What's a Credit Freeze and When Should I Use One?

A security freeze prevents potential creditors from accessing your credit history, which stops criminals from getting credit in your name.

The Equifax data breach in 2017 affected up to 147 million people. Social Security numbers, birth dates, addresses, and driver's license numbers were all exposed in the hack. If your personal information was part of this data breach or someone has stolen your identity (or you have reason to believe that you're likely to become the victim of identity theft), you should initiate a credit freeze. A credit freeze prevents a thief from opening up accounts in your name and ruining your credit.

Read on to learn how a credit freeze works, when to use a credit freeze, and how to initiate a freeze.

Understanding Credit Freezes

A credit freeze—often called a security freeze—basically seals your credit history. The freeze prevents a credit reporting bureau from releasing your credit information to a third party. So, if a thief tries to use your Social Security number and other personal information to apply for mortgage loan or other form of credit, the creditor would reject the application because it couldn’t check your credit.

Exceptions to the Freeze

A credit freeze generally doesn't have an impact on your existing accounts.

Existing creditors can still access your credit history. Even under a credit freeze an existing creditor can have access to your credit report for certain types of account review, collection purposes, fraud control, or related activities. For example, the following entities may still access your credit report during a freeze:

  • a collection agency acting on behalf of an existing creditor, and
  • state or local agencies, such as law enforcement and child support agencies.

A credit freeze doesn't affect your current accounts, like your credit card accounts. A common misconception is that a credit freeze means you can’t use your current forms of credit, such as a credit card. But freezing your credit file does not affect your ability to use your existing accounts. (It also won't prevent misuse of your current accounts.) Your credit report is not accessed when you make a purchase with a credit card. A credit freeze only pertains to new credit applications. This means that you can still use your existing credit cards to make purchases during a credit freeze. Though, if the thief stole your credit card information, that person can use your existing credit card during a credit freeze as well. Remember, scammers don’t need to access your credit report to charge purchases to an already existing account. So, you do need to report the theft to your credit card issuer and get a new card in these circumstances. (Learn more about what to do if your identity is stolen.)

When to Use a Credit Freeze

It is generally advised that you request a credit freeze at the three national credit reporting agencies—Equifax, Experian, and TransUnion—if:

  • you know someone has stolen your identity
  • you've been told that your personal identifying information has been compromised (again, as in the case of the Equifax breach)
  • if you suspect someone has stolen your Social Security number and other information, like your date of birth, that can be used to open credit in your name, or
  • you want to be especially cautious when it comes to your credit files.

(To find out if your personal information was compromised as part of the 2017 Equifax breach, go to www.equifaxsecurity2017.com.)

How to Set Up a Credit Freeze

You may request a security freeze by contacting Equifax, Experian, and TransUnion individually. You can make your request:

  • online
  • by certified mail, or
  • by calling the credit bureau.

You must make separate freeze requests with each credit bureau.

How to Temporarily or Permanently Lift the Freeze

The freeze generally remains in place until you choose to lift or "thaw" it. When you place a credit freeze on your file, you will receive a personal identification number (PIN) or password that you can use to permanently lift the freeze, or temporarily lift the freeze for a specific party or period of time.

Under federal law, the bureau must lift the security freeze not later than:

  • if you make the request by toll-free telephone or secure electronic means, one hour after receiving the request for the lift, or
  • if you make the request by mail, three business days after receiving the request. (15 U.S.C. § 1681c-1).

Cost to Set Up a Credit Freeze

In the past, the cost of imposing a credit freeze varied between states, and typically ranged between $3 and $10 for each credit reporting agency. There also generally used to be a small fee for lifting the freeze temporarily or removing the freeze altogether.

Now, however, thanks to the federal Economic Growth, Regulatory Relief, and Consumer Protection Act (Senate Bill 2155), placing and lifting a credit freeze is free in every state. (15 U.S.C. § 1681c-1).

Getting Help

To learn more about how to protect yourself if someone steals your identity or what to do after your personal information is compromised in a data breach, go to Identitytheft.gov and Identitytheft.gov/databreach. Identitytheft.gov is the federal government’s main resource for identity theft victims. At this website, you can get a personal recovery plan, find sample letters to send to your creditors, and get an Identity Theft Report. The website also provides valuable information about what to do after your identity is stolen, other possible steps you should take, and specific instructions for certain accounts such as utilities, phones, government benefits, checking accounts, etc.

If you need help dealing with collectors or if you're being sued because a thief used your identity to incur debts, talk to an attorney.

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