Understanding Security Freezes | Credit 101 Ep. 196

A security freeze, also known as a credit freeze, is a powerful tool to protect yourself from identity theft by restricting access to your credit report. Here’s what you need to know:

1. What is a Security Freeze?

• Definition: A security freeze is a restriction placed on your credit report that prevents lenders and creditors from accessing your credit report. This makes it harder for identity thieves to open new accounts in your name.
• Purpose: It is designed to prevent unauthorized access to your credit information and reduce the risk of new account fraud.

2. How to Place a Security Freeze

• Contact Credit Bureaus: To place a freeze, you need to contact each of the major credit bureaus:
  • Equifax: Equifax Security Freeze
  • Experian: Experian Security Freeze
  • TransUnion: TransUnion Security Freeze
• Provide Information: You will need to provide personal information such as your name, address, Social Security number, and date of birth. You may also need to provide identification documents.
• Receive a PIN: After placing a freeze, you will receive a PIN or password. This is used to manage and lift the freeze in the future.

3. Impact of a Security Freeze

• Prevents Access: Creditors cannot access your credit report to make lending decisions, which prevents them from opening new accounts in your name.
• Does Not Affect Existing Accounts: A security freeze does not affect your existing accounts. It does not prevent you from using your current credit cards or loans.
• Does Not Affect Your Credit Score: Placing a freeze does not impact your credit score. It simply restricts access to your credit report.

4. How to Lift or Temporarily Remove a Freeze

• Lift Temporarily: If you need to apply for new credit, you can temporarily lift the freeze. Contact the credit bureaus and provide your PIN or password to lift the freeze for a specific period or for a particular creditor.
• Permanently Remove: To remove the freeze permanently, contact the credit bureaus and request to lift the freeze. This will restore full access to your credit report.

5. Security Freeze vs. Fraud Alert

• Security Freeze: Restricts access to your credit report and requires a PIN or password to lift.
• Fraud Alert: Alerts creditors to take extra steps to verify your identity before opening new accounts. It does not block access to your credit report like a freeze.

6. Costs and State Laws

• Cost: In many states, placing or lifting a security freeze is free. However, check with your state’s regulations for specific details.
• State Laws: Some states have different rules or fees associated with security freezes. Review your state’s laws for additional information.

7. When to Consider a Security Freeze

• Identity Theft Risk: Consider a security freeze if you are concerned about identity theft or have been a victim of fraud.
• Extended Absence: If you are going to be away for an extended period and want to prevent unauthorized access to your credit report.

Conclusion

A security freeze is a valuable tool for protecting your credit information and preventing identity theft. By understanding how to place, lift, and manage a security freeze, you can take proactive steps to safeguard your financial security and prevent unauthorized access to your credit report.