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How to freeze your credit (and should you?)

How to freeze your credit (and should you?)

*Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It may not have been reviewed, approved or otherwise endorsed by the credit card issuer. This site may be compensated through a credit card issuer partnership.

This article was last updated Mar 15, 2019. Terms and conditions may have changed. For the most accurate information, please consult the issuer website.

Instituting a credit freeze is a great way to prevent identity thieves from opening new accounts in your name, but it’s important to know a freeze can’t prevent a thief from stealing details of existing credit accounts. Nevertheless, why not take this all-important step to lock down your credit profile now that it’s free and easy?

An amendment to the Fair Credit Reporting Act made credit freezes free on Sept. 21, 2018 — eliminating the previous $5 to $10 fee. However, other identity theft services and credit locks are excluded from this ruling and may still charge a fee. For example, Experian CreditLock charges a $24.99 monthly fee ($4.99 for your first month).

Each year, there seems to be more data breaches, most notably Equifax in 2017, which released the confidential information of about 148 million Americans. In fact, there were 1,579 data breaches in 2017 — up 44% from 2016 — which exposed 179 million records, according to Experian.

While fraud is widespread, there are precautions you can take to limit the chances your data is exposed. You may have come across credit locks and freezes, and wonder which is better.

The answer is simple: “Credit freeze, 100%,” said credit expert John Ulzheimer, formerly of FICO and Equifax. “They do almost the same thing, restrict access to your credit reports except under certain conditions, but your credit freeze rights are more defined,” he explained.

“Now that the ‘cost’ variable is no longer a barrier to entry, there’s really no reason why everyone doesn’t freeze their reports. This should be as fundamental as locking the doors to your house,” said Ulzheimer.

Here’s a rundown of what you need to know about credit freezes.

What is a credit freeze?

A credit freeze, also known as a security freeze, restricts access to your credit reports. This prevents fraudsters from opening new credit-related accounts with your information. You, along with any current creditors or lenders, will continue to have access to your credit reports. There is no affect to your credit score and you can continue to get your free annual credit report.

Why should you implement a credit freeze?

A credit freeze is proactive protection while everything else is reactive, said Ulzheimer. Checking your bank statements or credit report periodically is helpful, but those actions are reactive.

Credit freezes are the most extensive, free resource available for Americans to limit access to their credit reports and safeguard against identity theft. Just know, they’re not fool-proof. For example, a credit freeze won’t prevent someone from skimming your card details at a gas station or committing card-not-present fraud over the internet.

Read our guide on how to report and prevent credit card fraud.

How to freeze your credit

Freezing your credit is fairly simple and only takes a few minutes. Credit freezes need to be implemented with each of the big three credit bureaus for full protection — it’s not a one and done situation. The process varies slightly by bureau, but mainly asks for your personal information, such as address and Social Security number, and requires the creation of a PIN.

Here is the contact information to freeze your credit with each bureau:

How to unfreeze your credit

When you want to apply for new credit — or even a job that requires a credit check — you’ll need to unfreeze your credit with each bureau, unless you know which report is being pulled. This can be done one of two ways: remove a credit freeze or temporarily thaw it for a specified period of time.

The best option depends on the timeline that the party pulling your credit needs. For example, if you’re applying for a credit card online, you’ll typically only need to unfreeze your credit for a short time, say a day or two. In that case, a thaw would be the best choice.

If you’re applying for a loan or credit that takes longer, such as a mortgage or a credit check for an apartment lease, you may not have a finite timeline on when your credit will be pulled. It may be more beneficial to completely remove the freeze, then reinstate it once the application process is complete.

Credit can be unfrozen or thawed online or over the phone by logging in to each of the credit bureaus’ websites or calling the numbers listed above.

How long it takes for credit to freeze and unfreeze

There have been “grossly incorrect” reports that it takes a long time to initiate or remove a freeze, said Ulzheimer. “Freezing and thawing takes minutes, not hours, or days, as some might suggest,” he said. “I’ve tested this, sat down in front of a lender at a branch, whipped out my iPhone and thawed my reports, and walked out with an approval.”

Just know, the timeline for when a credit freeze is placed or removed can vary, and may not be instant, like Ulzheimer’s experience. However, the Economic Growth, Regulatory Relief, and Consumer Protection Act sets an official timeline for when credit freezes must be placed, depending on how you initiate a freeze:

  • Requests that are made by toll-free telephone or secure electronic means: One business day after receiving the request directly from the consumer.
  • Requests that are made by mail: Three business days after receiving the request directly from the consumer.

In addition, there are regulations for how quickly a freeze needs to be removed (upon consumer’s request):

  • Requests that are by toll-free telephone or secure electronic means: One hour after receiving the request for removal.
  • Requests that are made by mail: Three business days after receiving the request for removal.

Bottom line

A credit freeze is a great way to limit your chances of identity theft. Since they are free to implement, there’s really nothing keeping you from taking the steps to reduce potential fraudulent activity. While freezes can’t prevent all types of fraud, a freeze can reduce the chances that sensitive information winds up in the wrong hands.

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July 22, 2019