Criminals only need a few key pieces of information — such as your name, address, Social Security number or credit card number — to steal your identity.
Choosing to place a credit freeze — or not — will depend on how confident you feel that your personal information is safe from criminals.
In a world where data breaches are commonplace, you can hope nothing bad happens to you and ignore it, or you can take action now to protect your credit and financial wellbeing.
how it works
A credit freeze prevents lenders from checking your credit in order to open a new account.
So, if a criminal has your personal information and tries to open a credit card in your name, a credit freeze will stop the lender from checking your credit and they won’t issue the new credit line. Pretty straightforward.
If you have a credit freeze in place, you must remove it to apply for credit.
The process
You’ll need to apply for freezes from all three credit bureaus for full protection. But all you need to do is visit their websites and follow a few simple steps:
- Equifax: Equifax.com/personal/credit-report-services/
- Experian: Experian.com/freeze/center.html
- TransUnion: TransUnion.com/credit-freeze
I froze on my credit for each of the credit bureaus and the steps to complete the freeze was relatively the same for all three:
- Put in contact information
- Set up an account with that bureau
- Verify identity by answering a few questions that only you would know the answers to
I timed the process to see how long it would take. It only took 20 minutes total for all three credit bureaus.
You’ll get a unique PIN from each buruea that you’ll need to have whenever you want to temporarily lift or permanently remove your credit freeze.
Make sure you keep these PINs in a safe, but easily accessed, place in case you want to apply for a new credit card or loan. You’ll need it!
Keep in mind that freezing your credit will not affect your credit score and it’s totally free!
The only potential downside is the extra time it will take to temporarily un-freeze your credit if you want a new loan.
An inconvenience I’m willing to take for the security a freeze provides.
Freeze your child’s credit too
Parents also have the right to freeze their minor children’s credit too. The process is relatively the same as freezing your own credit, but there are a few more forms to prove that you’re the parent.
Children are cybercriminals number one targets because they have something a lot of us don’t have. A clean slate.
Pair this with the fact that most parents wouldn’t think to run a credit report on a child and you can see how they can be especially vulnerable to identify theft.
There was an expert on cybercrime at a conference I recently attended and they told a story about an 18-year-old they knew who applied for a car loan but was denied because he had $800,000 of debt and 42 credit cards tied to his Social Security number.
It turns out someone stole his identify when he was 2 years old and been using it for over 16 years.
Luckily he and his parents were able to undo the damage, albeit after two years of constantly working with the three credit bureaus.
Continue to monitor
While a credit freeze doesn’t prevent all forms of identity theft, it does add one more layer of protection.
You should still request your free annual credit report to verify the the accounts you already have open and look for any questionable activity.
I also suggest enrolling in a credit protection service and identity theft monitoring service. The cost of these services is usually very low for the benefits – which typically includes instant alerts of any questionable activities under your identity.