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How to Freeze Your Credit

Credit Cards, Credit Score, Personal Finance
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Frozen man

If you’re considering a credit freeze, chances are you’re feeling exposed and vulnerable to predators trying to take advantage of your good credit.

Perhaps you were a victim of identity theft or had your personal information compromised in a data breach. Another instance to consider a freeze is in a divorce, so that your soon-to-be-ex-spouse doesn’t start opening up accounts that you’ll be responsible for.

Two levels of added security

If you believe someone may have the ability to apply for credit in your name without authorization, there are two levels of additional security you can place on your credit reports. The first level of security is a “fraud alert.” In this case, creditors are asked to verify your identity before any credit is issued in your name. This is a good step if your credit cards are stolen, or your wallet goes missing. Because the information requested often contains information a wallet thief or credit card skimmer won’t have, it’s a good first step.

The next level of security is putting a “credit freeze” on your credit reports from each of the credit bureaus: Experian, Equifax and Transunion. This literally locks up your credit file. Nobody can access it unless you give direct authorization yourself to the credit bureaus, which is usually accomplished through a PIN or password. It has no affect on your credit score. If you have any concerns at all about identity theft, especially if it involves the all-important Social Security number, establish a credit freeze.

Freeze: What’s hot, what’s not

Once that freeze is in place, it will make life safer for you, but also more inconvenient. It will very likely delay, or possibly prevent, you from getting a quick or timely approval of any credit. This includes mortgages, car loans, cell phone plans, utilities, apartment rental applications and even insurance. So be aware of the pitfalls in this regard.

The good news is that you can lift that freeze at any time, although you need to weigh the risks of doing so against the risk of having credit opened in your name. You can call the credit bureaus or write to them and provide the information they request.

The cost is relatively low for a freeze — maybe $10 or $20 (and in some states it is free for identity theft victims or senior citizens).

Thaw before serving

Remember, however, that placing a credit freeze on your accounts doesn’t make you immune to identity theft. Criminals can still get at your credit card information via skimming or outright theft of the card, or if they get ahold of your passwords.

Also remember that you must freeze reports from all three credit bureaus, and when you are ready to lift the freeze, you must contact them each again.

Finally, it can take time to “thaw” your credit. So if you are in a hurry to get that locked mortgage rate approved, plan to release that freeze well ahead of time. Check with each bureau to see how long it will take.

Frozen man. Image via Shutterstock