How To Place A Freeze On Your Credit

Scamming and identity theft are rampant in today’s world. Although credit card companies, banks, and other financial institutions have done their best to incorporate new regulations and increase their safety measures, it’s often not enough. Scammers are known for their cunning ingenuity, and they live to exploit every single weak point in credit security systems.

In the past, you may have just had to deal with your credit card information getting stolen and spent by somebody else. Today, however, scammers and hackers are often able to use your personal information to access your entire credit profile, apply for loans, and seriously mess up your credit report. In some circumstances, years’ worth of hard work building your credit score could be flushed down the drain in a matter of days by some of today’s latest scammers.

Thankfully, there’s a way to prevent your credit from being scammed and lower your chances of getting your identity frozen by “freezing” your credit. In this article, we’re going to discuss the history of credit freezing, the pros, and cons of placing a freeze on your credit profile, how the new credit freezing laws affect consumers, and how to go about requesting a freeze or unfreeze on your credit profile.

What Exactly Is A Credit Freeze?

If you’re new to the concept of credit freezing, then you may be a bit confused as to what exactly a credit freeze is. Most people tend to think that a credit freeze just means contacting your credit card company and freezing future purchases on your card. While this is a good way to control the damage if your credit card has been recently stolen, freezing your credit profile is actually a lot different.

Essentially, when you place a freeze on your credit, you effectively prevent anybody from accessing your credit profile without your explicit permission. A standard unfrozen credit profile can be pulled and reviewed by any financial institution. As long as they have your signature of approval, they can initiate a “hard pull” on your credit and view your entire credit history and your latest credit scores.

However, once your credit is frozen, lenders and financial institutions must be given direct approval through the use of a unique PIN or “key” in order to view your credit profile. The main benefit of freezing your credit isn’t to prevent legitimate creditors from viewing your credit, though. By freezing your credit, you’ll also prevent scammers and hackers from viewing your credit profile and using it to steal your identity or apply for illegitimate loans under your name.

Once your credit is frozen, you’ll still be able to apply for loans. However, the process will take a little bit longer as each lender will need to request access to your bureau credit reports by using your key.

Credit Freezes: How They Came About

The late-1990s and early-2000s saw a huge increase in credit fraud with the advent of the internet. Suddenly, scammers and hackers had access to a global network where they could scam almost anybody from anywhere in the world. While the internet has arguably been humanity’s greatest achievement to date, it also opened the door for criminals to take advantage of anybody from behind their computers.

So, in 2003, California became the first state in the country to pass a law allowing consumers to freeze their credit profiles with the three credit bureaus (Experian, Equifax, and TransUnion). In the following years, many other states followed suit, allowing residents to request a freeze or an unfreeze on their account for free or for a small fee.

What Are The Drawbacks Of A Credit Freeze?

The primary drawback of a credit freeze is that you won’t be able to seek instant credit approval from a creditor. If you want to apply for a new credit card or obtain a loan, you’ll need to individually call each of the three bureaus and request an “unfreeze” using your PIN. After your profile has been unfrozen, then you can go back and apply for the line of credit.

At first, the concept of credit freezing faced some kickback from local governments. Many officials and businesses claimed that allowing consumers to freeze their credit profiles at will would hurt the economy by discouraging spending.

Since consumers with frozen accounts would have to go through a somewhat lengthy process in order to give lenders access to their frozen credit profiles. Businesses that relied on their consumers financing and borrowing money (such as car dealerships and banks) argued that this would decrease the amount of “impulse spending.” People who would otherwise seek instant approval for a loan and buy in the heat of the moment would have the chance to go home for a few days and think about it while the lenders waited for the would-be buyer’s credit profile to get unlocked.

The Economic Growth, Regulatory Relief, and Consumer Protection Act

In 2020, there were over 1.4 million reports to the FTC of identity theft. This was double the number of reports from the previous year, which confirmed many consumers’ suspicions that identity theft was rising.

Despite businesses fighting credit freezes, the rampant credit card fraud and identity theft in the United States eventually led to federal regulators stepping in. In 2018, Congress passed the Economic Growth, Regulatory Relief, and Consumer Protection Act. This gave all consumers the ability to freeze and unfreeze their credit profiles whenever they saw fit for free.

This was great news for those who had been victims of identity theft or who were scared of the risks that a potential security breach could pose to their credit.

Child Credit Freezes And Children’s Identity Theft

The new bill also gave parents the ability to freeze their children’s credit profiles. Technically, a child should never have a credit profile, to begin with. Since they’re not of legal age to sign any contracts, then they shouldn’t have a credit report.

However, one of the most common loopholes that scammers use is stealing children’s social security numbers and creating fake credit profiles that they can then use to apply for loans, purchase cars, homes, and even get credit cards. This works out in their favor because most people never even think to check their child’s credit reports in the first place. Many parents and teens find out that the child has been a victim of identity theft when the teenager begins applying for financial aid in order to go to college.

To research whether or not your child has a falsified credit report, you can contact any of the three bureaus and perform a search using your child’s social security number. If you find falsified reports, you can work with the bureau to get them removed and freeze your child’s credit account.

The new bill also gives parents the ability to prevent their children’s identity theft by creating a credit profile with the three bureaus and then freezing the newly-created account. Once the child is of legal age, they will be able to unfreeze their credit profile to obtain loans and start building credit in their name.

Breaking Down The New Credit Freeze Law

The Economic Growth, Regulatory Relief, and Consumer Protection Act gave consumers access to new tools that they could use to protect themselves against identity theft and gave them the right to freeze their credit without having to go through their state government. Here’s a quick breakdown of the most important features of the new credit freezing bill.

Credit Freezing/Unfreezing Is Easier Than Ever

The bill required all three bureaus to create an easy-to-access webpage that allowed any and all consumers to request a freeze on their credit profile without having to wait on the phone for hours at a time. Previously, the long wait times discouraged many consumers from placing a freeze on their credit profiles.

Freeze Your Credit As Often As You’d Like

Consumers may now place a freeze on their credit profiles anytime they’d like. It doesn’t matter whether or not you’ve been a previous victim of identity theft or fraud, and you don’t have to provide the bureaus with any evidence of previous fraud. You can also unfreeze your credit profile anytime you’d like.

Credit Freezing Is Free For Children

The 2018 bill made it clear that all children under the age of 16 (or their parents) could freeze their credit profile free of charge, no matter what state they live in.

Long-Lasting Fraud Alerts

Prior to the bill, fraud alerts only lasted for three months on your credit profile. Now, they remain on your credit profile for a year.

Fraud Alerts, Credit Freezing, and Credit Locking: What’s The Difference?

A fraud alert is a less strict version of a credit freeze that can protect you from fraud while still allowing creditors to view your credit profile. However, they’ll be required to answer several security questions that only you know the answer to in order to view your credit report.

Credit freezing is what we’ve discussed throughout this article. You’ll need to contact each of the three bureaus and freeze your account, and reporting with all of them. Nobody will be able to pull your credit profile unless you unfreeze your profile first.

Credit locking is very similar to credit freezing and is a service that several credit agencies provide. Essentially, it allows you to freeze and unfreeze your credit profile by entering a PIN through your mobile device. It’s not quite as secure as a full freeze, but it’s still a good way to ensure that your identity is secure.

How To Freeze Your Credit

Freezing your credit is simpler than ever. In the past, you had to call each bureau and wait on the phone to speak to an agent or mail a credit freeze request to the company. Today, you can freeze all of your credit profiles through each of the bureaus’ online request forms.

Equifax Credit Freeze

Mailing Address:
Equifax Information Services LLC
P.O. Box 105788
Atlanta, GA 30348-5788
Phone Contact:
888-548-7878

Request A Freeze Online: https://www.equifax.com/personal/credit-report-services

Experian Credit Freeze

Mailing Address:
Experian 711 Experian Parkway,
Allen, TX, 75013
Phone Contact:
888-397-3742

Request A Freeze Online: https://www.experian.com/freeze/center.html

TransUnion Credit Freeze

Mailing Address:
TransUnion LLC P.O. Box 2000
Chester, PA 19016
Phone Contact:
888-909-8872

Request A Freeze Online: https://www.transunion.com/credit-freeze

How To Unfreeze Your Credit

Should you ever need to unfreeze your credit profile in order to apply for a loan or obtain a line of credit, follow the same steps that you followed to freeze your credit. The only difference is that you’ll need to request an unfreeze on your credit profile. The bureaus will require you to answer a few personal questions or enter a PIN to verify your identity.