Free Credit Freeze

Clay Wood |

At the end of September Congress amended the Fair Credit Reporting Act to require reporting agencies to freeze reports for no charge.  This was a result of the data breach at Equifax that exposes around 148 million Americans’ personal information.  When you place a freeze on your reports, it restricts lenders from accessing your information.  But just because it is free doesn’t mean everyone should freeze their credit.

Freezing your credit can be a great way to protect yourself from identity theft.  However, it is also a time-consuming process.  To place the freeze on your credit, you have to put in a request individually with each reporting agency.  Then if you do need to access a new line of credit, you will have to request each agency unfreeze your reporting.  It then takes a day to freeze or unfreeze your reporting if done online or by phone; it can take up to three days if done by mail. So if you’re looking to get a new credit card, buy a house, or buy a car, a credit freeze probably isn’t your best bet.   If you know for a fact that you won’t need access to new lines of credit anytime soon, then it can be a very useful tool.

If you decide that a credit freeze won’t work in your current situation, you may want to place a fraud alert with the reporting agencies.  An alert offers less protection, but it makes it harder to open more accounts in your name.  An alert will require a business to verify your identity before it issues credit so the reporting agency may reach out to you.  When you place a fraud alert, you only have to reach out to one agency, and that agency will contact the other two credit bureaus to let them know an alert has been placed.  The alert will stay with the reporting agency for one year, so set yourself a reminder to renew it if you want to keep the alert going.

The law also states that freezing your child’s credit is free, too.  Children’s credit can be taken advantage of by identity thieves because thieves can start a credit file from scratch from an unblemished credit background.  Just remember if you want to start a credit history for your child you will have to call the credit agencies to “unlock” your child’s credit.

It is never a bad idea to put measures in place to protect you from identity theft.  Just use the method that works best for you.  Having a credit freeze on your account is a great way to protect yourself, but remember there are multiple ways to protect your identity.  Whether you decide a credit freeze is right for you, it is still a good idea to keep passwords safe, check your bank accounts periodically, place a fraud alert on your account, or use an identity theft protection company.

-Clay Wood-