OK, so it’s February, and we have occasional freezing temperatures here in Florida. But that’s not what we’re talking about here. We’re talking about a new idea which basically puts your borrowing power on hold in order to keep things safe.
A credit freeze prevents unauthorized users from using your credit report to open new accounts. Freezing your credit is your strongest tool to keep criminals from accessing your credit without your consent. And the recent Equifax data breach that affected about 145 million consumers offers a compelling case for being proactive. But a credit freeze comes at a cost, both in terms of money and inconvenience.
Here’s what it is, how to do it — and some pros and cons.
What does it mean to freeze my credit?
A freeze makes your credit reports inaccessible to most people, with some exceptions: You can access your own records, as can pre-existing creditors, debt collectors, and a few others. It has no effect on your credit score.
“If new lenders and credit furnishers can’t view your credit history, they’re unlikely to approve a new credit line in your name.” Because new lenders and credit furnishers can’t view your credit history, they’re unlikely to approve a new credit line in your name.
If you think your data may have been compromised, especially your all-important Social Security number, establish a credit freeze.
How do I freeze my credit?
Contact each of the credit bureaus:
- Equifax: Call 800-349-9960 or go online
- Experian: Call 888‑397‑3742 or go online
- TransUnion: Call 888-909-8872 or go online
In most cases, you’ll have to pay to initiate the freeze. Equifax is offering free credit freezes and credit freeze lifts through June 30 in the wake of a data breach last year. Once it’s set, it locks your credit file so nobody can access it unless you give direct authorization to the credit bureaus, usually through a PIN or password.
Store your PIN or password in a secure location. If you misplace it, you may not be able to undo the freeze when you need to.
“You have to pay to thaw your credit when you wish to give access to lenders, potential employers, utilities, or landlords.”
You also generally have to pay to thaw your credit anytime you wish to give someone access, such as allowing potential employers, utilities, or landlords to check your credit, or when you apply for a credit card, loan, or mortgage.
The costs of freezing and thawing your credit will depend on your state’s laws. It’s relatively low — typically less than $20 (and in some states, it is free for identity theft victims or senior citizens). The state-by-state information below was gathered by the consumer advocacy group U.S. PIRG. Click on your state to see costs for each bureau.
Carolyn Secor P.A. focuses its practice in the areas of Bankruptcy and Foreclosure Defense in Clearwater, Florida. For more information, go to our web site www.BankruptcyforTampa.com or call 727-334-0729.