What Is a 'Credit Freeze' and Should You Do It? How to Protect Yourself From Fraud
When it comes to your finances and your identity, there’s no such thing as being too safe. And considering a recent breach where hackers may have stolen your social security number, it’s even more important to protect yourself. That’s why experts say the best thing to do is a credit freeze. Keep reading to learn more about freezing your credit and how to best shield your assets.
What is a credit freeze?
According to USA.gov, “A credit freeze restricts access to your credit report. If you suspect your personal information or identity was stolen, placing a credit freeze can help protect you from fraud.”
If you decide to take this measure, creditors can’t access your credit report. It keeps them from approving any further credit in your name whether it’s real or fraudulent, making types of fraud and suspicious activity more apparent. If you are interested in applying for a new credit card, are going through a home-buying purchase or making financial moves that require a credit score check, you will need to unfreeze your credit.
Why should you look into a credit freeze?
A recent lawsuit alleged back in April that a cyber hacker stole data from nearly 2.9 billion Americans in a vast data breach. Reports infer that valuable information such as full names, current and previous addresses, social security numbers and info on relatives was compromised.
The security breach occurred when a background check company doing business as National Public Data, owned by Jerico Pictures Inc., failed to properly safeguard the information it scraped, the lawsuit states. The company provides instant search access to billions of records.
Vivian Tu, a content creator who posts financial advice on Instagram and TikTok, recently shared a reel explaining what the breach could mean for you.
“Hackers use your info to open up credit accounts, then they spend money that racks up as debt in your name and then you’re left holding the bag and cleaning up the mess,” she shared in the video.
How to enact a credit freeze
It’s simple to freeze your credit. You can freeze your credit by calling all three of the major credit reporting agencies. Those are Equifax, Experian, and TransUnion. It’s free to submit your request and you can do so by going online, calling a number or sending through the mail.
If you request by phone, agencies must freeze your credit within one business day and if you’re sending by mail they must do it in three business days, according to USA.gov.
When you need or want to unfreeze, you can take the same steps: call, request online or mail.
A credit freeze limits access to your credit reports but won’t block them completely. Records will still be available to certain companies and under specific circumstances.
What’s the difference between a credit freeze and a credit lock?
Credit freezes and credit locks aren’t the same thing and it’s important to be aware of that before completing your request.
“Credit freeze services are federally mandated and free while credit locks are sales gimmicks by the bureaus to charge you hundreds of dollars,” says Tu.
Other measures to protect your identity
When it comes to a credit freeze, you want to proceed with caution and only use the major credit bureaus . Don’t be confused by lookalike websites and don’t open any personal documentation or information if you’re using a public Wi-Fi network.
Also, you can purchase more protection through dark web monitoring services, but that won’t block out hackers completely either. Lastly, use password manager services and ensure that you have two-factor authentication set up when logging into highly personal things.
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