Freezing your credit can help you protect your personal information from criminals while also helping you monitor your credit. Previously, you were required to pay a fee to freeze your credit.
However, all three major credit bureaus now provide this benefit free of charge.
To effectively freeze your credit and protect your identity against theft, you must freeze your credit with all three reporting bureaus. These bureaus are Experian, TransUnion and Equifax. If you fail to freeze your credit across all three branches, you remain susceptible to an attack on your identity.
When you successfully freeze your credit across all three reporting bureaus, you increase your ability to stave off identity thieves. This stops them from opening a new credit account under your name or using your existing accounts to make purchases. When you are diligent about protecting your identity, you prevent any serious issues from occurring. More information about how to freeze your credit and the various benefits is covered below.
There are several benefits associated with freezing your credit, but the primary benefit is the added protection you receive against identity theft. Federal law requires the credit bureaus to provide security freezes, or credit freezes, for free.
When a criminal steals your identity and uses your credit to make purchases, your credit score can suffer greatly, and it may take you some time to repair your credit. Typically, when someone gains access to your credit and begins making purchases, you must alert your credit card provider to take the steps necessary to cancel the card the criminal has access to. Sometimes, it can be difficult to prove that your identity was stolen in the first place.
By freezing your credit in advance, you reduce your chances of becoming a victim to identity theft. This saves you from the complications associated with canceling your credit card and ordering a replacement card. It also saves you from having to prove to a credit card company that you did not open any given account.
In addition to the added security, freezing your credit allows you to keep accurate records of your payment history across each credit account you have open at the time of the freeze. Once these accounts are frozen, credit card companies and potential lenders cannot gain access to the payment records for your accounts unless you choose to “thaw” an account to permit the viewing.
Thawing your account is simple. You must simply provide some identifying information to submit the request. You can even unfreeze your account for a limited amount of time. Once that time passes, your account will freeze again. This makes it easier to apply for credit without having to worry about manually re-freezing your account later.
Freezing your credit is free. In the past, it cost approximately $10 to freeze your credit with one of the credit reporting bureaus. This totals approximately $30 when you freeze your credit across all three bureaus to ensure your accounts are protected against potential threats and security breaches.
After Equifax suffered a major security breach, it began to offer credit freezes for free. TransUnion also begin to waive the fee associated with freezing credit to help promote the idea further.
Many individuals were opting out of freezing their credit due to the fee associated with undertaking this process and because they assumed the added security was not needed to protect their identity. However, identity theft or a security breach can happen at any time and often happens without warning, which means your accounts are constantly vulnerable. The only true way to protect your credit accounts is to freeze your credit.
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Experian was the last of the three credit reporting bureaus to waive the credit freezing fee and started to make this service free beginning in September 2018.
Once you have chosen to freeze your credit, you must go through the process of freezing your accounts with all three credit reporting bureaus. To do so, you must place a freeze on your existing account with Experian, TransUnion and Equifax and create three separate personal identification numbers — one for each bureau.
It is important to keep a record of which PIN is associated with which bureau, as this is necessary information to start the process of thawing your account when you are ready. The process is relatively quick. You can either call each credit bureau or order a credit freeze online. Ordering a freeze online is the most convenient option for many consumers, since it takes just a few minutes.
TransUnion has recently developed a smartphone app you can use to easily freeze and thaw your credit, which helps to further reduce the length of the process. The app is formally known as myTransUnion and is available for both Apple and Android users alike. You may need to supply your PIN for TransUnion when completing either the freeze or the thaw process through the smartphone application.
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If you have children younger than 16 years of age, you can opt to freeze their credit as well to protect their identity until they can complete this task on their own. While your child may not have access to a credit account at this age, his or her personal information may still be accessed by criminals who are looking for ways to create new lines of credit. You may consult with the Federal Trade Commission (FTC) guidelines regarding the process associated with creating and freezing credit for a child younger than 16 years of age.
If you wish to open a new line of credit, you must thaw your credit with all three credit reporting bureaus. When you are applying for a new credit card or a line of credit at a store, the company you are applying through will try to access your credit history. If that history is frozen, the company will not be able to determine whether or not you’re eligible for a credit line. Therefore, be sure to unfreeze your histories at each of the three credit bureaus before you apply for a loan or a line of credit.
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