaus. It simply prevents your card from being used temporarily.
Does a credit freeze prevent hard inquiries on your credit report? Yes. While your credit is frozen, lenders will not be able to access your report to evaluate your credit profile to determine your creditworthiness for a particular loan or credit product, which means no hard inquiries. If you are considering applying for a new loan or credit, you’ll have to unfreeze your credit before they can approve you.
How do you know if your credit is frozen? If you’re unsure if you’ve frozen your credit, check with each of the credit bureaus online or by calling the phone numbers listed above.