Whether you’re repairing your credit in the wake of identity theft and fraud, or you’re trying to prevent it, a credit freeze – also known as a security freeze – could be a good fit for you. With a credit freeze, no creditors will be able to access your reports, or generate credit scores based on those reports. This should prevent identity thieves from opening new accounts in your name. That said, a credit freeze does have its shortcomings. Weigh the pros and cons, then follow these steps if it seems like the right thing to do.
UPDATE: In the wake of the Equifax hack, it is recommended that you place a credit freeze on all of your credit reports and keep it there. (Just be prepared to unfreeze and then refreeze when you need to apply for credit.)
Pros of a credit freeze
Restricts access to your credit reports
If someone tries to open a new credit account in your name, a credit freeze will prevent the credit check necessary to consider the application. However, restrictions on credit reports do not apply to your existing creditors, debt collectors collecting for your existing creditors, or government agencies under certain circumstances (e.g., court or administrative order, subpoena, search warrant), all of which will still be able to access your credit file. You will also continue to receive prescreened credit offers, unless you opt out.
You can still see copies of your own credit reports
Every 12 months, you are entitled to see your credit reports for free through AnnualCreditReport.com. Placing a freeze on your credit does not jeopardize this access. You can either request all three credit reports at once or stagger them throughout the year. Beyond that, you can continue to use any credit monitoring service that you had in place prior to the credit freeze.
It won’t hurt your credit score
Your creditors can still report your credit activity to the credit bureaus, and the bureaus can still update your credit reports accordingly. So it continues to be important for you to practice good credit-building habits. Plus, you’ll be protecting your credit score from the potential damage done by thieves opening new credit accounts in your name (and the subsequent credit repair process to straighten things out).
Gives you peace of mind
While there is no guaranteed way of preventing identity theft, a credit freeze is one of the most effective preventative measures you can take. Most creditors will not extend new credit without access to your credit reports or scores. This makes a credit freeze an invaluable tool in protecting yourself, whether you have already been a victim of identity theft or not.
Cons of a credit freeze
Doesn’t prevent fraudsters from using existing credit accounts
The only thing a credit freeze helps protect you against is the creation of new credit accounts. If someone gets their hands on your credit card information, they could still use it to make fraudulent charges. That’s why it’s so important to keep a close eye on your existing accounts – by reviewing your statements and signing up for credit monitoring services – to catch unauthorized transactions as soon as possible so you can to minimize the damage.
You’ll have to lift the freeze when you do want someone having access to your credit reports
The same freeze that prevents other people from opening new accounts in your name will prevent you from doing the same. Every time you need someone to check your credit for a credit card, loan, rental car, new car insurance, new utility account, new cell phone plan, or the like, you’ll have to lift the freeze before your credit can be checked.
Temporarily lifting a credit freeze isn’t difficult, but it can be annoying. Under the best of circumstances, you need to request the lift in advance of your credit application to give the credit bureau(s) time to unfreeze your credit. Under the worst of circumstances, if you can’t find the PIN they gave you to lift the freeze, you’ll have to go through the process of requesting a new one.
You won’t be able to register for new credit monitoring services while the freeze is in place
If you haven’t already, sign up for credit monitoring before you request a credit freeze. If you wait, the credit monitoring service won’t be able to access your credit once the freeze is in place.
Credit Karma – one of our top picks for free credit monitoring services – says even a temporary lift of the freeze won’t work. If a freeze is in place and you want to sign up for their credit monitoring service, you will have to remove the freeze entirely, register for their credit monitoring, and then request a new freeze again. But once credit monitoring permission is granted (while no freeze is in place), Credit Karma (and presumably other credit monitoring services you might use) will continue to have the permission necessary to monitor your credit without a problem.
Steps to freeze credit
1) Contact each credit bureau
To freeze all three of your credit reports, you must contact each credit bureau separately. You can request a credit freeze online, by phone, or by mail:
Call: 1-888-909-8872
Mail:
TransUnion LLC
P.O. Box 2000
Chester, PA 19022-2000
Call: 1-888-397-3742
Mail:
Experian Security Freeze
P.O. Box 9554
Allen, TX 75013
Call: 1-800-685-1111 (NY residents: 1-800-349-9960)
Mail:
Equifax Security Freeze
P.O. Box 105788
Atlanta, GA 30348
Call: 1-800-540-2505
By phone: 800-887-7652
By fax: 414-341-7445
By mail:
ChexSystems, Inc.
Attn: Security Freeze Department
7805 Hudson Rd, Suite 100
Woodbury, MN 55125
2) Verify your information
Before a credit bureau can freeze your credit, they first must verify your identity. Expect to provide the following information when making your credit freeze request:
- Name
- Social security number
- Date of birth
- Current address
- Previous addresses
- Email address
- Copy of proof of identification (e.g., driver’s license)
- Copy of a bill or statement
Use the links above to find credit freeze instructions specific to each credit bureau.
3) Pay any necessary fee
You are exempt from a credit freeze fee if you were a victim of identity theft and you filed a police report. Some states also offer free credit freezes to:
- All consumers
- “Protected consumers” (minors under the age of 16 or incapacitated consumers who have an appointed guardian or conservator)
- Seniors
- Domestic violence victims
Otherwise, expect to pay anywhere from $3 to $15. Just keep in mind, that’s per bureau, meaning it could cost $9 to $45 to freeze all three of your credit reports from TransUnion, Experian, and Equifax.
“Forty-seven states and the District of Columbia have laws that govern the procedures and requirements for security freezes and how much you can pay for them,” says the Consumer Financial Protection Bureau. “For the remaining states (Alabama, Michigan, and Missouri), the nationwide credit reporting agencies have voluntarily given residents the opportunity to place freezes.”
See fee breakdowns, by state, from TransUnion, Equifax, and Experian.
4) Put your PIN in a safe place
Upon receipt of your request, each credit bureau will send you a letter confirming the credit freeze. File it away in a safe place, as it will contain a PIN that you’ll need when you want to unfreeze your credit. Though losing it doesn’t mean you’ll never be able to have the freeze lifted, those who have been through it say it can be a frustrating process, so take the necessary precautions to keep your PIN safe.
If you lose your:
- Experian PIN, you can request a new one online
- Equifax PIN, you will have to request a new one in writing through the mail
- TransUnion PIN, call TransUnion for help: 1-888-909-8872
Note, you may be required to pay a fee for a replacement PIN.
How to temporarily lift a credit freeze
You can request that your credit freeze be temporarily lifted, an invaluable tool whether you need to grant access to a specific creditor or several of them over a period of time. That said, temporary lifts are not available in all states or in all circumstances.
For instance, Equifax states that, in Arizona, a date range lift is not available to “protected consumers” and a specific party lift is not available to anyone.
If you are unable to get a temporary lift in your state, you can always request complete removal of a credit freeze using the same contact information below.
1) Find out which credit bureau the creditor is going to check
Why lift the credit freeze through all three credit bureaus when the creditor is only going to check one? It’s not only a hassle, but could cost you additional lift fees unnecessarily. If you don’t know which credit bureau a creditor is going to check, ask.
2) Contact the credit bureau
Call: 1-888-909-8872
Mail:
Fill out the Lift section of the form that was mailed to you with the confirmation letter you received after requesting the initial credit freeze. Send it to the address provided on the form.
Lift Experian Credit Freeze
If you do not want to request a lift online, call Experian for help at 1-888-397-3742
Call: 1-800-685-1111 (NY residents: 1-800-349-9960)
Mail:
Equifax Security Freeze
P.O. Box 105788
Atlanta, GA 30348
3) Be prepared
When making your request for a temporary lift, you will be asked for:
- Your PIN
- Whether you are requesting a lift for a date range or a specific credit grantor (if available)
- Any necessary lift fee (which varies by state and situation)
4) Don’t expect immediate results
Upon receipt of your request, the credit bureau has 3 business days to lift the freeze. So don’t expect to make the request and have the freeze lifted right away, even if you do so online or over the phone. Security expert Brian Krebs says it usually happens within 24 hours, but don’t count it. Just to be safe, make sure the request is made at least 3 business days prior to the lift start date you need.
Credit freeze vs. fraud alert
Though both can be helpful tools in protecting yourself against identity theft, there are some major differences between a credit freeze and a fraud alert.
1) Credit report access
While a credit freeze will prevent access to your credit reports, a fraud alert does not. Creditors can still look at your credit, but when they do they will see the fraud alert letting them know they should contact you for verification before extending credit, just in case you weren’t the one to apply.
Unfortunately, there is no guarantee a creditor will, in fact, honor the fraud alert and contact you accordingly. As Krebs reports, “While lenders and service providers are supposed to seek and obtain your approval before granting credit in your name if you have a fraud alert on your file, they’re not legally required to do this.”
Adam Levin, author of Swiped, shared a similar concern about fraud alerts with NBC News’ Herb Weisbaum: “A lot of lenders, regardless of what they’re supposed to do, don’t take the time to check…. A credit freeze isn’t a silver bullet, but it’s certainly better than a fraud alert.”
2) Cost
Credit freezes often come at a cost. Fraud alerts are always free.
3) Options
There is only one type of credit freeze and it stays in place until you remove it. Fraud alerts come with more options:
- An initial fraud alert lasts 90 days, which you can renew indefinitely
- An extended fraud alert lasts 7 years
- An active duty military alert lasts 1 year
4) Credit bureau sharing
While you must request a credit freeze of each credit bureau separately, fraud alerts are shared automatically. When you request a fraud alert through one bureau, they notify the other two bureaus for you.
Is a credit freeze for you?
If you’re still on the fence about it, consider the advice of the Public Interest Research Group (PIRG). As Weisbaum reports, U.S. PIRG “now advises everyone to put freezes on their accounts, even if they haven’t had their sensitive personal information stolen.”
Learn more about identity theft.
