Your credit score defines you to potential lenders, providing a glimpse at your payment (or nonpayment) history. The underlying credit report gives details about your creditworthiness. This affects you every time you seek an auto loan or other line of credit.
A credit freeze, also known as a security freeze, is a means to restrict access to your credit report. To execute a credit, or security, freeze is as simple as three phone calls, and it does not cost a dime. Learn how to freeze your credit (and why you might need to) for free and with minimal effort.
Why you might need to freeze your credit
There are three main reasons why you might need to freeze your credit: concerns about identity theft, a potential data breach, or not wanting an individual or entity to see your credit report.
The threat of identity theft is when you think your secure information is compromised at an individual level, such as if your wallet is stolen. A data breach is similar but exists on a bigger level, such as the company you work for getting hacked. Finally, you just might not want an ex or someone else to be able to look at your credit.
How to freeze your credit
It used to cost money to freeze your credit. After the Equifax data breach of 2017, Congress passed legislation to provide free credit freezes to consumers. After all, if security can be compromised with a big name like Equifax, it clearly is easier to breach an individual’s security for nefarious purposes.
Freezing your credit is as simple as making three phone calls, one each to the major credit reporting agencies: Equifax, Experian, and TransUnion. Here are the numbers to dial.
- Equifax: 1-800-349-9960
- Experian: 1-888-397-3742
- TransUnion: 1-888-909-8872
Simply ask the representative on the other end of the line at each agency to begin a credit freeze, provide some identifying information to prove your identity, and it will be done.
Implications of freezing your credit
When you freeze your credit, that freeze remains in effect until you lift it. The three credit reporting agencies cannot release any of your credit information, whether for a home loan, credit card, or to finance a car. If someone tries to open an account as you, they are likely to be denied, stopping the attempt at identity theft in its tracks.
Since the credit reporting agencies cannot release information about you, this makes it more difficult for you to open new accounts. It is not impossible, however. You simply must lift the credit freeze long enough for a desired credit check to complete. Then, you may opt to freeze your credit again with Equifax, Experian, and TransUnion.
How to lift a credit freeze
Lifting a credit freeze follows the same process as creating a freeze in the first place. Call each of the three credit reporting agencies and request that the freeze be lifted. This allows them to release your credit report again.
There are alternatives to freezing your credit entirely. You could simply monitor your credit report more closely. On an annual basis, you can request a copy of your credit report from each of the three credit reporting agencies.
For closer monitoring, there are free and paid services available that alert you when there are changes to your credit report. While this may not be as secure as a total freeze, it does give you a heads up when there are issues to dispute. That way, you are alerted to fraud and can address it appropriately.