What is a Credit Freeze?
A credit freeze, often referred to as a security freeze, prevents new accounts from being opened in your name without your permission to help protect you against fraud.
How Does it Work?
Most lenders cannot view your credit reports if your credit is frozen. Meaning they cannot extend you credit or, more importantly, extend credit to someone else pretending to be you.
The best part is it’s absolutely FREE!
That sounds amazing, and it is; however it will also make it impossible for you to get approved for credit until the freeze is lifted.
Will a Credit Freeze Hurt My Credit Score?
No, it will have no impact on your credit score. I wish all financial planning topics were that easy. 🙂
How to Freeze Your Credit
You will need to freeze your credit individually with all three credit reporting agencies, Experian, Equifax, and TransUnion.
Each credit reporting agency will require you to set up a username and password to access their site. Then when setting up the credit freeze, you will be issued a pin that will be required to remove the freeze and re-set up the freeze. Do NOT lose this pin!
You also can set up via telephone or request a freeze via mail if you are not comfortable managing online.
|Credit Agency||Website||Freeze Page||Phone Number|
|Experian||https://www.experian.com/||Freeze Page||(888) 397-3742|
|Equifax||https://www.equifax.com/||Freeze Page||(888) 298-0045|
|TransUnion||https://www.transunion.com/||Freeze Page||(888) 909-8872|
Please keep in mind you will need to set up freezes for each significant other in your relationship. For example, I set up online profiles and freezes for my wife and me.
How to Unfreeze Your Credit
It’s precisely the same steps explained above in How to Freeze Your Credit.
A few best practices, when you are getting ready to unfreeze your credit, I do not recommend unfreezing all of them at once. Find out from the lender what credit agency they use and will need to pull your report from and just unfreeze that agency.
For example, let’s say you are car shopping. Ask to speak with the finance manager and determine if they use Experian, Equifax, or Transunion. If they say we use Transunion to pull your credit, simply go to the Transunion Freeze page and unfreeze your account.
You will have the option to remove the freeze temporarily or permanently. If you choose temporarily, you will select a date to re-activate the freeze. This could potentially leave you vulnerable until the freeze is re-activated.
My preferred method is to select permanently, and then once my credit is run, I will re-setup the freeze. Just make sure you don’t forget!
Advantages of Freezing Your Credit
Disadvantages of Freezing Your Credit
You Need to Do More
A credit freeze is a great tool, and I recommend everyone set them up, as I did, but you need to be doing more to protect your credit.
I recommend two other excellent free tools: first, accessing annual copies of your credit reports free from AnnualCreditReport.com.
Second, set up a free account with Credit Karma. You will be able to access credit scores from Transunion and Equifax and get alerts when there are changes or updates to your reports.