Credit, FICO Score

What is a credit freeze? Do you need one if your information was breeched?

Equifax, one of the three major credit reporting agencies in the U.S., announced a data breach that affects 143 million consumers back in the fall. Because of this they are offering free credit monitoring and the opportunity to see if your information has been compromised. Even if your information has been compromised and you are having your reports monitored, is that truly the only option?

The answer to that is no.

A security or credit freeze makes it more difficult to open new accounts in your name because it restricts access to your credit report. It essentially locks down your information so that no one can access it. There is usually a notation made on your credit report which makes the report itself impossible to view. Other than your name and address there is no additional information usually on the report and a note to contact the person for the special pin to access the report. 

I am going to suggest that if you have ever applied for credit – with anyone – that you do this. Why? Because at some point your personal information was provided to Equifax. And while they are saying only half the people in their database have been compromised, the sad fact is that with all the information being put out by the media, there’s really no way to know for sure if you’ve been affected or not.

You can place a credit freeze on your credit report by contacting Equifax, Experian and TransUnion.

Equifax: 1-800-349-9960
Experian: 1-888-397-3742
TransUnion: 1-888-909-8872

You will need to supply your name, address, date of birth, SS#, and other personal information. You will have to pay fees and they vary from agency to agency.

You will receive a separate pin for each freeze you place on your account from each credit bureau. You will need to keep these pins in a safe place and ANY time you apply for credit you will need to use the pins to “unlock” your report and FICO score.

Once a freeze is in place, it is there until you request that the credit reporting company removes it. There may be a cost involved with lifting the freeze from your credit report and that cost varies by state. A credit reporting company must lift a freeze no later than 3 business days after getting your request.

Now, a credit freeze is different from a fraud alert. A fraud alert is free. It is literally just a statement that gets added to your report that provides a telephone number and requests that whomever is pulling your credit report contact the person to make sure that it is essentially them applying for credit. It still allows someone to pull your full credit report, it still allows someone to apply for credit. It is in many ways ineffective.

There are 3 types of fraud alerts – Initial fraud alert, extended fraud alert and an active duty military alert. 
An initial fraud alert will stay on the report for up to 90 days. If you are a victim of identity theft or suspect it, you will want to file a police report and take additional precautions. 
An extended fraud alert will stay on your credit report for up to 7 years and is meant for actual victims of identity theft. 
An active duty military alert is for 1 year and is meant to protect someones credit while they are away on service to our country.

If you place an alert on your credit report, you must provide proof of your identity. You only need to place an alert with one credit bureau – they will alert the other 2 bureaus on your behalf of an alert.

The fact is that while these alerts are great – they really don’t keep anyone from accessing your credit report.

It has been several months since Equifax’s data breach but it may take a while for you to be affected. Placing a freeze on your credit report will protect you for the long term and make it much harder for your credit to be harmed should your information be sold into the wrong hands.