Last year’s data breach at Equifax led to many financial articles and related conversation calling for consumers to immediately place a “credit freeze,” also known as a security freeze, on their credit reports as a quick and effective way to help protect against someone else opening an account under their name.
As follow-up to this initial wave of credit freezes becoming popular, we have created an overview to help you make an informed decision in the future. Or, if you have already used a credit freeze, how does this impact applying for credit-based items, such as loans, and when should you consider removing?
Here’s our take on what you should be considering:
What does freezing your credit mean?
Requesting a freeze on your credit means the primary credit bureaus, Equifax, Experian, and Trans Union, will no longer release your information to potential lenders who make a legitimate inquiry. Freezing your credit, however, will not block authorized creditors and debt collectors from requesting your credit information. Also, you can continue to access your own credit records.
The main benefit of using a credit freeze?
A credit freeze guards against potential identity thieves and other unauthorized users from accessing your credit report to open new accounts.
The main drawback of using a credit freeze?
Applying and getting approved for a loan takes more time because potential lenders will not be able to immediately access your credit report with your credit being frozen.
It’s important to keep in mind, especially for larger loans like vehicles or homes, if you request a credit freeze, your lender may be “stuck” to advise and/or work with your loan request until the freeze is removed.
How to freeze your credit
Removing a credit freeze
Information to know
Credit Bureau Contact Information
Trans Union: 888.909.8872
You can get a free copy of your credit report once a year at annualcreditreport.com.
To learn more about protecting your personal/financial information visit idtheftcenter.org.
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