If you follow Komando.com for all your breaking tech news, and I know that you do, you’re well aware of the excessive amount of data breaches that are constantly happening. Criminals are always scouring for personal information – names, social security numbers, addresses, and birthdates – they can use for identity theft and credit card fraud.
Identity thieves can either start charging your credit cards with unauthorized purchases or worse, opening new credit lines under your identity. You may not even realize what’s going on until the collection agencies start stalking you for accounts that you don’t remember creating.
If you suspect that your identity has been compromised, here’s one essential step you must take to stop criminals from opening credit card accounts under your name.
A credit freeze, also known as a security freeze, allows you to restrict access to your credit reports and scores provided by the three major credit bureaus (Equifax, Experian, TransUnion).
Locking up your credit reports will prevent identity thieves from opening new accounts under your name even when they have managed to steal your personal information. Since lenders are required to check your credit report before they can approve a new application, a credit freeze can stop fraudulent accounts from being made at your expense.
How to set up a credit freeze
To freeze your credit reports, you need to contact each of the three credit reporting bureaus via phone or their online forms:
Your personal information including your full name, social security number, date of birth, a copy of a government-issued ID and current and past addresses are required for the process.
You may also pay a fee, ranging from $5 to $10 per bureau, depending on your state. If you’re a victim of identity theft, you can get a credit freeze for free if you can provide a copy of your police report or other supporting documents required by your state. Additionally, some states grant discounts to seniors over 65 and minors.
When the credit freeze takes effect, each bureau will send you a confirmation letter with a PIN code or password. Keep these in a secure place since these codes are required to lift the freeze.
In most states, a credit freeze will remain on an account until it is lifted by the account holder. However, keep in mind that in the states of Nebraska, Pennsylvania, South Dakota and Kentucky, a credit freeze will be automatically lifted after seven years.
What a credit freeze can and can’t do
- A credit freeze will prevent you from opening new credit accounts.
- A credit freeze will not affect your credit score.
- Although it keeps criminals from creating new accounts under your name, a credit freeze won’t stop them from charging your existing accounts. Continue monitoring your accounts for fraud.
- You, your current creditors and their collection agents can still access your credit reports.
- You can temporarily lift a credit freeze for specific parties like potential landlords or employers. Lifting and reinstating a credit freeze often requires additional fees.
- You can still get your free annual credit reports even when a credit freeze is in effect.
- Court orders, subpoenas, and search warrants may still grant government agencies access to your credit reports.
If a credit freeze sounds too extreme for you due to the restrictions, try a fraud alert instead. The three credit card reporting bureaus all have free, 90-day initial fraud alerts. When a fraud alert is in place, businesses requesting credit reports must contact you and verify your identity before a new account can be made.
One more thing before you go
Now’s a good time to know your current credit score. We have the steps you need to do this in the free tip below. Do it now while you’re thinking of it.