Protect Yourself with a Credit Freeze

Have you heard of freezing credit before, but you’re not exactly sure what it means and how it works? Let’s walk through the basics to learn what it is, how to use it to your advantage, and what tools you can use to simplify the process.

What does freezing your credit mean? 

Freezing your credit restricts any access to your credit report and credit accounts, so no loans or credit cards can be opened in your name without your permission. Essentially, your credit reports stay frozen indefinitely until you unfreeze each one individually.

How is freezing your credit different from credit monitoring?

Monitoring your credit is keeping an eye on your credit on an ongoing basis, which can be a proactive step in avoiding fraud, errors, or ID theft. Your credit reports are still accessible if you apply for a loan or credit card, but you’re paying closer attention to your credit activity as you go about everyday life.

Why should I take steps to protect my credit?

In today’s high tech digital world, there are lots of data leaks and you might not know right away when someone gets ahold of your Social Security number, date of birth or any other sensitive information. Personally, I like to take a proactive approach and keep my credit reports frozen until I need to apply for any kind of loan or access my credit for any other reason. It gives me peace of mind knowing my lines of credit can’t be opened in my name without my knowledge.

In our personal finance world, there’s enough information to remember, so freezing my credit is one less thing to worry about. Freezing your credit can help reduce stress and lighten that mental load we carry around day to day.

For example, at some point I found out that my personal information was included in a data breach. To be cautious, I now keep my credit frozen ongoing. We may not pull credit as often as we may need to stay up on all changes, so keeping credit frozen in the meantime is a great way to protect your information while you’re not using it.

Who can be affected by credit theft or ID theft?

Simply put, anyone can be affected by credit theft or ID theft. Sadly, this reality doesn’t just pertain to adults who already have loans and other lines of credit. I have seen young children’s credit be used for bills and then when they have gotten old enough to learn about credit, they don’t understand why they have collections on their credit reports. In these situations, the credit or ID thief often isn’t some faceless stranger. It’s often someone the victim knew and trusted.

How to freeze your credit 

Freezing your credit is free under federal law. Some online advertisements will show fee-based services for freezing your credit, but freezing your credit directly with the three major credit bureaus is free of charge.

You can request a credit freeze by phone, mail, online, or on an app you download, so no matter what your comfort level with technology, anyone should be able to gain access to this service.

I personally find apps to be the easiest and fastest way to freeze my credit. Trans Union, Equifax, and Experian all have apps where you can securely sign in and select the toggle to freeze or unfreeze your credit. It may look a little different on each app since the three major credit bureaus are separate, individually owned companies but they’re all relatively straightforward.

You can choose to freeze and unfreeze your credit reports by mail, but keep in mind there is a wait of up to three business days to get your credit frozen and unfrozen. It’s not as fast of a method, but it’s still an option if you prefer mail over the online process. You’ll just need to plan a bit more prior to applying for any loans.

Links to all three of the major credit bureaus includes information on freezing credit. Each respective credit bureaus’ apps can be in the app store on your cell phone for easy access.

• Freeze or Unfreeze Your Credit File for Free – Experian
• Credit Freeze | Freeze My Credit | TransUnion
• Security Freeze | Freeze or Unfreeze Your Credit | Equifax®

How to unfreeze your credit 

As stated above, the fastest and easiest way to unfreeze your credit through the app on your mobile device. Simply find the toggle to click unfreeze and it will instantly take effect. If you’re anything like me, you may find yourself at a dealership buying a car realize you forget to unfreeze your credit. Thankfully with the apps, you can do so on the fly because it’s right on your phone.

Helpful Websites & Apps

If you don’t want to fully freeze your credit until you absolutely need to, there are other ways to monitor your credit ongoing. This way if something does show up, you can address it in a timely manner.

Annualcreditreport.com is a government-sponsored website that allows you to pull credit reports (not scores) for free from all three major credit bureaus throughout the year. Carefully combing through each page of these reports yearly is the minimum suggested habit to verify accounts, check for errors, and keep your credit in check. In today’s fast paced world, I would recommend more frequently, such as quarterly.

There are also free credit monitoring apps such as Intuit credit karma, Credit Sesame, Wallet Hub, My FICO, and the apps directly connected to the credit bureau– Trans Union app, Experian app and the Equifax app. Having an app that you monitor, even monthly, will not hurt your credit score, since these checkups are considered soft inquiries. One big benefit of using these apps is anytime my credit is pulled, a notification pops on my phone alerting me that my credit is being pulled. If it’s not a company I typically do business with, I can quickly look into the notification to make sure I know what’s going on before something happens that could affect my credit in a negative way.

Remember to unfreeze credit before a loan application

Remember to unfreeze your credit report at least three business days before via mail, or day of for online or apps when applying for a loan. When you’re done getting your credit pulled, don’t forget to refreeze to know your credit is safe and secure going forward.