When it comes to a credit freeze, consumers have to ask themselves when they should take this step, and why. The “when” is easy… the answer is NOW. There are very few reasons to leave your credit report unfrozen, all of them stemming from your life circumstances that involve high-volume spending, the need for new accounts or other similar, limited situations.
But “why”, is a little more difficult to explain. Your credit report is the document that gives lenders an idea of what kind of borrower you are. It contains lengthy information on your previous spending and payoffs, your open lines of credit, the amount of debt you carry, and more. However, this report is also the tool that lenders need in order to issue you a new account or line of credit; no report, no new credit card or car purchase.
It’s easy to see how blocking access to that report can prevent new lines of credit from being issued, and that goes a long way towards protecting you from fraud if someone steals or fabricates your identity. When the criminal applies for a new credit card, home utilities, a car or other similar account, the credit report will come back to the lender as “frozen,” essentially blocking the account.
This is one of the strongest measures consumers can take to help reduce their risk of financial identity theft. There are other ways your personally identifiable information fall into the wrong hands can harm you, but new account fraud is one of the easiest but most devastating scenarios. At the same time, there are not many other actionable steps consumers can take that can have this much of an impact on identity theft and fraud.
Remember when we said you should do it right now? There’s never been a better time. New legislation goes into effect this week that will remove the fees associated with freezing and thawing your credit report. Even though it takes time to “thaw” should you need it (a few business days, typically), you will no longer have to pay a fee for protecting your credit report this way. All three of the reporting agencies—Experian, Equifax, and TransUnion—will no longer charge this fee thanks to legislation that was passed after the Equifax data breach.
In order to freeze your credit, here are a few steps to take. While you handle that, remember that you’re also entitled to one free copy of your credit report from each of the three major reporting agencies every year. You don’t have to request them all at once, though, so you can stagger your requests a few months apart and get a look at your credit report all throughout the year.
Contact the Identity Theft Resource Center for toll-free, no-cost assistance at (888) 400-5530. For on-the-go assistance, check out the free ID Theft Help App from ITRC