With increasing rates of identity theft, many consumers choose to freeze their credit reports so that the credit report cannot be shared with potential creditors. When you freeze your credit reports, a lender or creditor who makes an attempt to check your credit history will not be able to order a report using your name and Social Security number.
How a Credit Freeze Works
To freeze your accounts, you will need to contact each of the three credit reporting agencies — Equifax, Experian and TransUnion — and provide them with identifying information such as your name, current and former address, Social Security number, birth date and a copy of your driver’s license. The request for a freeze can be made by certified mail or online.
Initiating a credit freeze costs between $3 and $10 per person per bureau, and you will likely receive written confirmation that the freeze is in effect after the credit bureau has received all the information they need. Check your state’s security freeze requirements and fees schedule for specific fees.
If you want to open a new credit account or apply for a loan, you have the ability to lift the freeze for a certain period of time so that the creditor can pull your credit report. Each credit bureau charges a fee (approximately $5 to $10) to lift the freeze temporarily, so you need to select a specific date and let the credit reporting agency know which creditor will be ordering a credit report.
Keep in mind that freezing your accounts will not lower your credit score, and will not prevent you from receiving pre-approved credit offers. If your spouse shares a credit account with you, both parties need to freeze their individual credit files separately for the entire account to be frozen.
When to Freeze Your Credit
You probably should freeze your credit if:
- You’ve been a victim of identity theft and had your accounts compromised.
- You’ve lost your credit cards and Social Security card or driver’s license.
- You simply suspect that you have been the victim of identity theft and want peace of mind that your credit report isn’t in the wrong hands.
When Not to Freeze Your Credit
There are some situations where it’s not a good idea to freeze your credit. If your job requires you to access your credit reports regularly to open new accounts, it can be very costly to lift the freeze every time you need to pull your report. If you’ve lost a single credit card or had a credit card stolen, you may only need to contact your credit card issuer to investigate the account and close it as needed.
Another drawback of freezing your credit report is that your credit report won’t be updated with your current name or address until you personally send that information to the credit bureaus. You will need to update your contact information on your own any time you move or make a name change.
