A state law that took effect Nov. 1, 2006 permits individuals to “lock” up their credit files by putting a “freeze” on their credit reports. A security freeze blocks access to a credit report and can help prevent identity theft. For example, with a security freeze activated, a bank or credit card company would not be able to check your credit file, and therefore, would probably deny the application, preventing the imposter from stealing your identity and opening a line of credit in your name.
However, the same holds true if you wanted to apply for credit in your own name while your freeze is on your account. This means that you have to plan ahead for a wide variety of situations, such as credit and employment applications, as you will need to contact the credit reporting agencies to “thaw” the freeze beforehand and authorize the release of your personal information. Otherwise, your application will likely be denied. A security freeze may delay, interfere with or prohibit the timely approval of any application you have for a new loan, credit, mortgage, insurance, rental housing, employment, investment, license, cellular phone, utility hook-up, Internet credit card transaction, or other services, including an extension of credit at the point of sale.
What’s the difference between a credit freeze and credit lock?
Credit Freeze:
- Credit bureaus are mandated by federal law to offer them.
- Free and easy to get from each credit bureau, without special conditions.
- Can be lifted online or by phone – use PIN to change status.
- Potentially time-consuming if you lose your PIN (must order new one by mail).
Credit Lock:
- Offered voluntarily by each credit bureau – free from Equifax & TransUnion and for a fee as part of monthly monitoring service from Experian.
- Can be lifted with an phone app.
- Relatively quick to regain access if you forget a password.
Note: Unlike a credit freeze which you can add and remove from your account as needed, a credit lock requires you to enroll in a program. To make a credit lock most effective, you will need to enroll in the programs at all three of the major consumer credit bureaus — Equifax, Experian and TransUnion. However, once you obtain a credit freeze from one of these three credit bureaus, they must notify the other two about your freeze.
Considering a credit freeze?
A credit freeze blocks information on your credit report from creditors and can help prevent identity theft. It makes it much harder for a hacker or criminal to use your personal and confidential information to steal your assets. When your credit report is frozen, it cannot be viewed – even if a creditor asks for it while reviewing your credit history by name and social security number.
You can get a FREE credit freeze at the following credit bureau links: Use this sample letter to draft your own.
Experian Security Freeze
PO Box 9554
Allen, TX 75013
TransUnion Security Freeze
PO Box 6790
Fullerton, CA 92834
Equifax Security Freeze
PO Box 105788
Atlanta, GA 30348