Credit Freeze for Privacy and Security

If you’re concerned about identity theft, those reported mega-data breaches, or someone gaining access to your credit report without your permission, you might consider placing a credit freeze on your report. When you place a credit freeze with each of the credit reporting agencies (Equifax, Experian, Innovis, and Transunion), access to your credit file is restricted / "frozen" until you re-contact each of the credit reporting agencies and lift the freeze.

A credit freeze will prevent potential lenders from accessing your credit report, thereby stopping a thief from opening an account or getting credit in your name - even if they have your personal information. Most creditors will not open an account and establish credit for anyone until they check your credit history, and a credit freeze prevents this from happening.

To place a credit freeze on your accounts, you will need to contact each of the credit reporting agencies, request the freeze, and pay a small fee – around $10.00.  Once the credit freeze is established each credit reporting agency provides you with a security code / PIN that you will need to lift the credit freeze (don’t lose these numbers).

I recommend having a credit freeze in place with each of the credit reporting agencies, but there are some potential issues of which you should be aware. Running your credit isn’t just about borrowing money. If you try to rent an apartment, establish an account with a utility company, or set up service with a new cellular telephone provider they may run a credit check. Employers conducting a background check on a new hire may also run a credit check. With a credit freeze in place these checks won’t go through. A credit freeze can delay you when you are legitimately trying to do something that requires the check to be completed. A credit check doesn’t just keep the bad guys from accessing your credit report - it stops all new inquires. Note here that a credit freeze won’t stop hackers from taking control of your current accounts - only from opening new ones.

If you are in the process of renting an apartment, buying a new car, or anything else that is going to require a credit check, then you should wait until that is done before establishing a credit freeze. On the other hand, if you don’t plan on applying for credit anytime soon, then definitely get that credit freeze in place and lock down your accounts.

A credit freeze does not affect your current credit score, and if you decide to apply for credit sometime in the future you can always lift your credit freeze with the credit reporting agency where the check is being run. Remember to put it back in place when the credit check is complete. 

The Federal Trade Commission (FTC) provides more information about credit freezes on its consumer web-site. 

Consumer Reports has an article "Security Freeze vs. Fraud Alert: Deciding the Best Option" that will give you more information. The article states: "A security freeze placed on your credit file will block most lenders from seeing your credit history. That makes a freeze the single most effective way to protect against fraud."