Credit ratings may affect many aspects of your financial life, so you must take steps to safeguard them. If you want to be sure no one else can access your credit file without your permission, a credit freeze is a good option. Freezing and thawing your credit is straightforward, but familiarity with the steps can help you make the best decisions.
What’s A Credit Freeze?
You may prevent unauthorized users from seeing your credit reports by placing a “security freeze” on your account. If applying for new credit in your name involves a complex query on your credit reports, freezing your credit may help deter identity theft. However, just because you freeze your credit doesn’t guarantee that no one will ever see your credit report again. Even if you freeze your credit, the firms with which you already have an established credit history will have access to it. And government entities executing a court order or search warrant will also be allowed to examine your credit file.
A Step-by-Step Guide to Freezing Your Credit
Suppose you wish to restrict access to credit reports from potential lenders. In that case, you can freeze your credit with any of three main national credit bureaus. A credit freeze restricts access to your credit report by most third parties unless under specific circumstances. You have complete control over how long a freeze on your credit remains in effect until you decide to lift it. Thanks to a legislation change in 2018, freezing your credit will no longer cost you a dime. Previously, you had to pay to lock and unfreeze your credit.
Unfreezing Your Credit: A Guide
You could decide you don’t need the credit freeze anymore. If you require to apply for credit card, mortgage, or another loan, you may temporarily wish to break the freeze. Each credit bureau must be contacted if you wish to lift the freeze on any credit reports. For Experian and TransUnion, you’ll need to enter PIN you chose when you first signed up. The credit bureau has a deadline for removing the freeze once you request it. The freeze must be released within one hour for requests submitted by phone or online. The freeze must be removed within three business days if the request is sent by mail.
Credit Freezing: The Pros and Cons
There are benefits and drawbacks to credit-freezing that you should be aware of. Weighing the benefits and drawbacks of placing a freeze on your credit report will help you make up your mind.
- Protects your credit file from potential thieves and fraudsters
- There is no cost associated with placing or removing a credit freeze.
- Your credit may be frozen or thawed in minutes when you do it online.
- No damage will be done to your credit rating while your credit is frozen.
- Credit freezes do not guarantee the total privacy of your credit report.
- You must first deactivate your credit to reapply for credit or obtain a loan.
Unfreezing Your TransUnion Credit Report
You may need to create a new TransUnion account complete with a username and password to unfreeze your credit report online. Your PIN is no longer required. To see your TransUnion credit report, you can request a temporary lift of your freeze, lasting from one to thirty days. You can temporarily remove the freeze for individual creditors or a set amount of time by providing them with a unique access code. In contrast to Experian’s single-use code, this one may be used by numerous creditors simultaneously.
Fraud Alert vs. Credit Freeze
Instead of blocking your credit, you might put a fraud warning on your records. For the next 12 months, your credit report will be safe from identity thieves, thanks to a fraud alert. With the help of a seven-year fraud alert, it will be safe against theft.
If your identity has already been stolen, you may want to choose a longer fraud alert. An extended fraud alert can be placed with any of the three major credit bureaus once an identity theft complaint has been filed. In this case, whatever credit bureau you submit it to is responsible for notifying the other two.
You cannot entirely secure your credit reports with a fraud alert or extended fraud alert, but you can with a credit freeze. But they need creditors and lenders to double-check your identification before opening any new accounts in your name.