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What is a Credit Freeze? How Can Credit Freeze Help You?

What is a Credit Freeze?

Let’s get started, and actually know what a credit freeze is.

What is a Credit Freeze?

A credit freeze otherwise known as a security freeze hinders companies from making new inquiries for your consumer credit report. Because creditors can’t check your credit report to ascertain your creditworthiness, potential thieves would have a more difficult time opening fraudulent accounts.Credit Freeze

How Can Credit Freeze Help You?

Once your personal information is compromised, you stand a risk of having your identity stolen, which can lead to unimaginable tax bills, denial of credit, and even an arrest.

With the recent increased frequency and severity of data breaches in recent history, many people have had some personal information stolen, which includes passport numbers and social security numbers which is why a credit freeze is a good option.

You can still check your credit report and score when you have a credit freeze in place.

Freezing and unfreezing your credit reports with the three major credit bureaus (i. e.) Equifax, Experian, and TransUnion are free. Immediately you make an online or phone request to freeze your credit report, the change takes effect in one business day. If you make a freeze request via mail, it will be effective within three business days.

You can lift a freeze when you are ready to apply for credit, using a PIN. This can be provided either by you or the bureau.  If you request a temporary lift online or over the phone, you’ll get faster results, which can be in one hour. If you make the request by mail, the bureau must lift to freeze in 3 business days.

You can still have companies pull your credit report to screen you for credit card offers even with a credit freeze in place. You may also still get pre-approved credit card offers after freezing your credit report.

You can also freeze your credit reports using smaller credit bureaus too. Note however these agencies may still charge a fee to freeze and unfreeze your credit report based on your state’s laws.

Alternatives to Credit Freeze

You can use other measures to safeguard your account another credit freeze.

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Fraud Alert: This can help you prevent identity theft, even though this measure is not as secure as a credit freeze. Using fraud alert means companies must take additional steps to verify your identity before accessing your credit report.

Every major credit bureau offers a subscription-based lock service that operates just like credit freeze but enables you to lock and unlock your credit online or through the mobile app. If you are using a credit report lock, you are required to pay a monthly fee to use the service, and fees vary by a credit bureau.

Downsides To Credit Freeze

A credit freeze does not offer 100% protection from identity theft. Thieves can also use your personal information to commit other types of fraud, like tax fraud.

A credit freeze does not prevent account takeover fraud, which can take place when someone hacks into one of your existing accounts.

Freezing your account may be inconvenient at times. This is because you have to contact each bureau to lift the freeze and wait for your credit report to unfreeze each time you need to make a credit-based application like applying for a loan or getting a background check for a job.

Some companies and entities will still have access to check your credit report even with a credit freeze in place. Debt collectors, who are working on behalf of a previous creditor, can also check your frozen credit report.

In summary, if you suspect that your personal information has been compromised or you’ve been a victim of identity theft, freezing your credit can safeguard you against potential identity theft?

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