Should You Freeze Your Credit?

Freezing your credit will mean scammers can’t steal your identity and open new accounts in your name. But is it the best way to protect your money?

It’s quite cold outside. So cold, in fact, that your credit might just freeze!

Just kidding. It’ll take more than leaving your credit in the snow to freeze it. But what does freezing your credit even accomplish? And should you do it? And how would you do it?

Those are the questions we’re here to answer. So chill out, cause we’re talking credit freezes.


What does it mean to freeze your credit?

Wouldn’t it be … ice … to keep your credit score to yourself? Well, you can! At least temporarily.

“What is a credit freeze?” asked Robert Siciliano (@RobertSiciliano), Security Awareness Expert and CEO of Safr.Me, rhetorically. “It’s an action you take to lock down your credit report. A lender can’t see your score, which means your Social Security number and credit rating is useless to them. In other words, they can’t tell if you are risky or not.

“When an identity thief can access your ID (aka your Social Security number), they can also create credit in your name. However, if your credit file is frozen, the bad guys can’t access it any longer. With a credit freeze, your credit file is inaccessible.”

Should you freeze your credit?

As you might have been able to gather from context, one of the main reasons to freeze your credit is if you’re worried you’ve been the victim of identity theft.

“The very best thing you can do to protect yourself from many forms of identity theft is to put a credit freeze on your credit report at each of the three major credit reporting agencies,” recommended Steve Weisman, lawyer, author, and identity theft expert who writes at Scamicide (@Scamicide).

“Having a credit freeze on your credit reports at the three major credit reporting agencies, Equifax, Experian and TransUnion, will prevent criminals from accessing your credit reports in order to open accounts, access credit or make major purchases in your name even if the criminal has your Social Security number and other personal information.

“Particularly due to the fact that with large numbers of data breaches including the massive data breach at Equifax, your Social Security number may already be in the hands of an identity thief so freezing your credit is important.”

But surely freezing your credit must have some major disadvantages, right? Not necessarily!

“With data leaks becoming increasingly common, it makes sense to freeze your credit,” explained Austin Grandt, founder of Financial Toolbelt (@fintoolbelt). “If your social security number gets leaked, it is possible for someone to open accounts in your name if your credit isn’t frozen. Freezing your credit is a precaution that does not cost you anything and can save a lot of headaches in the future.

“If you are curious if your information has been a part of any hacks, use the tool Have I Been Pwned. This will give you some context about the extent of data leaks and help you make an informed decision if you want to freeze your credit or not.”

How do you freeze your credit?

OK, so this freezing your credit business sounds like it can be a good way to deal with identity theft. But how do you do it?

“Freezing your credit is not an inconvenience, explained Siciliano. “It only takes a couple of minutes to freeze and unfreeze your credit file. Of course, you need to unfreeze before getting approved for credit. That simply means prior to initiating an application for credit, you need to spend 5 minutes administrating the thaw.

“This boils down to a simple change in the current process which makes you more secure. Think of a freeze as putting on your seatbelt. It’s just something you have to do. To freeze your credit with Equifax, click here. To freeze your credit with Experian, click here. To freeze your credit with Transunion, click here.”

And you’re sure it won’t cost anything?

“The cost to freeze your credit was between $0 and $10 per credit bureau agency, the cost depending on the law in your state,” Justin Lavelle, Chief Communications Officer at BeenVerified (@BeenVerified), told us. “However, since September 21, 2018, there’s been no cost to place or lift a credit freeze.

“The removal of the fees doesn’t make the process easier; however, the removal of fees makes the process more attractive to consumers who were hesitant to pay a fee for placing a freeze and for each lifting of the freeze. The process has become faster since the credit freeze was first introduced several years ago. Presently, a freeze can be lifted in minutes via the internet or by phone.”

Are there alternatives to freezing your credit?

Freezing your credit isn’t the only way to counter identity theft, though each method has its own upsides and downsides.

“While various identity theft protection services are available from companies such as Lifelock and others, none of these companies protect you from identity theft,” warned Weisman. “They merely alert you to identity theft sooner than you would otherwise become aware of the problem and while that it is important, freezing your credit can actually prevent many instances of identity theft.”

You could also look at a credit lock. How does that differ from a credit freeze, you might ask?

“One difference is the simplicity,” Lavelle explained. “It’s easier to lift a credit lock than it is to lift a credit freeze. Once you freeze your credit report with the three credit report bureaus, you can only unfreeze it through the use of a PIN. Once you lock your credit report, you can unlock it at any point, instantly, via your computer or mobile.

“Another difference is the cost associated with each service. The credit freeze doesn’t cost the consumer. The credit lock service has a monthly fee, typically of $20. Finally, a credit freeze offers a legal advantage over a credit lock. State laws govern and mandate credit freezes whereas a contract between the consumer and the credit bureau mandates credit locks.”

And a credit freeze also offers protection that a fraud alert does not.

“A fraud alert only lasts for 90 days, and the bad guys can still access your credit file and apply for new credit,” warned Siciliano. “This informs a creditor that you might have had your ID stolen, but they can still, and do, issue credit. At their best, fraud alerts simply notify lenders that something might be going on with your identity. It’s really just a false sense of security.”

Hopefully, you now have a sense of what freezing your credit means and why you should do it. Now even if you’ve been exposed to a risk of identity theft, you don’t have to lose your cool. To read more about keeping your finances safe from potential scammers, check out these related posts and articles from OppLoans:

What other questions do you have about fraud protection? Let us know! You can find us on Facebook and Twitter.

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Contributors

Austin Grandt is the founder of Financial Toolbelt (@fintoolbelt), a site that helps millennials understand and improve their finances. He is also a software developer passionate about building tools that build financial literacy.
Justin Lavelle is a Scams Prevention Expert and the Chief Communications Officer of BeenVerified.com (@BeenVerified). BeenVerified is a leading source of online background checks and contact information. It helps people discover, understand and use public data in their everyday lives and can provide peace of mind by offering a fast, easy and affordable way to do background checks on potential dates. BeenVerified allows individuals to find more information about people, phone numbers, email addresses, and property records.
Robert Siciliano (@RobertSiciliano) is a #1 Best-Selling Author and CEO of Safr.Me. Safr.Me is funny but serious about teaching you and your audience fraud prevention and personal security. Robert is a United States Coast Guard Auxiliary Flotilla Staff Officer of the U.S. Department of Homeland Security whose motto is Semper Paratus (Always Ready). His programs are cutting edge, easily digestible and provide best practices to keep you, your clients and employees safe and secure. Your audience will walk away as experts in identity theft prevention, online reputation management, online privacy and data security.
Steve Weisman is a lawyer, college professor at Bentley University and author.  He is one of the country’s leading experts in identity theft.  His most recent book is “Identity Theft Alert.”  He also writes the blog Scamicide.com (@Scamicide) where he provides daily updated information about the latest scams and identity theft schemes.

The information contained herein is provided for free and is to be used for educational and informational purposes only. We are not a credit repair organization as defined under federal or state law and we do not provide "credit repair" services or advice or assistance regarding "rebuilding" or "improving" your credit. Articles provided in connection with this blog are general in nature, provided for informational purposes only and are not a substitute for individualized professional advice. We make no representation that we will improve or attempt to improve your credit record, history, or rating through the use of the resources provided through the OppLoans blog.