What is a Credit Freeze?
A credit freeze – sometimes referred to as a security freeze – helps protect you from identity theft by blocking the opening of new accounts in your name.
By freezing your credit, the consumer credit reporting agencies will not be able to share the details of your credit report with anyone who asks for it.
Without access to your credit file, lenders will generally not extend credit to you or anyone claiming to be you.
The more private and financial data available on the internet, the greater the risk of being a victim of fraud or identity theft.
In 2017, 16.7 million people were victims of identity theft, resulting in $16.8 billion of losses. The Equifax security incident is a stark reminder of the importance of safeguarding our assets.
As identity theft is a growing problem, freezing your credit can help stop criminals from opening new accounts in your name.
It’s important to remember, though, that a credit freeze doesn’t prevent identity theft altogether. However, it does make it more difficult for criminals to open fraudulent credit accounts with your stolen information.
The Pros of Freezing Your Credit
Here’s a list of the advantages of freezing your credit:
- By freezing your credit, you prevent unauthorized people from establishing a fake credit account with your name.
- A credit freeze gives you peace of mind knowing that your credit report is secure.
- Freezing your credit will not affect your existing credit accounts or change your credit score.
- Credit freezes are now free and won’t cost you a penny.
- By freezing your credit, you can prevent yourself from making impulse decisions to apply for credit cards because it could take up to 20 minutes to lift the freeze.
- In most states, credit freezes last indefinitely, so you don’t have to worry about them expiring until you lift them.
When you freeze your credit, you’ll receive a PIN that should be kept in a secure location. This PIN is needed to unfreeze or thaw your credit before creating new accounts.
The Cons of Freezing Your Credit
Here’s a list of the disadvantages of freezing your credit:
- A credit freeze does not guarantee complete protection.
- In order to put a credit freeze in place and to later remove it, you must contact the individual credit bureaus.
- When applying for a loan or credit card, you may need to lift your credit freeze in advance of the submission.
- When opening a new credit account, you’ll need to contact each bureau separately and plan in advance, which may not be very convenient. Luckily most allow you to do this online.
Remember, while freezing your credit can provide protection, it’s not a guaranteed solution and there are some drawbacks that you should consider.
Additionally, it is worth mentioning that freezing your credit will have no impact on your credit score or your ability to use already existing accounts.
Do Credit Freezes Hurt Your Credit?
Credit freezes do not negatively impact your credit score or limit you from using existing accounts.
It is often thought that freezing your credit will negatively affect your credit score, but this is untrue.
Freezing your credit does not affect your credit score and it also does not affect your ability to use your existing credit accounts. You will still be able to use your credit cards and loans as usual, and you will also still be able to check your credit score.
Is it Smart to Put a Freeze on Your Credit?
It is smart to freeze your credit as it can help prevent identity thieves from opening new credit accounts in your name.
Although there are some inconveniences associated with freezing your credit, such as having to contact each bureau to freeze and unfreeze credit and remembering to plan ahead for new accounts, the advantages are worth it.
Paying for credit report security is a small price to pay in comparison to the peace of mind it provides. It may seem inconvenient, but it can help to prevent future problems.
Is it Better to Freeze Your Credit or Lock it?
For safeguarding your credit and private data, you can choose from two options: freezing or locking your credit.
Both choices can help to protect you from identity theft by making it hard for new accounts to be created in your name, but they do have some distinct contrasts.
Credit freezes are free, but credit locks may come with a fee. Additionally, freezes usually last forever, while locks usually have an expiration date.
To get the best results, it’s important to compare and contrast the two options and select the one that fits your needs.
It’s important to remember that having either one or the other may not be a reliable form of protection against identity theft, so it’s better to set up multiple safety measures.
To protect yourself from identity theft, you can set up a credit freeze, also known as a security freeze to stop anyone from taking out any new credit in your name.
As more personal and financial data is available online, we are at a greater risk of fraud and identity theft.
Taking steps to freeze your credit is an increasingly important measure, as it helps protect against identity theft and the opening of unauthorized credit accounts.
You will receive a PIN when you freeze your credit; make sure to store it securely since it needs to be used to unfreeze your credit report prior to applying for new accounts.
Putting a freeze on your credit may help to protect you, but it is not an infallible option and there are drawbacks.
There are some potential drawbacks to freezing your credit, such as it not always working, having to contact each individual credit bureau, and needing to plan in advance when opening a new account.
Although there are some drawbacks, the advantages of freezing your credit score outweigh the difficulty. It can provide assurance that your credit report is safe and
As stated previously, not only should you freeze your credit, but also take other precautions such as utilizing a credit lock, keeping an eye on your credits report and score, and being attentive of any suspicious activity.
Keeping your credit frozen is not a complete safeguard against identity theft, but it does offer potent shielding for your credit report and private data.