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Frozen: Not Just for Yogurt Anymore
Published Date : June 2, 2016
When you think of the word ‘frozen’, several images probably come to mind fairly quickly: characters from the Disney movie, frozen yogurt, the east coast during winter… but it’s very unlikely that you thought of frozen credit. That’s right, freezing your credit accounts with Equifax, Experian and TransUnion can be done and keeping them frozen unless you need to access them makes it more challenging for identity thieves to fraudulently open new credit accounts in your name – even if they’ve stolen your ID.
To be clear, freezing your credit will not keep thieves from accessing your existing bank or credit card accounts. You still need to diligently monitor those for unauthorized transactions. (Setting up an email or text alert received for credit card transactions above a specified dollar amount can help with this.) If you’ve subscribed to a credit monitoring agency, be sure to fully understand how it works — does it freeze your credit accounts or simply monitor them for activity? It is important to understand the difference. Some services, like LifeLock®, work by freezing your credit — and it remains frozen unless you “unfreeze” it to open a new account. If someone tries to open a new credit account in your name, LifeLock® will contact you for verification that it is in fact you trying to refinance your mortgage or get a Neiman Marcus card. If you don’t respond, or respond incorrectly, the credit account will not be opened. Be aware that many credit monitoring services only alert you to activity in your credit accounts after the fact. While this will still provide an opportunity for you to respond and shut down the fraudulent account, it is not the same thing as freezing your credit.
Using a service may be the most convenient way to freeze your credit, but you can also take the DIY route for a fraction of the cost. California residents can freeze their own credit accounts for only $10 per credit reporting agency. Upon freezing, you are issued a PIN which must be produced if/when you need to unfreeze your credit for any reason. As you can imagine, you may not be able to remember the PIN years later when the time comes to unfreeze your accounts, either temporarily or permanently. Not to worry, your PIN can be reissued for a $10 fee. There’s another $10 fee required to unfreeze your credit and be aware that the “thawing time” can take awhile if you’re doing it yourself. While this process may seem cumbersome for your own credit accounts — and it is not recommended if you need to access them often — it may be an easy and effective way to protect the credit account of a minor child.
Finally, if you’re thinking that freezing your credit will keep you from receiving all those pesky offers for new credit cards, think again. This can also be done by contacting the three credit reporting agencies at www.optoutprescreen.com and electing to, you guessed it, opt out of these offers for either a five-year time period or permanently, but it is a different request entirely.
If you already have all of the credit accounts you need or will likely need for the foreseeable future, a credit freeze in combination with continued monitoring of existing accounts can help ensure that you’re not a victim of fraud.
Source: www.consumer.ftc.gov
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