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Blog Fraud/Identity Theft

New law lets you freeze your credit file free of charge

Fraud/Identity Theft
New law lets you freeze your credit file free of charge

It’s been over a year since Equifax, one of the three big credit reporting bureaus, experienced a massive data breach. This breach put about 145.5 million Americans at risk of identity theft and fraud. Because of this security breach, Equifax began offering free credit freezes to anyone who wanted one.

As of Sept. 21, 2018, the three big credit reporting agencies (Equifax, Experian and TransUnion) are now required to offer you a credit freeze free of charge to stop scammers from getting loans and opening credit cards in your name (lifting the freeze is also free). Parents across the country can also get a credit freeze for children under age 16, so their credit file stays frozen until they’re ready to use it. Also, fraud alerts offered by these companies must now stay in place for a whole year and not just 90 days.

What exactly is a credit freeze?

A credit freeze makes your credit report off-limits to anyone who does not already have access to it. No one else will be able to check your credit until and unless you lift the freeze. That means if scammers try to misuse your personal data to open a fraudulent credit account, they are unlikely to be approved. However, a freeze will not prevent collection agencies or creditors you already have from seeing your credit information.

A credit freeze does not affect your ability to use the credit accounts you already have and it has no effect on your credit score.

Lenders use specific credit bureaus to determine the creditworthiness of potential borrowers. The “big three” are separate companies that compete for the business of creditors, who use the credit reports and scores they provide.

While Arsenal uses a specific bureau (TransUnion), another institution can use another. So, if you freeze your credit with Equifax, but not the other two bureaus, someone could open a loan under your name at a financial institution that uses Experian or TransUnion. If you decide to freeze your credit, you need to do it with all three credit bureaus.

How do I freeze my credit?

The fastest way to freeze your credit is online through each of the “big three” credit reporting bureau:

Each bureau’s website takes you through the step-by-step process of freezing your credit. If you don’t feel comfortable freezing your credit online, you can also call (but might have to wait on hold):

  • Equifax: 1.800.685.1111
  • Experian: 1.800.397.3742
  • TransUnion: 1.888.909.8872

All three bureaus allow you to freeze your credit by mail, but calling or completing your freeze online are much easier, convenient and safer ways to do so:

  • Equifax Security Freeze, P.O. Box 105788, Atlanta, GA 30348
  • Experian Security Freeze, P.O. Box 9554, Allen, TX 75013
  • TransUnion LLC, P.O Box 2000, Chester, PA 19016

If you need additional help, NerdWallet offers step-by-step guides on freezing your credit with each bureau:

Remember your PIN

When you freeze your credit report, each bureau will give you a PIN to use to unfreeze it. Make sure to keep this PIN stored in a safe place, because you’ll need open access to your credit reports when you want to do things like finance a car, apply for a job or rent a new apartment. If you forget your PIN, the credit bureau may have to mail you a new one, meaning you don’t get the credit check you need on time.

Remember to unfreeze your credit when applying for new loans

It would be super inconvenient to go to a car dealership on a Saturday and not get your vehicle because your credit is frozen. When applying for new loans or credit cards, make sure to unfreeze your credit beforehand so you get the funds you need.

What’s the difference between a credit freeze and a fraud alert?

Credit freezes and fraud alerts are both great ways to protect your identity in different ways. With a fraud alert, lenders can still access your credit reports, but when they do, they are notified that they have to take steps to verify your identity before extending credit in your name. One convenient thing about a fraud alert is that if you place one with one credit reporting agency, it will alert the other two for free.

What’s the difference between a credit freeze and a credit lock?

Before federal law mandated free credit freezes, the credit bureaus offered, and still do offer, locks. You can essentially “lock” your credit report using the bureau’s website or mobile app. Setting up a lock may be more convenient than a freeze in some cases, but they come with certain caveats: losing the ability to sue, signing up for marketing messages or downloading the mobile app.

As of October 2018, Equifax offers a free lock, TransUnion makes you sign up for marketing materials and Experian makes you sign up for a monthly monitoring service with a fee.

What are some other tips to help protect against identity theft and fraud spurred by the Equifax breach?

In addition to freezing your credit, U.S. Public Interest Research Group Education Fund also recommends you take the following actions:

You should also get a free copy of your credit report from each agency once a year to make sure all of the information on your credit reports is up to date. For example, get your credit report from Experian in February, your report from TransUnion in July and your report from Equifax in November. AnnualCreditReport.com is the only source for free credit reports and is authorized by federal law.