As recent data breaches have shown, you likely can’t prevent your personal information from being stolen. However, knowing what a credit freeze is and taking advantage of it can help protect you and your finances.
When you freeze your credit, it keeps sensitive data in your credit files from being accessed without your permission. While it can be mildly inconvenient, a credit freeze can help keep criminals from opening new accounts in your name, even if they have your personal information.
Freezing your credit is free, easy to do and won’t damage your credit score. It can be especially valuable to freeze your child’s credit to prevent problems in the future.
What is a credit freeze?
In 2021 the Federal Trade Commission received 1.4 million reports of identity theft. It totaled to approximately 25% of all fraud cases that year. One in five people lost money due to imposter scams in 2021, with a median loss of $1,000.
When you apply for credit, lenders typically pull your credit report to decide if and how much to give you. Credit freezes restrict access to your credit report. If lenders can’t see your credit file, they can’t approve the credit application.
Freezing your credit doesn’t affect your credit score. Under federal law, you can freeze or unfreeze your credit at any time. Just keep in mind that a few entities will still be able to access your report, including your current lenders, potential employers or landlords, child support agencies, government entities and other organizations.
You can temporarily lift or ‘thaw’ the freeze when you need to apply for new credit and put it back in place after you’ve been approved.
It’s also important to note that while a credit freeze can make it much harder for someone to open an unauthorized account in your name, it does not prevent identity theft on its own.
For example, if someone steals your credit card number, a credit freeze won’t stop them from making unauthorized purchases. Likewise, if a criminal steals your Social Security number, freezing your credit does not prevent them from falsely filing a tax return in your name or claiming government benefits to which you might be entitled.
In addition to a credit freeze, help protect your data by regularly monitoring your credit report and bank statements for fraudulent activity.
How do I freeze my credit?
Freezing your credit isn’t difficult, but it may take some time. To start, you must contact each of the three credit bureaus individually and request a freeze. You can do this online, over the phone or by mail:
- Experian: 888-397-3742; Experian Security Freeze , P.O. Box 9554, Allen, TX 75013
- Equifax: 888-298-0045; Equifax, P.O. Box 105788, Atlanta, GA 30348
- TransUnion: 888-916-8800; TransUnion, P.O. Box 160, Woodlyn, PA 19094
If you choose to start a freeze online, each credit bureau will have you set up a free online account. After logging in, you can verify your identity and enact or remove a freeze.
Completing the freeze online is generally the quickest option since you can freeze or thaw your credit in real time or within an hour of placing the request. If you choose to do it by phone or mail, the process may take up to three days after you make the request.
You’ll need to provide personal information to enact a freeze, like your:
- Full name
- Social Security number
- Date of birth
- Complete addresses for the last two years
If you request a freeze via phone or mail, you’ll need to answer additional questions to verify your identity. The credit bureaus will ask you to provide certain documents, like a current utility bill or bank statement showing your name and full address and a copy of your driver’s license or passport.
When should I freeze my credit?
If you suspect you’ve been the victim of identity theft or had sensitive information stolen in a data breach, it may be a good idea to freeze your credit to ensure there aren’t problems down the road.
Many people usually keep their credit frozen and only thaw it in specific situations like applying for a credit card, loan or mortgage. Since it’s free and relatively quick if done online, keeping it in place all the time can be one less thing to worry about.
If you discover fraudulent activity on your report or otherwise suspect someone is using your personal information to commit fraud, freeze your credit immediately to help prevent damage to your credit score and finances.
What are fraud alerts?
If you don’t want to freeze your credit completely, consider setting up fraud alerts instead. Fraud alerts generally last one year and require lenders to verify your identity before opening new accounts in your name. A fraud alert does not prevent new accounts from being opened and doesn’t keep creditors from viewing your existing accounts.
One benefit of fraud alerts is that you don’t have to contact each credit bureau separately. Placing a fraud alert on your information with one bureau automatically means that the agency must contact the other two on your behalf and request a fraud alert on your record across all three bureaus.
Should I freeze my child’s credit?
Although it’s extra work, freezing your child’s credit can offer your family peace of mind since it can take years to discover child identity theft. Children under 18 typically don’t have credit reports, which means they can be a blank slate for thieves and criminals. Plus, parents often don’t think to run credit reports on a child without a financial footprint.
Many cases of child identity theft involve criminals opening accounts in the child’s name and ruining their credit, which can take years to fix. Victims can even have difficulty applying for their first car or student loan. Depending on the information accessed, a criminal may even claim a child as a dependent on a fraudulent tax return.
According to a 2022 study by AARP and Javelin Strategy & Research, 1 in 80 children were the targets of identity theft. In addition, 1 in 43 had personal information exposed in a data breach from July 2021 to July 2022.
If you are the parent or guardian of a child under 16 or the legal guardian of someone who can’t manage their finances, consider putting a freeze on their credit reports. It can help prevent fraudsters from applying for credit or taking out loans in their name.
Placing a security freeze on your child’s credit report can take longer since you have to verify your and your child’s identity with all three credit bureaus and prove that you are the child’s parent or legal guardian.
You’ll need to provide the information listed previously, as well as the child’s birth certificate and Social Security card, any court orders or foster care certification if applicable, and any additional documents requested.
Bottom line
Freezing your (or your child’s) credit can feel like an extreme step. But it can help you prevent problems before they start. Although freezing your credit doesn’t guarantee your identity won’t be stolen, it can help block thieves from opening a new account and creating more of a mess.
In 2021, victims of fraud reported losing more than $5.8 billion in the U.S., an increase of $2.4 billion from 2020. Help protect yourself by regularly checking your credit reports and bank statements for suspicious activity. Freezing your credit can be inconvenient but can help prevent significant financial headaches.
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