A credit freeze allows an individual some control on how a consumer reporting agency allows access to your credit report and credit history. With the rise of identity theft, a “credit freeze” is a tool that can allow you to block your credit file from anyone who tries to open a new line of credit with your vital information. Anyone who has spent months, if not a year, unraveling fraudulent use of their credit will tell you that the inconvenience of putting a credit freeze on your credit file is far outweighed by the peace of mind. It is important to understand how a freeze works, what it cannot prevent, and how it can affect aspects of your financial life.
What It Is
It is a block on your credit file to prevent identity theft or unwanted credit checks. The credit freeze locks the data at the consumer reporting agency until an individual gives permission for the release of the data. It’s intended to prevent criminals and fraudsters from opening new lines of credit if vital information has been compromised. It cannot undo the damage done. It is free if you have a police report that documents a recent unauthorized use of your credit profile. If you want to do it to prevent identity theft, there will be a small fee. Some of the credit reporting agencies may also refer to the process as a security freeze.
What It Means
A credit freeze or security freeze will prevent the credit reporting company from reporting your credit file to third parties, such as credit grantors and other companies and agencies, except those exempted by law or those for whom you contacted us and requested that we temporarily lift the freeze. Since the credit freeze places a block in the process of issuing credit, new creditors, employers, and landlords will not have access to your credit report. If they make a request to view your credit report, they will simply receive a message or a code that indicates that the account has been frozen. It is important to plan ahead since the lenders almost always need to see a borrower’s credit report to grant a loan or extend credit and it will be unlikely the lender will issue a loan in the borrower’s name if they can not see the credit history and credit report. So if you do this you will not be able to obtain any new credit for a new cell phone, a car loan or anything else.
How it Works
To execute a credit freeze, you must write to the individual credit bureaus at the addresses listed below. Send your letter by certified mail. If you’re married, you and your spouse will need to send separate letters and payments to place a freeze on your accounts. There is no method to freeze all three credit bureaus in every state – though that should happen soon. So you need to contact each one and pay a separate fee.
When the credit bureau receives your letter, they have five business days to place the freeze on your account. They will give you a PIN number from your creditors, which you will need to lift the freeze in the future. You‘ll have the option of lifting a freeze temporarily or permanently, on one account or all accounts. If you choose to lift a credit freeze, you can do so by phone, using your PIN number. The credit bureaus have three business days after receiving your phone request to lift the freeze. If you think about this, waiting three more days to buy a car is not that inconvenient.
A credit freeze will not lower your credit score. If you’ve been the victim of identity theft recently, you should seriously consider a credit freeze until you get things sorted out, as it will prevent further damage to your credit score. You, your existing creditors, collection agencies working on their behalf, and government agencies are still able to access your credit report after it has been frozen.
Equifax Security Freeze
P.O. Box 105788
Atlanta, GA 30348
Experian Security Freeze
P. O. Box 9554
Allen, TX 75013
TransUnion Security Freeze
P. O. Box 6790
Fullerton, CA 92834-6790