Credit Freeze Now Free – Do You Need to Lock Down Your Report?

Freeze your credit
Why you should freeze your credit now that it's free
Image by Olivier Lemieux via Unsplash

 

A new law just came into effect that allows you to freeze your credit bureau files for free. This is a significant change that can protect you from identity theft and fraud. Before the new law came online, it cost $3-12 to freeze your credit report and then unfreeze it. Now it’s 100% free in all states, and it might be something for you to consider to avoid unauthorized access to your credit file.

Freeze blocks access to your account

Without your account frozen, fraudsters can use your credit to open new accounts in your name if they have enough personal information to spoof you. With basic information including your name, social security number, etc., a fraudster can apply for a credit card in your name, run it up, then leave you with the debt.

When your credit account is frozen, the creditor they apply to tries to run a credit check to approve the new account and they cannot see your credit info or score, so they reject it. That shuts down the attempted fraud because the potential creditor will refuse them based on lack of credit history access. That avoids identity theft headaches.

Freeze blocks you also – here’s how

It’s important to know that a credit report freeze also tampers with your ability to apply for new credit. If you apply for new credit with your report frozen, you’ll get the same type of rejection that a scammer does. However, you can prevent the issue.

When you apply for new credit, ask the creditor which bureau they use to run credit checks. Some use one bureau, and some will vary among the three (Equifax, TransUnion, or Experian). If they use just one, you can unfreeze that report, then refreeze after the credit check.

If they vary among bureaus, you’d have to unfreeze all three of your reports then after the check you can refreeze. When you had to pay for this service, you can see how it could get expensive to keep your credit locked down, but now it’s free!

Why you should freeze your credit

The new law goes into effect September 22, so if you want to freeze your credit, it’s free. It’s also important to note that the term for freezing has extended. Before the new law, the longest your credit could be frozen was for 90 days.

That meant if you wanted to keep it frozen, you’d pay four times a year to keep renewing the protection. Now the freeze can last for up to a year. You can also tack a fraud alert onto your account if you’ve had identity theft issues.

Consider freezing your child’s credit too

Those will stay on your credit report now for a year also and alert potential creditors that they need to do a more extensive verification of the applicant’s identity. It’s not just your credit that can be at risk – your children’s identity can also be stolen.

Freezing your children’s credit is something you should do as well. Scammers often target children because no one habitually checks those credit reports. Have you ever checked your child’s credit? Since locking it down is now free, it’s smart to do so for your children.

Most people don’t apply for credit that often, so it’s not a constant hassle to unfreeze and refreeze your credit. It will not affect any existing credit accounts you have, only when you apply for new credit. Then you can unfreeze and refreeze.

It’s a much better approach to protect your credit score by preventing fraud rather than trying to clean it up after the fact! To find out more about improving your credit score today, check out the Credit Score Keys DVD.

 

Resource:

NPR interview on new freeze law

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