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Should I Freeze My Credit

Should I Freeze My Credit Card

With the rise in massive data breaches such as the one that affected Capital One in July 2019 that affected over 100 million people, the answer to the question of “Should I freeze my credit?” is a resounding “YES.” Especially when the breached data included personal information such as social security numbers that can be used to apply for any type of credit using your personal information.

Just having credit monitoring may not be enough since the credit monitoring agency will only notify you after the identity thieves have already applied for credit. If you freeze your credit on the other hand, it will stop them from even running your credit.

The enactment of the Economic Growth, Regulatory Relief, and Consumer Protection Act which went in effect late September 2018 is mainly known for loosening restrictions placed on banks but on the flipside, it also adds a layer of protection for consumers.

This protection came on the heels of the Equifax Cyberattack between May 13, 2017 – July 30, 2017 where hackers were able to gain access to personal information for more than 150 million Americans. This included names, addresses, social security numbers, birthdates and driver’s license numbers. Some credit card numbers were also compromised.

How Does It Work?

A credit freeze is when you instruct any one of the credit bureaus (Experian, Equifax, TransUnion) to not release your credit information to any third party that requests it.

This could be a financial institution, loan company, credit card company, insurance company or even a property management company or landlord (if you’re looking for an apartment). Each of the credit bureaus will have to wait for you to unfreeze your credit for them to move forward in running your credit.

How Much Does It Cost?

It is now FREE!

Immediately after the Equifax Cyberattack, consumers were all looking for ways to freeze their credit. That’s when everyone found out that it costed money, up to $10.00 to place a credit freeze and another $10.00 to release it, for each of the three credit bureaus. That can get a bit costly.

Now think about how much it would ultimately cost over a lifetime if you had to freeze and unfreeze your credit multiple times when applying for any type of credit, shopping for insurance or applying for a job.

However, this new law makes it mandatory for the three credit reporting agencies to allow consumers to freeze their credit as well as release the freeze at any time free of charge.

How Can You be Protected by a Credit Freeze?

If an unauthorized person steals your identity and tries to open a credit card or get a loan, the credit company will not be able to pull your credit report and therefore the thief would immediately be stopped from opening any new accounts using your identity.

Regardless of how much personal information identity thieves may have access to such as your full name, social security number, birthdate or identification numbers, they simply will not be able to apply for any type of credit using your name if a credit freeze is in place.

With the rise in hacking attacks on large corporations and even credit reporting agencies, you cannot be cautious enough in protecting your own identity because possible compromises are beyond your control.

Who Can Benefit from a Credit Freeze?

Everyone. It doesn’t matter whether you’re a Baby Boomer, Millennial, Generation Z. This type of protection will greatly benefit everyone as well as stop identity thieves in their tracks.

One other demographic who can also benefit from a credit freeze is your minor children.

How to Protect your Children’s Identity

Did you know that more than 1 million children were victims of ID theft last year? It’s amazing how we all think that identity theft only happens to adults. According to statistics, two-thirds of the 1 million victims are children under the age of eight.

Protect your children from a lifetime of headaches by putting a credit freeze on their account until they need it. Just remember to safeguard the PIN they are given. After all, you’re safeguarding your children’s social security number. Why not secure an extra PIN number at the same time? Credit freezes for minors are free as well.

Protect the Identity of Your Elderly Loved Ones

In a day and age where identity thieves are hacking information from large institutions such as federal agencies, department stores and even credit reporting agencies, seniors must also be proactive in protecting their credit and identity. Not to mention the senior demographic is more vulnerable since they are being targeted by fraudsters more often.

If you have elderly parents or relatives especially if they live alone, for their protection you may want to assist them in freezing their credit so it will not be accessible to fraudsters. After all, your senior family members probably won’t be applying for credit anytime soon so why not add a layer of protection?

What is not Protected by a Credit Freeze?

Keep in mind that the credit cards you already have will not be protected. Someone can still compromise the credit cards you currently hold and make unauthorized charges.

The best way to protect yourself is to limit the number of credit cards you carry around and use. You’ll minimize risks and makes it simpler to track your spending. Periodically check your credit card accounts to ensure there are no unauthorized charges.

How to Request or Lift a Credit Freeze

To request a credit freeze, lift a credit freeze permanently or temporarily, you must visit each of the three credit bureaus. Below are the links to each.

For each credit freeze you submit, each respective agency will issue you a PIN number which you will need, to release the freeze if needed. Both Equifax and TransUnion will also require you to have your own log-in information as well.

You must safeguard the PIN you are given by each of credit bureaus as closely as you would your own social security number. If you lose you PIN number, it may be more troublesome for you to unblock your credit as extra layers of verification will need to occur.

How Easy it was to Lift the Freeze

I can attest from personal experience that it was very easy to add the freeze as well as lift it. The request will take effect immediately upon confirmation from each of the credit bureaus.

When I had to apply for a mortgage loan, I simply lifted the freeze and then put it back on when I was ready. Keep in mind that each time a new freeze is requested, you will be given a new PIN so make sure you safeguard it each time.

Final Thoughts

Freezing and protecting your credit from identity theft should be a top priority regardless of your age.

If you’re a parent of a minor, I think freezing their credit is a great ID protection strategy for your children until they turn 18, as identity theft can happen to anyone at any age especially in today’s digital driven society.

As a side note: An indirect benefit for me for freezing my credit is that I will not be spontaneously applying for department store credit cards. At least it will make me think twice as I will have to unfreeze my credit to apply. This added step of work will ultimately discourage me from applying for credit cards and making purchases for stuff I probably don’t need anyways… 😊

If you’ve already frozen your credit, please comment below!

Now, if you don’t agree with freezing your credit, share with us why not?

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