How to Place a Credit Freeze
If you have been a victim of identity theft or suspect cybercriminals are abusing your personal information, identity theft insurance is one of the best weapons you can have in your arsenal. With a credit freeze, you are able to block access to your credit reports. Doing this can not only prevent unauthorized credit checks but it can also prevent further processing of credit applications without your knowledge.
Before you proceed with a credit freeze, however, you should know what it is, what it does, and under what circumstances you should freeze your credit. In this article, we will help you better understand how credit freezes work and how to decide whether you need one.
What You Need to Know About Credit Freezes
What Is a Credit Freeze?
A credit freeze is designed to protect you from credit fraud and identity theft. Additionally, it also restricts access to your credit report. Using a credit freeze will not affect your credit score, but it is going to prevent your credit report from being obtained without your authorization unless you first lift the freeze.
Freezing your credit can help stop identity thieves and other cybercriminals from using stolen personal information, such as your social security number, and applying for new credit in your name.
Since checking your credit report and credit scores are generally the initial steps in processing any credit application, concealing your credit will help prevent unauthorized credit accounts from being opened.
However, a significant drawback of credit freezes is that, along with preventing unauthorized credit applications, it also blocks unexpected credit checks. This can complicate legitimate applications for loans, credit cards, and other things. You will want to unfreeze your credit reports before the process can move forward.
When Should I Freeze My Credit?
If you have been a victim of identity theft, you have more than one option to consider when it comes to protecting your credit. Oftentimes, a credit alert, also known as a fraud alert, may be sufficient.
When you place a fraud alert on your credit accounts, you can add a phone number so that creditors can call you when they receive an application in order to confirm that it is you who is applying. You are also able to request additional credit reports free of charge when you include a fraud alert or identity theft victim statement.
Reviewing your credit report can help you decide whether you are a victim of identity theft and can help you take suitable action. In more extreme cases where you are experiencing ongoing attempts of credit fraud, you might feel a credit freeze is necessary.
A credit freeze is worth considering taking action to protect your credit in the following situations:
- Unexplained invoices or collection notices that are sent to your address, in your name, or under another name.
- New credit inquiries or credit accounts that appear on your credit report that indicate activity with creditors or other companies you do not recognize.
- Your bank or credit union notifies you about fraudulent activity on an account.
- You receive a notification that you are a victim of a data breach or are at risk of a data breach.
Who Can Access My Frozen Credit Report?
A credit freeze prevents most credit inquiries, however, certain parties may still access a frozen credit report under specific conditions, such as:
- You, when you review your credit report.
- Lenders and card issuers with whom you have credit accounts, as they utilize credit checks in their account management processes.
- Landlords and rental agencies that are screening you as a possible tenant.
- Telephone carriers and utility companies that use your credit to determine the amount of security deposit required on services.
- Debt collection agencies when they are attempting to receive a payment.
- Child support agencies, for the purposes of determining child support.
- Auto insurance companies may include credit scores in their application or underwriting process.
- Potential employers you have authorized to conduct a background check.
- Government agencies that are executing court orders or arrest warrants.
How Can I Place a Free Credit Freeze?
To place a freeze on your credit, you will need to contact the credit bureaus directly. You may be asked to provide the following information:
- A copy of your government-issued photo ID (i.e., your driver’s license or passport)
- Proof of address (i.e., a copy of a utility bill)
- Your social security number
When requesting a credit freeze you can provide all the necessary information electronically. When you activate your credit freeze, a credit agency may have you create a personal identification number (PIN) or secure password to use when reactivating your credit.
How Can I Lift a Credit Freeze?
In addition to your ability to unfreeze your credit, you might also have the choice to lift the credit freeze by either granting one-time access to a particular creditor, or by indicating a period of time (i.e., one day, one week, one month, etc.) you want the credit freeze to be suspended.
Policies may vary between credit reporting agencies, so be sure you know what your options are before you start the process. When you enter your password or PIN, your credit will be thawed within the hour that your request was received.
Should you lose your password or PIN, you will need to confirm your identity, which could delay the approval process.
Identity Theft Insurance Services with SmartCredit
While nothing can 100% protect you from all types of identity theft, credit freezes can help. Additionally, since a credit freeze is a free service, it won’t hurt your wallet. Freezing your credit is an effective, cost-free way to make it harder for identity thieves to open up a new line of credit or other financial accounts in your name.
At SmartCredit, we provide identity theft insurance services for our customers and their entire family residing in their household*. To learn more about our identity theft insurance services, contact SmartCredit today.
*Activation required after enrollment