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In this article, we explore the importance of credit freezes, how to implement them, and their potential benefits in safeguarding your financial identity.

What is a credit freeze, anyway?

Think of it this way. A credit freeze is like locking your front door.

When the door is locked, it’s much harder for anyone to enter without your permission. Similarly, a credit freeze (also known as a “security freeze”) prevents unauthorized access to your credit file, making it more challenging for identity thieves to open new accounts in your name.

Just as you hold the key to your front door, you have control over when to lift the freeze on your credit, giving access to your credit report only to those with a right to it.

Why freeze your credit?

According to the Consumer Financial Protection Bureau (CFPB), creditors typically won’t offer you credit if they’re unable to access your credit reporting file. So, by implementing a credit freeze, it prevents you and others from opening accounts in your name. Freezes can be highly effective in blocking an identity thief from opening a credit account under your name.

With a credit freeze in place, only specific entities can access your file. These entities include creditors of your existing accounts, certain government agencies (e.g., child support agencies), and companies you’ve hired to monitor your credit file.

How do you freeze your credit?

Under federal law, you can freeze and unfreeze your credit record for free at three nationwide reporting companies: Experian™, TransUnion®, and Equifax®.

However, there are exceptions.

The federal law doesn’t cover credit reports requested for employment, tenant screening, or insurance purposes — and based on your state’s laws, some credit reporting companies (e.g., employee or tenant-screening companies) may charge a fee to place and lift a freeze. It's important to stay informed about your state's specific regulations regarding credit reporting to ensure you're well-prepared for any financial or employment-related situations.

You can place a freeze on your credit file at any time. To do this, you must inform each reporting company (Experian, TransUnion, and Equifax) of the freeze.

One of these companies must place a credit freeze within a business day of your request if you contacted them by phone or electronically, and within three business days after receiving the request if mailed.

A reporting company must do the following:

• Send you a written notice of the freeze no later than five business days after it’s been placed.
• Inform you of how to remove the freeze.
• Allow you to request a freeze, an initial fraud alert, an extended fraud alert, and an active-duty fraud alert via their website.

How do you unfreeze your credit?

At no charge, you can unfreeze your credit. It will be lifted within an hour if you request it via a toll-free telephone call or electronically. For mailed requests, it will be lifted within three business days.

You can also temporarily lift the freeze for a specific period of your choosing, at no cost, following the same timeframes.

Should you freeze your children’s credit?

Federal law extends safeguards to “protected consumers” — children under the age of 16, incapacitated individuals, or those under guardianship. Those authorized to act on behalf of these protected consumers can request a credit freeze.

Also, suppose the nationwide credit reporting company lacks a file for the protected consumer when parents or guardians request a freeze. In this case, the company will generate a record specifically for that protected consumer. The record is to be used exclusively to freeze credit to protect against identity theft.

What if you believe you may be a victim of identity theft?

If you suspect identity theft, file a fraud alert with the nationwide reporting companies. This requires creditors to verify your identity before opening new accounts, issuing cards, or increasing credit limits. An initial fraud alert lasts up to one year, but you can remove it sooner.

Would you like to know more about protecting yourself and your loved ones from identity theft?

Reach out! We’d be happy to help.

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