Credit Freeze Free but Still Too Few People Have One in Place

Identity theft in the USA continues to be a problem, with more and more people reporting to the FTC’s complaint database. I define identity theft as having someone not you using your personal and financial information to create new accounts in your name, or using your existing credit. There have been enough computer breaches of American’s identification information that everyone should assume that someone can obtain your identity and use it to create new accounts and run up charges on them.

The Credit Reporting Agency Tool

Image of ice cubes surrounding a glass of ice courtesy the authorThe easiest way to control this is through the credit reporting agencies. Since approvals are based on the ability to look at those reports, the inability to view this credit information will short-circuit attempts to create credit accounts in your name. Since 2018, the ability to turn off access to these credit reports for free has existed. It is called a Credit Freeze and it is the ability to lock out all inquiries to view your credit report. It is very simple to do, yet Nerdwallet found in a survey of a million anonymized credit reports, that only 17% had a freeze on them.  (Prior to 2018 the credit reporting agencies would charge to place a freeze as well as charge to thaw the freeze.)

You may ask why it would be useful to have a freeze on a credit report when you already have a monitoring service for your credit? While a monitoring service is useful to let you know about changes to the accounts, this happens after-the-fact and by the time you are notified of the change, the damage may have already been done. Granted, you learn about it right away so that you can start working on undoing the fraudulent activity, but you are still going to have to put in the time and energy to fix the issue.

In the case of a freeze, this stops the ability to create new credit in your name and thus, stops the criminal from even getting as far as creating the new credit.

The Way to Temporarily Get New Credit – The Thaw

Naturally, there may be times when you do want someone to be able to view your report. When you are applying for new credit or need to have your credit reviewed for something like renting an apartment. The tool to allow this is a “thaw” of your freeze. You can do this temporarily for the period of time you need so that the company doing the inquiry can complete it.

Companies are able to handle credit freezes. If you are in a situation where they are asking for personal information and they say it is to do a credit check, tell them that you have a freeze on your credit report. Then ask them which credit reporting agency they need to query in order to check. They should be able to give you both a name and how long they need access to the information.

With that information, you can go online and lift the freeze for the period of time they need it. Only under worst case might you need to thaw all three reports. I find that a one-week period is long enough for any business to complete the credit check.

How to Place a Freeze (and a Thaw)

Freezing and thawing your account at a particular credit agency is usually done from the same web page. In fact, two of the three agencies have one page with buttons to select apply a freeze or do a thaw.

The freeze process is pretty easy. You’ll provide identification information and answer some questions based on your credit report (very similar to the process to get a copy of your report). (Transunion will have you create an account with username and password first in order to access the freeze and thaw options.) Then you’ll request that the freeze be put into place and either create a PIN or have one given to you. Maintain this information in a safe place as you’ll need it to thaw your credit.

You can find Experian’s page here, the Equifax page here and the Transunion page here. And if they change the location of the page in the future, just Google the name of the company and “freeze” and you’ll get to the right location.

Thawing to allow access to your credit report is also pretty straightforward. You’ll need your PIN, and will likely answer questions again to verify your identity. Then you’ll be given the option to do a temporary or permanent thaw. If temporary, you can usually select the start and end date for the thaw. I found it quite simple and straightforward.

With a tool so easy to implement, it is surprising how many people have not taken advantage of this free service from the reporting agencies. It only takes about 15 minutes, and will save you hours of frustration trying to clean up your credit if your identity is stolen.