Credit can be a perplexing subject at times. Add the fear of identity theft to the matter and it becomes a downright stressful situation. If you want assistance to help keep fraudsters from infiltrating your finances, you may consider placing a credit freeze on your credit report.
Many have heard of a credit freeze, but there are still a lot of mixed messages surrounding what they are. Let’s set the facts straight and debunk some of the most notorious credit freeze myths:
What is a credit freeze?
A credit freeze, also known as a security freeze, is a method of preventing your credit file from being shared with potential creditors or insurance companies so new lines of credit cannot be opened in your name. This is done by individually contacting each of the three credit monitoring bureaus (Experian, Equifax and TransUnion).
Although placing a credit freeze stops fraudsters from opening up new lines of credit in your name, it will not terminate existing fraudulent accounts. So any preexisting fraud damage will be your responsibility to repair.
How do you place a credit freeze?
The process of placing the freeze varies from state-to-state, you can view specific instructions here, but in most cases you must contact each of the credit reporting bureaus and request it. Some people may have to pay an associated fee. Typically, a credit freeze is free to identity theft victims who have a police report while non-victims pay a $10 fee. View a specific list of fees by state here.
Place the freeze with each of the credit bureaus online or by mail:
Once placed, you will receive a PIN or password. You will want to keep it stored in a safe place; you will need it to lift the freeze to be able to open new lines of credit. If you do decide to lift the freeze you must contact each of the reporting agencies again to request that the credit freeze be temporarily or permanently removed. In some states there are charges associated with lifting a credit freeze.
The bureaus will require the following to confirm that the removal is not fraudulent:
- Full name (including any suffix)
- Complete address
- Social Security number
- Date of birth
- 10-digit PIN or password
- Date range of lift (if allowed by state)
- The name of whom you are providing your information to
- Two forms of identification (e.g. paystub with address and utility bill)
Credit Freeze Myths Debunked:
- Credit freezes will stop identity theft
While the freeze will block identity thieves from opening new lines of credit, it won’t stop them if they already have access to your current accounts or if they are working with a lender who does not look at your credit report (e.g. some utilities or apartments do not check your credit score). These actions can still have a significant impact on your credit score.
- You can’t freeze your credit files if you live in a certain state
Credit freezes were once unavailable to residents of states who had not yet adopted a certain law or who only had laws to protect people who were victims of identity theft. However, in 2007, Equifax, Experian and TransUnion began to voluntarily offer freezes to residents of Michigan, Arkansas, Kansas, Mississippi and South Dakota.
- A credit freeze hurts your credit score
No, a freeze does not directly affect your credit history.
- Credit reports do not update during a credit freeze
Although creditors cannot see your score or add new lines of credit to it, the score will still update even during a freeze. It is important to remember that unpaid debt will still lower your credit score, so pay bills in a timely manner.
- No one will be able to see my credit file
Freezes only restrict the access of new creditors; creditors who you currently work with will still be able to see your credit file.
- You can’t see your credit score under a credit freeze
No, you will still be able to check your score and it will still change based on your credit habits.
- Credit-monitoring services will not work during a freeze
No, like a current creditor, these services will also still have access to your credit history.
- Once lifted, new creditors will see that I had a freeze on my files
Once removed and lifted there will be no evidence you ever had a freeze on your credit files.
- A fraud alert is the same as a credit freeze
A fraud alert is like a cautionary red flag that you place on your credit file to notify creditors to take special precautions to ensure your identity is protected. It is only active for 90 days at a time and new lines of credit can still be issued as long as your identity has been properly verified. On the other hand, a credit freeze completely bars all new creditors from opening lines of credit in your name.
The views and opinions expressed in this article are those of EZShield Inc. alone and do not necessarily reflect the opinions of any other person or entity, including specifically any person or entity affiliated with the distribution or display of this content.