Credit Freeze

Credit Freeze

Everything you need to know

For people who are concerned about identity theft or data breaches, placing a credit freeze on your personal financial report would be a great idea.

In this blog, I shall explain to you what a credit freeze is, how to freeze your credit and the credit bureaus that can make this happen for you.

What is a Credit Freeze?

This is also known as a security freeze or a credit block. It is a free tool that enables you to restrict all access to your credit report. It also makes it difficult for thieves and fraudsters to access your personal information.

Most creditors will need to access your credit report before approving your requests.  A credit freeze ensures that they cannot have such access unless you have given them permission to do so.

Now, just over a year ago, many people woke up to the news that Equifax had experienced a major security breach, and hackers had had a good time messing with people’s security information, which included their social security numbers as well.

This data breach left millions of people exposed to Identity theft, and the truth of the matter is that, once your data has been accessed, it cannot be reversed. Your personal information will forever be out there with people you do not know, plus you have no idea what they will be planning to do with said information.

This risk is just too much.

As a result of this, a new federal law was put in place, which would help consumers stop intruders from accessing their personal information.

The three main reporting agencies – Equifax, Experian, and Transunion were required to offer consumers a credit freeze free of charge. This freeze would restrict access to the consumers’ credit file, and stop thieves from applying for credit cards with their names.

In addition, parents were allowed to freeze the credit report of all their kids under the age of 16, until when they are old enough to get a credit card.

Some FAQ about credit freeze:

Will Freezing my credit affect my credit score?

The short answer is NO. A credit freeze does not affect your credit score. It also does not;

  • Stop you from accessing your annual report.
  • Prevent you from opening a new account, renting an apartment, applying and getting hired for a new job. However, if you are planning on doing any of these, then, you may need to temporarily lift the freeze so a potential employer or landlord can access your information. Lifting the freeze is free, and freezing your report again is also free.
  • Stop a thief from charging your existing account. You will need to remain vigilant and monitor all of your credit card and bank information from fraudulent transactions.

Does it stop any pre-screened offers of credit?

No. A credit freeze will not stop a pre-screened credit offer. If you want to stop this, you must go online and cancel it instead.

There is a telephone number available online for you to call. This number is for a nationwide credit bureau that will help you stop them from sending these offers. However, if the offer is not based on a pre-screening, you may still end up receiving it.

You should also know that pre-screened offers sometimes offer great benefits such as learning what is available in the market, comparing costs of different companies, and being able to get the best product that suits you perfectly.

In addition, when you are pre-selected, it means that there are few chances that you will be rejected when you apply for credit; also, some credit card companies will only offer credit cards to pre-screened clients.

Who can see my credit report after it has been frozen?

Now, as much as you have frozen your credit report, some entities can still have access to it. These are;

  • All existing creditors or debt collectors working on their behalf.
  • Government agencies can access your credit report who can be granted access as a result of an administrative or court order, or if they have a search warrant or a subpoena.

Can I lift a credit freeze?

Yes, you can. A credit freeze will remain in place until you request the bureau to either lift it or remove it completely.

If you make the request online or by telephone, the credit bureau is required to lift it within three business days from the date of request.

What is the difference between a credit freeze and a fraud alert?

Most people are confused between these two. A credit freeze, as explained above is a lock that you put on your credit report. This means that nobody will be able to have access to your credit report unless you give them permission to do so.

A fraud alert, on the other hand, allows creditors to have access to your credit report so long as they will take the extra steps of verifying your identity. This means that they should call you in order to verify that you are indeed the person that has made the credit request.

A fraud alert is effective when stopping someone from opening a new credit account in your name, but it may not be as effective in preventing fraudsters from misusing your existing credit accounts. You therefore still need to keep monitoring your bank account, insurance statements, and credit card information for fraudulent transactions.

Placing a fraud alert is very easy, and it is also free. All you need to do is place a call to one of the credit bureaus, and they have a responsibility to alert the other 2.

There are 3 main types of fraud alerts;

Fraud alert: You can use this when you are concerned about identity theft. If you are not yet a victim, then this one will protect your credit report from being accessed fraudulently for a year. If you have had your wallet stolen or your social security, then this is the best option for you in the meantime.

Extended fraud alert: This is for anyone that has been a victim of identity theft. This extended alert will protect your credit for seven years.

Active duty military fraud alert: As the name suggests, this is for people who are in the military, and they wish to protect their credit while in deployment. This fraud alert will last for one year and can be renewed during the length of your deployment. In addition, the credit bureaus will go ahead and take you off the pre-screened lists for at least 2 years, or until you request them not to.

What is the difference between a credit lock, and a credit freeze?

These are two words that are constantly used interchangeably. This is mostly because they offer the same protections.

Now, the main difference between the two is that; it is much easier to unlock your locked credit report than it is to ‘thaw’ a frozen report. But, a credit freeze normally has more legal protections as compared to a credit lock.

A credit lock can actually be removed at any time you wish on your home computer, but a credit freeze will take a few days, and it is normally done by the credit bureaus.

Initiating a credit freeze:

Even though this is a free process, you must still request for a credit freeze from the three credit bureaus.

The process can be initiated online by calling the following numbers;

Equifax (800-349-9960)

Experian (888-397-3742)

TransUnion (888-909-8872)

Once you make the call, the bureaus are required by law to freeze your credit within one business day. Each of them will them send you a letter of confirmation containing a unique PIN code. This PIN is vital as you will be required to use it when unfreezing your account.

Experian Credit Freeze:

To request your free credit freeze with Experian, you will need to log on to their website and visit their freeze center or call this number – 1 888 EXPERIAN. Then, provide them with the information needed for this to take place.

If you decide to submit this request in writing, you can send your letter to; Experian Security Freeze, P.O. Box 9554, Allen, TX 75013.

This request should include the following information;

  • Your names in full, including your middle initial.
  • Your social security numbers.
  • Your addresses for the last two years.
  • Your date of birth.
  • A copy of a government-issued ID such as a driver’s license or a state ID.
  • A copy of utility bill, insurance card, or bank statement.

In addition, Experian can also do a credit lock, a free dark web scan, an Identity theft protection, and a free child ID scan.

TransUnion Credit Freeze

With TransUnion, you will need to have an account in order to freeze your credit online. You can also download and use their app for this process;

create a user account to add or modify an FCRA free freeze

You will provide the following details for this to happen;

  • Your names in full, including your middle initial.
  • Your social security numbers.
  • Your addresses for the last two years.
  • Your date of birth.
  • A copy of a government-issued ID such as a driver’s license or a state ID.
  • A copy of utility bill, insurance card or bank statement.

If you prefer to send a postal mail, you can use this address; TransUnion LLC, P.O. Box 2000, Chester, PA 19016. All credit freeze correspondence must include the above information.

Equifax credit freeze:

Equifax credit freeze

With Equifax, the best way to request for a credit freeze is online. You will be asked to provide the following information;

  • Your names in full, including your middle initial.
  • Your social security numbers.
  • Your addresses for the last two years.
  • Your date of birth.
  • A copy of a government-issued ID such as a driver’s license or a state ID.
  • A copy of utility bill, insurance card or bank statement.

If you prefer to send a letter, use this address – Equifax Security Freeze, P.O. Box 105788, Atlanta, GA 30348.

7 steps to take before placing a freeze on your credit:

Don’t panic:

Most people considering a credit freeze have been hacked, and hence they tend to be pretty worked up when checking online at the different ways of freezing their credit. What you need to do is simply, relax, and log on to www.equifaxsecurity2017.com. In order to check whether your credit was compromised or not.

In case there was a data breach, you can log on to this website, and find out what to do next https://www.experian.com/blogs/ask-experian/heres-what-you-should-do-after-a-data-breach/

Understand what a credit freeze means:

You must know what it means to freeze your credit. This I have explained in details above. The information helps you understand what you are about to do, the consequences of such actions and how to unfreeze your credit when you need to.

How much does it cost?

Before the infamous credit breach in 2017 by Equifax, you had to pay for a credit freeze, but now, it is a free process, that is regulated by the state. No credit bureau should charge for freezing your credit report, and in addition, they are required to do so as fast as possible.

Expect delays when you freeze your credit:

Once you freeze your credit, you should expect delays with things such as applying for a loan, job, or credit card. This is because companies will generally not extend you any credit unless they have had a look at your credit report.

A frozen credit report will also take some time to become unfrozen, and hence this is where the delays will be.

Always remain vigilant:

Even after freezing your credit, ensure to remain as vigilant as possible. Keep checking your bank statements and other documents, because you just never know what could happen. Also, ensure to change your passwords as often as possible.

Conclusion:

A credit freeze is a great option if you have been involved in a data breach, like what happened in 2017 with Equifax, but you must also be wise enough and understand exactly what it is, and how it can help you.

If, however you need to take out some credit such as a loan, you will be required to unfreeze your credit, so that your potential creditor can have access to the information on your report. This helps them make a decision on whether to extend you credit or not.

Read more on credit reports on this article: https://www.socialfish.org/credit-score/

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