You can now freeze your credit report for free
Data breaches and identity theft are no laughing matter. Identity fraud hit an all-time high in 2017, with 16.7 million victims in the United States, according to Javelin Strategy & Research.Data breaches also hit a new high, with 1,579 reported breaches affecting nearly 179 million personal and financial records.
Freezing your credit report is one way to prevent identity thieves from stealing your information. A credit freeze restricts access to your credit to your existing creditors and can only be lifted at your request, making it more difficult for someone to obtain credit on your behalf fraudulently.
Now, thanks to federal legislation that came into effect on September 21, 2018 (known as the Economic Growth, Regulatory Relief, and Consumer Protection Act), you will be able to freeze your credit, protecting your personal and financial information, for free.
The law also extends the length of time a fraud alert is kept on your file from 90 days to one year.
Credit freezes or monitoring
“Think of the credit freeze as a state-of-the-art home security system that helps keep bad guys out, as opposed to credit monitoring, which is more like that text message you received from. a neighbor after someone has already smashed your living room. window and left with your big screen TV, ”says Ted Rossman, industry analyst at CreditCards.com. “In the latter case, the damage has already been done, so the warning is not very useful.
Following the Equifax (EFX) data breach in September 2017, one in five Americans chose to freeze their credit, to the tune of $ 1.4 billion in credit freeze charges.
“In the past, a credit freeze or security freeze cost $ 3 to $ 10 per credit CompanySays Ashley Dull, editor-in-chief of CardRates.com. “Freezing your credit with all three bureaus can cost up to $ 30, with additional charges for unfreezing your credit.”
Previously, the costs of freezing or thawing credit reports were determined at the state level. The new law, dubbed the Economic Growth, Regulatory Relief, and Consumer Protection Act, removes the nationwide fee requirement at the three major credit bureaus: Equifax, Experian, and TransUnion.Consumers can also “unfreeze” their files, temporarily or permanently, at no cost.
What changes for credit freezes
“This legislation is a step in the right direction to protect the identity of consumers,” said Dale Dabbs, president and CEO of Sontiq, the parent company of EZShield + IdentityForce. “It’s essential to have open access to your credit reports while designating who you want to see your credit information. ”
The law also includes a provision allowing parents to freeze their children’s credit reports for free for children 16 and under. Childhood identity theft can easily go unnoticed if parents don’t watch for warning signs.
“If you’re not careful with your own credit, chances are you won’t be thinking of someone stealing your little one’s identity and racking up fraudulent charges,” says Rossman . “It could potentially go unnoticed for many years until they grow up and start applying for credit, only to find a big mess.”
Over one million children were victims of identity theft in 2017, costing their families $ 540 million. Sixty percent of child identity theft has been targeted by someone they know.
“These scenarios are a good reason to freeze your children’s credit report, protecting their information at no cost to unlock them when they are old enough to start using credit,” says Dull.
How to freeze your credit for free
Freezing your credit report for free is simply a matter of contacting each of the three credit bureaus and requesting a freeze. The three bureaus allow you to freeze your credit online:
You can also initiate a freeze over the phone.
When choosing to freeze your credit, you will need to provide your name, Social Security number, date of birth, address and telephone number. If you freeze your report online, you will also be asked to create an account using your email address and a unique password. From there, all you need to do is verify your identity and you’re good to go.
Once your credit is frozen, you will need to make another request to unblock it, but again, it won’t cost you anything. Just be sure to consider when you unfreeze your credit report.
Rossman says the new law requires credit freezes to be lifted in less than an hour, but he recommends giving you a longer window if you plan to apply for credit soon after. If you’re shopping for a car, for example, he suggests lifting the freeze three business days before applying for a loan to avoid the risk of being caught in limbo while waiting for financing approval because your credit report is unreachable.
Another thing to note: the new law extends short-term fraud alerts to one year, compared to the old 90-day limit. Place a Fraud alert on your credit report requires lenders to contact you to verify your identity when they receive a credit application on your behalf.
The bottom line
While free credit freezes aren’t a sure-fire barrier against identity theft, they can help keep your information out of the wrong hands. You can also strengthen your defenses by regularly checking your credit, reviewing bank and credit card statements for suspicious activity, and setting up bank and credit card alerts to notify you of new transactions. The more proactive you are in protecting your information, the greater the chances of preventing identity theft.