The question of “Why should I freeze my credit?” has been asked of me quite a few times lately since the enactment of the Economic Growth, Regulatory Relief, and Consumer Protection Act. This law which went in effect late September 2018 is mainly known for loosening restrictions placed on banks but also adds a layer of protection for consumers.
You may recall the Equifax Cyberattack where hackers were able to gain access to personal information for more than 143 million Americans. This included names, addresses, social security numbers, birthdates and drivers license numbers. Some credit card numbers were also compromised.
After the hack, consumers were all looking for ways to freeze their credit. That’s when everyone found out that it costs money, up to $10.00 to freeze your credit as well as to release it, for each of the three credit bureaus: Experian, Equifax and TransUnion.
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.
What Exactly is a Credit Freeze?
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 get your express consent for them to release it to the third party.
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 with your identity.
With the rise in hacking attacks on large corporations and even credit reporting agencies such as Equifax, you cannot be cautious enough in protecting your own identity because possible compromises are beyond your control. One sure way to protect yourself is to put a freeze on your credit report.
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. The service is also free for all children as well. Protect your future as well as theirs.
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 have and make unauthorized charges. The best way to protect yourself is to limit the number of credit cards you use to keep track of all the charges. 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.
As a side note: As the Holidays are approaching, an indirect benefit for me for freezing my credit, which I already did, 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 making a purchase for something I probably don’t need anyways… 😊
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