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How to Freeze Your Credit

By Larissa Mehlfelder, CFP®, CAIA

With identity theft and data breaches on the rise, it’s normal to feel a bit nervous. After all, no matter how many precautions you take, it’s almost impossible to protect all your data, all the time; and if it falls into the wrong hands, you could be in for a world of hurt. At least that was the case until a new law passed in September 2018 allowing anyone to freeze and unfreeze their credit for free.1

What Is A Credit Freeze?

A credit freeze (aka security freeze) is basically a way to restrict access to your credit reports. Generally, in order to open a new line of credit, your credit file needs to be pulled. So with restricted access, no new lines of credit can be opened in your name while the freeze is in place. This means that even if somebody does steal your personal data, they won’t be able to open any new accounts.

Who Is Credit Freezing For?

By law, anyone can use credit freezes to protect themselves. However, they are especially recommended for those who suspect or have fallen victim to identity theft. Other reasons a freeze would be recommended are if your bank notifies you of fraudulent activity, if there are inquiries on your credit report you don’t recognize, or if you receive bills or collection notices for things you didn’t buy.

How Do I Freeze My Credit?

Freezing your credit is an easy process. All you have to do is notify each of the three credit reporting agencies (online, by phone, or by mail) saying you’d like to freeze your credit. Generally, you’ll need to provide your Social Security number, birthdate and other information to confirm your identity.

  1. Equifax: Call 800-685-1111 or go online
  2. Experian: Call 888‑397‑3742 or go online
  3. TransUnion: Call 888-909-8872 or go online

Once the credit freeze is in place you will be given a PIN, be sure to save this as you’ll need it to lift the freeze in the future.

You can also create and freeze a credit report for your child by contacting each credit bureau and providing evidence that you have the authority to do so (e.g., birth certificate). It’s important to note that there are certain entities that can access your credit report even when it’s frozen (prescreened credit offers, creditors with pre-existing relationships, and government agencies are among a few).

How Do I “Thaw” My Credit?

If you need to give someone access to your credit report (credit card providers, insurance companies, cell phone providers, employers, etc.), you must first lift the freeze. This can be done by calling each credit agency and putting in a request (using the PIN you receive when freezing the accounts). If you’ve lost your PIN, you’ll need to go through a process to verify your identity, which may take some additional time (so plan ahead). You can also request that your accounts be thawed via regular mail, but this can take up to three days.

Next Steps

The good news is, you now have another powerful tool in your anti-identity theft arsenal. The downside: you’ll have to take some additional steps to thaw and refreeze your accounts whenever someone legitimately needs access. So, is freezing your credit really necessary? Well, that’s a great question to talk about with a financial advisor. They are always available to discuss ways to protect yourself based on your personal situation. If that’s something you’re interested in, email me at lmehlfelder@simonquickadvisors.com or call 973-525-1027, to learn more.

 

References 

  1. https://www.congress.gov/bill/115th-congress/senate-bill/2155/text

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