How to Freeze Your Credit for Free
To stop a criminal from using your personal information to open a credit card in your name, start by preventing lenders from checking your credit unless you first unfreeze your information.
Even if you have poor credit—or are low on savings—protecting your credit from identity theft by taking advantage of a free credit freeze is a good idea.
Thieves can steal your personal information (i.e., Social Security number, driver’s license number, and birth date) and create new identities to fraudulently get loans and open credit card accounts in your name.
A credit freeze prevents lenders from checking your credit in order to open a new account. So, if a criminal has your personal information and tries to open a credit card in your name, a credit freeze will stop the lender from checking your credit. If you have a credit freeze in place, you must remove it to apply for credit.
Also called security freezes, free credit freezes were required under federal law in May 2018. The three major credit reporting bureaus—Equifax, TransUnion, and Experian—now allow free freezes of consumers’ credit files. The freezes prevent information from being provided to lenders unless you “thaw” the freeze with a personal identification number.
While identity thieves can steal personal information through data breaches such as the one that occurred at Equifax in September 2017 that compromised sensitive information for nearly half the population of the United States, it’s important to remember that consumers are responsible for initiating the freeze.
In addition, consumers must also keep track of the necessary PINs in order to lift the freeze before applying for any new credit. It’s also important to note that credit freezes will need to be thawed at all three credit bureaus since it’s impossible to know in advance which credit bureau a lender will use.
The new law also allows parents to create and freeze credit files for children under the age of 16 so that their identities aren’t misused.
If you’re looking to protect yourself by setting up a credit freeze, make sure you freeze your information at the three major credit reporting bureaus, as well as at the National Consumer Telecom & Utilities Exchange (NCTUE). With the NCTUE, a consumer reporting agency that provides data to some cellphone, subscription-based television services, and utility companies, a freeze is free. Bear in mind that freezing your credit reports at the main credit bureaus isn’t always enough, as identity thieves can still steal your information by hacking cellphone companies and other utilities.
Setting up a security freeze is a good start when it comes to protecting your credit from identity thieves, but it won’t protect you from other types of fraud that involve someone using the credit card number you already have or impersonating you to claim your Social Security benefits.
To prevent these types of fraud, check your credit card statements for suspicious charges, check your credit reports periodically, and monitor your online Social Security account.
This article is intended for informational purposes only and should not be construed as professional or legal advice.