In 2017, Equifax announced they had a security breach where the personal information of 147 million users was released. As far as breaches go, this was a big one. If you are American and have bought a house or car in the past couple decades or even just used a credit card, it’s highly likely that your data was leaked. Mine was.
There’s a silver lining from the Equifax breach. Prior to the breach, in order to get a security freeze on your credit account, you had to often either show you were a victim of identity theft (not hard) or pay for it. But as part of the breach cleanup, in May 2018, Congress passed a law that made security freezes free to everyone.
Why freeze your credit?
First, chances are pretty good that your data is already in the hands of criminals. And if not today, possibly in the future. With a credit freeze, it makes it harder for criminals to open accounts and get lines of credit in your name. Harder, but not impossible. But any institution that lends out money to folks without being able to see their credit history is asking for trouble.
Second, I don’t like being marketed to and having companies that I have not chosen to work with have access to my personal financial information. It’s slightly irksome that the credit bureaus make money selling my name and credit history.
Won’t it be a pain?
You might be concerned about the hassle of having your credit frozen. I’ve had my credit frozen since summer of 2018, shortly after Congress passed the law. And I can tell you from personal experience, it’s been pretty painless. During that time, I’ve opened bank accounts to collect new account bonuses, credit card applications for sign up bonuses for our trip to Spain, and even refinanced my mortgage this spring right before COVID-19 blew up. Each time, I was able to temporarily “thaw” my freeze, opening my credit report up for a period of a week or two, after which the freeze goes back into place. It’s about 3 to 5 minutes of logging into each credit bureau website and walking through the option to temporarily thaw the freeze. For the credit card applications and for the refinance, I had to walk my wife through the process as well, but again, pretty painless.
Besides the times that I know I want to open a credit account, I never think about it.
Locks are not Freezes
Some of the credit bureaus may try to talk you into doing a “lock” instead of a “freeze.” They are pretty different things and you’ll more likely than not, end up with a worse experience. Some of the credit bureaus even require you to opt-in to being marketed to as part of the small print. Pretty devious, if you ask me.
Here are links to get started freezing your credit:
- Transunion (best experience, in my opinion): https://www.transunion.com/credit-freeze
- Experian: https://www.experian.com/freeze/center.html
- Equifax: https://www.equifax.com/personal/credit-report-services/credit-freeze/
Get Your Free Annual Credit Reports
The other credit-related tip is to request your credit reports from the three bureaus each year. You can get these free by going to http://annualcreditreport.com/. Since you can only get one free report per year, I set a calendar reminder for every four months and stagger the different bureaus throughout the year. February is Transunion, June is Experian, and October is Equifax. I used to do them all at the same time but I’ve found staggering them might give me an earlier heads up if a fraudulent account gets opened in my name. But with my credit frozen, that’s pretty unlikely.
I’m not happy to have my personal data spread to the four winds. Being able to freeze my credit doesn’t cancel that out, but it does help.
Have you frozen your credit? Have any other tips about credit freezes? I’d love to hear about them in the comments.