Our identities are at risk every single day. Fraud is a scary thought because you never know when it will occur. Think about this for a second…our cell phone providers, insurance companies, banks, employers, etc. store our personal information in their databases. They are susceptible to data breaches and hacking. If this occurs, who the heck just stole your information and when will they plan to use it!?
Whether you are a victim of fraud or not, freezing your credit report and setting fraud alerts is something every person should consider. My recommendation is to get at minimum fraud alerts for your credit report.
Here is everything you need to know about freezing your credit and setting up fraud alerts:
What is a credit freeze?
Freezing your credit report means that new lenders will not be able to access it. Period. By restricting this access, new lenders will not be able to determine how much credit can be provided to you.
Does this affect my credit?
Freezing your credit report does not impact your credit. In addition, it does not prevent you from getting your free annual credit report!
Does this stop pre-screened credit offers?
Unfortunately, you will still receive pre-screened credit offers. If this is something that you want to change, you can opt out by visiting www.optoutprescreen.com
Can any lender see my credit report even if it’s frozen?
Existing lenders that you have accounts with may still have access to it. Your credit report can be sent to your existing lenders and to debt collectors. Also, it needs to be mentioned, but government agencies may receive access to your credit report if it is in response to a court order, search warrant and/or subpoena.
What’s the difference between a credit freeze and fraud alert?
This is a great question to ask because there are huge differences. Depending on what you’re looking for, this may guide you to one or the other and possibly even both!
- A credit freeze restricts the access to your credit report from new lenders.
- Fraud alerts allows lenders to receive your credit report, as long as they take the proper steps to verify your identity. For instance, if a new account is in the process of being opened, the institution will take further steps to verify you by calling you on verified phone numbers in your credit report and asking more details questions for authentication purposes.
There are three types of fraud alerts:
- Initial fraud alert. This is great if you have not been a victim of fraud but are concerned that it may occur because you’ve lost sensitive information, such as your ID, Social Security Card/Number, bank information, other sensitive information or because you want to be proactive and take extra measures for protection.
- Extended fraud alert. This is available for fraud victims and the fraud alerts will be on your credit reports for seven years.
- Active duty military fraud alert. This exists for military personnel that want to protect their identities while they are deployed and the fraud alerts last for one year.
The great thing about a fraud alerts is that it is free! Contact the credit bureaus and they will place this on your record.
Now that you know more about what a credit freeze is and the different types of fraud alerts, lets dive deeper into the pros and cons of a credit freeze and the actual process to get this done.
- Credit freezes are a great option if you’re dealing with identity theft.
- Since you are freezing the access to your report, this is great if you don’t need to access it for a long time. For instance, if you’ve got your mortgage, auto loans/lease agreements, credit cards and other credit accounts and you are not looking for more credit, freezing your account is a great option.
- Freezing your credit report is an excellent option if you want to have more control over your information. You remove the freeze and add the freeze when you please. Just keep in mind of all of the fees you will be paying to the bureaus.
- This is not recommended if you need to access it in the foreseeable future. Even though you can temporarily lift the credit freeze, there will always be a cost associated to it. Lifting your credit freeze is a painful process. I’ve personally experienced it. Prior to getting my vehicle lease, I had to call Experian, verify my identity, provide credit card info for payment, let them know who I am allowing the report to be given to, and inform them when to freeze the credit again. This added at least 30 more minutes to my car leasing experience.
- Keep in mind, insurance companies and even cell phone providers request for access to your credit. This may cause huge inconveniences for something as simple as getting a new cell phone contract or car insurance.
- Credit freezes do not guarantee fraud prevention. A credit freeze prevents the establishment of new accounts. However, what if someone stole the information of your current accounts? Identity fraud is still plausible.
What is the process to freeze and to unfreeze my credit report?
Contact the three credit bureaus or visit their websites (Experian, Transunion, Equifax). You will have to create a username and an online profile for verification purposes. Each bureau has a cost associated to freezing your credit and this may vary depending on which state you live in. A PIN will be provided to you and that is needed for every time you want to unfreeze your credit report. If you are a victim of identity theft, freezing your credit may even be free!
To unfreeze your credit report, you can call the bureaus to provide the info or visit their websites by logging in to your account and requesting to lift the freeze. Make sure to have your PIN available! You will also be able to set the time for how long you want the temporary lift to last. For example, 1 or 5 days. Once the time is up, it will freeze right away.
There you have it! Everything you need to know about freezing your credit and fraud alerts. What steps will you take to reduce the risk of fraud?
To Contact Credit Bureaus
Equifax Credit Information Services, Inc.
P.O. Box 740241
Atlanta, GA 30374
Equifax Fraud Division
P.O. Box 740256
Atlanta, GA 30374
To place a fraud alert on your credit report, call 1-888-766-0008.
Experian National Consumers Assistance Center
TransUnion Consumer Solutions
2 Baldwin Place
P.O. Box 1000
Chester, PA 19022
Obtain a free TransUnion credit report:
Dispute information in your TransUnion credit report:
TransUnion Fraud Victim Assistance Dept.
P.O. Box 2000
Chester, PA 19022-2000