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Back in 2018, a data leak from the credit agency Equifax allowed hackers to steal millions of American’s credit reports. In response to this data breach, a new law was created that allows everyone in the US to freeze their credit and keep it frozen at no charge.
Before the law went into effect, it cost somewhere around $10 to freeze and unfreeze your credit, and each credit bureau charged a fee. Spending $30 or more dollars to freeze your credit reports made it debatable if it was worth doing.
Now that it costs nothing to do other than a small amount of your time–freezing your credit is a smart way to protect yourself from credit and identity theft.
What is a Credit Freeze?
Credit reports are typically accessed anytime someone applies for a loan or credit card—a credit freeze prevents anyone from being able to retrieve or view your credit reports.
If anyone tries to open a new account in your name, a credit freeze will stop the fraudster from moving forward. It’s a great line of defense that’s available for consumers.
While lenders will need you to unfreeze your credit when applying for a loan, you can still view your annual reports while keeping your credit frozen.
What You Should Know About a Credit Freeze
For those that are working on improving their credit score, you will still be able to build your credit while it is frozen.
Credit monitoring services will still work so you can see updates to your score. All soft inquiries on your credit will continue to go through. A credit freeze only prevents hard inquiries.
All of your currently opened and existing credit accounts will work and function like normal. That means freezing your credit will not prevent fraud from happening on your existing accounts. So still monitor for unusual charges and use strong passwords.
How to Freeze and Unfreeze Your Credit
Freezing and unfreezing your credit is simply done by contacting the credit bureaus and filling out some information. You will likely receive a pin or login information that you should store in a password manager.
Using your pin or login, you can unfreeze/freeze your credit at any time.
If you are ready for the extra layer of protection and want to freeze your credit, you can do so over the phone or online with each major credit bureau.
Below are the links to each credit agency so you can get started.
Remember to save your pin and/or login information using a password manager or keep it in a safe place. If you forget your pin, you can still get your credit unfrozen, but it will take longer, and you’ll need to contact the credit agency.
Why it’s Worth the Hassle
If you are planning to apply for multiple loans, then wait to freeze your credit to save yourself some time.
If you do not plan on opening any new accounts or having your credit checked, it makes sense to spend 15 minutes and freeze your credit.
The best defense is a good offense. The time it takes to deal with identity theft or a fraudulent credit account opened in your name is a much longer and stressful ordeal then simply freezing your credit.