5 Times You Must Freeze Your Credit Report

By Andrea Cannon on 15 March 2016 0 comments

No one should have access to your credit report without your consent. A security freeze can help prevent a credit reporting company from releasing your credit report, which prevents new creditors and third parties from being able to view your report and score. Consider the following circumstances in which freezing your credit report might be appropriate.

1. You're a Victim of Identity Theft

If you believe you have been a victim of identity theft or that someone is making charges to your accounts without your consent, then it's time to place a freeze on your credit report. In fact, depending on your state security freeze law, you may even be eligible for free security freeze services.

On average, victims of identity theft need to spend about 40 hours to clean up their credit once a thief has opened an account in their name. With the security freeze in place, you won't have to worry about that, because it prevents new accounts from being opened. (See also: The Comprehensive Guide to Identity Theft: Everything You Need to Know)

Keep in mind that placing a freeze on your credit file only prevents a fraudster from opening new accounts in your name. It doesn't prevent them from accessing any of your existing credit cards. While new creditors will not be able to access your account, it's important to remember that businesses that you already have an existing relationship with can still access your credit history.

2. You've Been Subjected to a Security Breach

Even if you aren't currently a victim of identity theft, but are concerned that your information may be released to people or companies without your consent, you can block access to your credit report with a freeze. If you have reason to believe that you may soon be a victim of identity theft, then a freeze may be the right preemptive step to ensure you don't have big problems in the near future. For instance, if your wallet or mail were stolen, or your social security number was part of a security breach, then placing a security freeze on your file will prevent a thief from using your information.

If only your credit or debit card information has been stolen, a security freeze is not necessarily vital. In these cases, you may be better off simply requesting credit monitoring services, placing a fraud alert, or freezing those particular cards so that no one can use them.

3. You Don't Need Credit Right Now

If you believe you won't need to apply for credit anytime in the near future, and want to gain maximum control of your credit score, a security freeze may be appropriate for you. The advantages of a credit freeze increase with age because as people get older, they generally don't need credit as much. Therefore, placing a freeze on your account will just ensure that nobody else can apply for credit in your name, either.

4. You're Going Through a Messy Divorce

Many people involved in messy divorces place a freeze on their credit. This ensures that your spouse is not able to open any new accounts with your identity, as they will likely have all of your personal information.

5. You're Protecting Your Child's Credit

Have you ever received credit card offers in the mail for your children? You may consider placing a protected credit freeze on their file to prevent any fraudulent accounts from being opened in their name. A protected consumer freeze can be requested by the parent or legal guardian of a minor or medically incapacitated consumer.

How to Place a Security Freeze on Your Credit File

You can place a freeze on your credit files at each of the three major credit reporting agencies, Equifax, Experian, and TransUnion. You can follow a simple online process, request the freeze by phone, or submit your request in writing. Keep in mind that you will need to follow this process for all three credit bureaus. At minimum, you will need to supply your name, address, social security number, date of birth, and other basic personal information.

Once the freeze has been placed on your account, your credit report will be inaccessible unless you provide specific authorization with a password or 10-digit personal identification number (PIN). The freeze will remain on your credit file until you request that it be removed.

The Costs Involved

In most cases, it will cost $2–$15 per person, per bureau to freeze your credit report. However, the fees will vary by state and scenario. For instance, some states won't charge people over age 62 or under age 19, so you should refer to your state's data.

Temporarily Lifting the Freeze

Once you receive the password or PIN for your account, you will be able to authorize the temporary release of your credit report for a specific period of time or for a specific person. You can request that the freeze be lifted for anywhere from one day to one year. Keep in mind that you will need to contact all three credit bureaus to request that the freeze be temporarily lifted.

Applying for New Credit

According to Experian, having a security freeze can affect the approval of any request or application for "a new loan, credit, mortgage, insurance, government services or payments, rental housing, employment, investment, license, cellular telephone, utilities, digital signature, Internet credit card transaction or other services, including an extension of credit at point of sale." If you are considering applying for credit, keep in mind that a security freeze can slow down the application. Try removing the freeze at least three business days before applying for new credit.

Don't Take a Credit Freeze Lightly

Keep in mind that a credit freeze is a major step that will completely remove you from the credit marketplace, so it should only be pursued on an as-needed basis. For instance, if you've applied for a new job or apartment and they need to see your credit file, having a freeze in place will result in unnecessary delays. On the other hand, it will not adversely impact your credit score or your chances of getting credit once the freeze has been lifted.

Have you ever placed a freeze on your credit report? Please share your experience in the comments!

0
No votes yet
Your rating: None
ShareThis

Disclaimer: The links and mentions on this site may be affiliate links. But they do not affect the actual opinions and recommendations of the authors.

Wise Bread is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to amazon.com.


Guest's picture
Jay north

Very evident post to take a note of, as every precaution added with surveillance needs to be taken to work on credit report. As any lapse to it can add to many troubles, due to which correct step should be taken at the time of any wrong update.