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Freezing Your Credit—A Brief Guide

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

  • You’ll need to contact the primary credit bureaus separately (Equifax, Experian, and Trans Union) and request a credit freeze; all three bureaus are necessary to ensure your credit reports are covered in full.
  • Each credit bureau will send you a confirmation with a Personal Identification Number (PIN) as secure reference for your requested credit freeze.

Removing a credit freeze

  • You’ll need to request a temporary (known as a “thaw”) or permanent removal of your credit freeze, through the three credit bureaus, so potential lenders/creditors can review your credit report.
  • Depending on your state law, the credit bureaus are required to unfreeze your credit within a specified time frame; time frames can vary from within an hour up to three days.
  • The removal of the credit freeze can be done for a set amount of time or for a specified creditor; once the review of your credit takes place, the freeze goes back in place.

Information to know

  • A credit freeze does not negatively affect your credit score.
  • Freezing credit is for protecting access to your credit information moving forward; existing creditors can continue to review your credit report to assess your current loans/lines of credit.
  • A credit freeze won’t protect your credit, debit, and/or ATM cards if they are lost or stolen.
  • Because removing a credit freeze takes time, you may want to hold off on your request if you know you’ll be applying for a loan or having your credit reviewed; once your credit is frozen, a quick response for review of your loan and/or approval is highly unlikely.

Credit Bureau Contact Information
Equifax:  800.349.9960
Experian:  888.397.3742
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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