Every time you hand over your personal information to open a credit card, get a loan, or rent a car, you're increasing the possibility your data will get in the wrong hands. Data breaches reached a record high in 2021, according to the Identity Theft Resource Center.
If your personal information was compromised by a data breach, you may be worried about identity theft. But even if you think your personal information is safe, it's smart to take steps so thieves can't open accounts in your name.
Freezing your credit is an easy step that prevents someone from using your personal information for their financial gain.
How do I freeze my credit?
The three major credit card companies all give you the option of freezing your credit. When your credit file is frozen, creditors can't check your report, preventing someone who has your personal information from opening a new credit line in your name.
If you want to apply for new credit or a loan, you can lift the freeze with a PIN or a phone call.
You must freeze your credit individually with each of the three major credit bureaus – Equifax, Experian, and TransUnion. They all have a slightly different process. You can apply for a freeze online or by phone. All three have a snail mail option, too, but online is the easiest way to go.
Equifax requires you to create a myEquifax account to manage online access to your credit file. You must supply your name, address, date of birth, Social Security number and mobile phone number so Equifax can verify your identity. You'll also create a password so you can access your account. Once the account is set up, you can manage your freeze, check your credit report, and start or monitor a dispute. To begin or manage a freeze by phone, contact the Equifax call center at 800-387-4329.
Experian has an online Security Freeze Center where you can start and manage your freeze. You'll need to provide your full name, address, date of birth, email address, and SSN. You can create a PIN or ask the company to assign one to you. You'll need the PIN whenever you want to lift or reinstate the credit freeze.
TransUnion requires you to sign up for a PIN-controlled account to manage your freeze. You'll need to provide the same identifying information the other credit bureaus require. You must choose a six-digit PIN which you'll use to start and stop the credit freeze.
You can also visit the Google Play Store or Apple Store and download the credit lock app for each credit bureau. With the apps, you manage access to your account with a simple swipe.
What are the pros and cons of freezing my credit?
Freezing your credit prevents creditors from checking your report before opening a new account. That stops an identity thief from opening an account in your name. However, it also prevents you from getting new credit until you lift the freeze.
When you apply for new credit like a mortgage, ask which credit bureaus the lender checks, then temporarily stop the freeze on those accounts.
Lifting the freeze is quick and easy, as long as you keep track of your password or PIN. TransUnion says the freeze is usually lifted as soon as you request it but advises allowing an hour for the account to open up.
Creating a freeze doesn't affect your credit score or any credit lines you already have. If your credit file is locked and someone steals your credit card number, they can make charges on the account, so freezing your credit doesn't stop all illegal activity.
Are there alternatives to freezing my credit?
A credit freeze is simple, free, and available to anyone. The credit bureaus offer another product, a credit lock, that allows you to control access to your account via an app. The lock may be free or require you to sign up for a paid credit monitoring service. You cannot have both a freeze and a lock on your account. If you freeze your account, then decide to lock it, you must first remove the freeze.
TransUnion offers a free product, TrueIdentity, that allows you to lock or unlock your credit report instantly via an app. You also get alerts when someone tries to access your credit file. The company's paid credit monitoring program adds features like a credit score tool, access to a credit score specialist, and identity theft insurance.
Equifax offers a free locking app, Lock & Alert, so you can control when your account is unlocked. The app also sends an alert when someone tries to access your account.
Experian requires you to buy its Creditworks Premium service to use its lock feature. The service includes identity theft insurance, notification of new credit activity, and monthly updated credit reports.
Another alternative to a credit freeze is to buy a third-party identity theft protection and monitoring service.
Credit freezes are free and open to all consumers. The report stays frozen until you remove the freeze. Consumers who meet specific conditions also have a few other tools to control access to their credit information.
- Fraud alert: If you suspect potential fraud, you can place a fraud alert on your account. While the fraud alert is in effect, a business must verify your identity before it can issue credit in your name or make changes on existing accounts. A fraud alert is free and lasts for a year, although you can renew it. When you contact one of the three major credit bureaus to institute a fraud alert, they must tell the other bureaus to place an alert on your account. You also get a free copy of your credit report from all three bureaus.
- Extended fraud alert: This free option is only open to victims of identity theft who have filed a police report or an FTC identity theft report. It lasts for seven years and requires businesses to contact you before issuing credit in your name or making changes to your accounts. You're also eligible for free credit reports from each bureau two times a year. (Space them out so you can monitor your credit every other month.). As with a regular fraud alert, if you apply at one bureau, it will contact the others for you.
- Active-duty alert: Service members can institute an active-duty alert to require businesses to verify identity before issuing credit. The initial alert lasts a year and can be renewed as long as you're deployed. There's no charge, and when you contact one credit bureau, it must alert the other two.
Can I freeze my child's credit report?
Minors don't usually have a credit report on file, making it easier for fraudsters to steal their identity. To protect your children, you can freeze their credit reports.
When a parent or guardian requests a lock on a child's credit, the credit bureau makes a credit report for the child, then freezes it. Before that can happen, parents must prove their own identity, their child's identity, and their relationship. That requires submitting copies of documents such as your driver's license, child's birth certificate, and Social Security cards.
You must apply with each bureau where you want to freeze your child's credit.
Can anyone see my credit report if it's frozen?
When you freeze your credit report, the credit bureau will allow certain entities to access it. Those include:
- Government agencies
- Companies that use credit information for purposes such as underwriting insurance or employment screening
- Companies that provide credit monitoring and related services
- Companies you have a current account with and collection agencies working on their behalf
- Companies that make pre-approved credit offers
Will freezing my credit affect my credit score?
Freezing your credit has no effect on your credit score. However, if you don't lift the freeze when you apply for a new line of credit, the lender won't be able to see your credit report. If the lender can't review your credit report, your credit application will be turned down.