Credit freezes for you, you, and you… but not you…

With fraud and identity theft running rampant, you might have heard someone suggest freezing your credit. However, a credit freeze isn’t the right solution for everyone. How do you know if it’s right for you? Let’s talk about:

  1. What a credit freeze actually is
  2. How to reverse or “thaw” it
  3. Who SHOULD freeze their credit
  4. Who should NOT freeze their credit
  5. What alternative safety measures you can take

What is a credit freeze?

A credit freeze is essentially exactly what it sounds like. You ask the credit bureau to “freeze” or prevent future review of your credit record. This makes it much harder for a fraudster to open a credit card or loan under your name.

How do I thaw my credit?

Credit freezes do not need to be permanent. Generally, a credit bureau will give you a secret PIN when you freeze your credit. You can simply use that PIN with the bureau when you want your credit either temporarily or permanently thawed (allowing you to apply for a loan or new credit card).

Who should freeze their credit?

  • The elderly

Elderly individuals are common targets for identity theft. They might be less likely to monitor their credit scores and history because they don’t use their credit as often. They also might be more susceptible to schemes where they give private information to the wrong people.

  • Children

You may know that Baby Hinks is on the way! Babies come into the world with their own Social Security number, birth certificates, and yes… credit history! Children’s identity and credit can be stolen and used fraudulently! The really bad part? Someone could fraudulently get a loan using Baby Hinks’ Social Security number, and we probably wouldn’t know until the child was 18! Think about it… how often have you checked your own kids’ credit report?

You don’t want your child applying for their first credit card only to find that they have abysmal credit due to previous fraud. Consider freezing your child’s credit.

Who should not freeze their credit?

  • People who monitor and use their credit frequently

If you have a habit of regularly checking your credit score and reports, you can probably catch fraudulent activity before it becomes too damaging. This does take diligent effort.

If you foresee applying for a few loans or credit cards in the near future, you might find it inconvenient to have to repeatedly freeze and thaw your credit.

What are alternative ways to protect my credit?

There are loads of identity and credit monitoring services out there. I am sure you see advertisements for them regularly. Each of the 3 main credit bureaus also offer fraud alerts. Setting up a fraud alert notifies the lender that they need to take extra steps to verify your identity before offering you (or a fraudster) credit.

You can get the protection in 1 year or 7 year increments.

Here are links for where you can set fraud alerts and credit freezes at the 3 bureaus.

Unfortunately, taking these steps to protect yourself does take time. However, it takes a lot less time than unburying yourself from an identity theft mess after the fact!

TransUnion 

Equifax 

Experian 

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I tend to follow the motto, “Better safe than sorry.” If you tend to have a similar sentiment, then credit freezes and fraud alerts are useful measures to consider. At the very least, check your credit score regularly and get your free annual credit report from EACH of the bureaus!

Read more of my blog posts about financial organization & simplification here!