How a Credit Freeze Protects Your Finances
The Equifax data breach resulted in more than 145 million people’s personal information being compromised, including Social Security numbers and birth dates. Even more worrisome, AARP found that only 14% of the 2,000 compromised individuals it surveyed actually took steps to freeze their credit afterwards.
Unfortunately, when such alarming events happen in our country, public outcry and individual focus often peaks relatively soon after. Additional safety measures were not put in place, both on the individual and government level. Unfortunately, not much has changed at all over the course of 13 months since the breach took place.
The good news is that as of September 21, 2018, free credit freezes have arrived due to new federal laws. Arguably, the most effective thing that you can do to protect your sensitive personal information is to freeze your credit. It’s the equivalent of locking your doors and windows at night. An intruder could still get it if they wanted to, but freezing your credit makes it much more difficult for that to happen.
Freezing your credit makes it much harder for someone to use your information if it gets stolen. Opening accounts or borrowing money in your name becomes very difficult. If you freeze your file, the bureaus will not provide information to lenders unless you personally “thaw” the freeze first, using a special personal identification number.
How to Freeze Your Credit
For a credit freeze to be effective, you will have to freeze your credit with all three major credit reporting agencies: Equifax, Experian and TransUnion. Each offers instructions and steps you can take to freeze your credit with them. Here is what you will have to do:
- Get in touch with all three major credit bureaus individually.
- Provide your personal information via their online forms. You can also call or send them a letter. This will create your credit freeze account.
- Keep your security pin in a safe and secure location (you’ll need this to lift the freeze).
- Give yourself up to three days to thaw your credit once you think you’ll want to start using it again.
Locking Versus Freezing Credit
Not everyone is comfortable with the idea of freezing their credit, so they may opt to lock it instead. Like a freeze, a credit lock prevents most lenders from accessing your credit and protects it against fraudulent activity.
The primary difference is that although credit locks may be a bit more convenient, they may have a monthly fee attached. You can lock and unlock your credit at any time, so you don’t have to wait up to the three days it can take to thaw your credit when you freeze it.
Locking your credit is ideal for anyone who knows they will need frequent access to their credit or who wants more flexibility in locking and unlocking access. If you know you won’t need to use your credit anytime soon, freezing is the most thorough way to secure your sensitive personal information.
Don't Be Complacent
Don’t allow complacency to leave you vulnerable to a cyber hack. Protecting your identity is within your control by taking this one simple step. If you are one of the 145 million Americans whose sensitive personal information was compromised because of the Equifax data breach, know that you can take measures right now to lock your front door and guard your sensitive personal information against being used illegally.
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