[ALERT] Freeze Your Credit Files Now

Category: Finance , Privacy

Massive data breaches that reveal personal information on millions of consumers make it much easier for crooks to engage in identity theft. As individuals, we have little or no control over over data breaches, and what criminals do with that information. But we do have one important tool to defend ourselves. Today you'll learn how credit freezes work, and how they are different than 'fraud alerts' or 'credit locks'. Oh, and should you freeze ALL FIVE of your credit report files now. All five? Yes, read on!

What Is A Credit Freeze?

A new U.S. federal law went into effect in 2018, allowing citizens to freeze and unfreeze access to their credit report files for free. Previously, credit reporting agencies were allowed to charge for that service. When you order a freeze on your credit file kept at a Credit Reporting Agency (CRA), it means that no one – including you – can access the credit data in the file without your prior explicit permission.

So after you freeze your credit file, if you want to apply for a loan or new credit account, you will have to contact the credit reporting agency used by the lender to allow that lender access to your credit report; all other entities will remain frozen out. That lender’s access can be limited to a specified period of time, at the expiration of which the freeze returns.

How to freeze your credit reports for free

In some cases, you can tell a credit reporting agency to allow a specific lender ongoing access to your credit file while freezing out everyone else. Simplest of all options is to toggle the freeze on and off for everyone, but don’t leave the freeze off any longer than necessary

The federal law – actually, a set of amendments to the Fair Credit Reporting Act and related existing laws - supersedes a patchwork of state laws regarding credit freezes. It makes freezing and unfreezing your credit files free of charge to you. Credit reporting agencies used to charge as much as $10 every time you froze your file. They even charged fees to unfreeze a file, despite the fact that it is very much in a CRA’s best interest for you to leave your credit file unfrozen.

Most people know about the Big Three credit reporting agencies: Transunion, Experian and Equifax. But there are actually five that you should know about. I'll give you contact information and credit freeze details for all of them in this article.

Why Freeze Your Credit Files?

Credit reporting agencies collect credit data from creditors, and sell their accumulated data to many different kinds of nosey firms. Your credit report is the foundation of the enormous distributed dossier of personal data about you that exists unless you have been living off the grid all your life. Credit reporting agencies make a lot of money selling data about you. This new law gives you the power to control credit data about you even though it is "owned" by CRAs.

Identity theft is much more difficult when a target’s credit file is frozen. Most credit files contain all the data needed to open a bank account, rent property, replace a “lost’” driver’s license or state ID card, and generally impersonate you.

Freezing your credit files helps to stop privacy leaks at their roots. As I said, a credit file is the foundation of the dossier that tells marketers – among other types of firms - what you buy, where you buy it, how much you spend, and other personal data obtained through Web activity tracking and other marketers’ tricks. Without your credit file data, nosey firms have a more difficult time keeping track of you.

What A Credit Freeze Won’t Do

A credit file freeze alone won’t completely eliminate the risk of privacy leaks or ID theft. The personal data needed to impersonate you is duplicated in many databases that have been stolen, sold, and resold by crooks many times. (See my article Equifax Takes The Data Breach Cake for details of how the Equifax breach allowed hackers access to the records of almost 200 million people.)

If a crook has a good reason to be interested in you particularly, he can piece together your personal data from the many stolen databases out there on the dark Web. But generally, ID thieves get plenty of victims from thefts of credit files and don’t look for more work. A credit freeze is a good start on protecting your identity.

Beware of Credit “Locks”

When you approach a credit reporting agency to freeze your credit, they will try to persuade you to implement a “credit lock” instead. They’ll tell you a lock is as good as a freeze and your credit file can be locked or unlocked in minutes instead of the “up to five business days” that it can take to freeze or unfreeze a file. There are two reasons to insist on a credit freeze instead of substituting a credit lock.

A credit freeze is free; the law forbids credit reporting agencies from charging consumers to freeze or unfreeze their credit files. And if you request a lift of the freeze, the agency must lift it within one hour. CRAs often lure people into credit locks that are free for a period of time but eventually cost an annual or monthly fee that is charged to your credit/debit card automatically. Or they may make the lock free if you accept online ads and marketing pitches; sales of advertising replaces consumer-paid fees.

And in some cases, a credit lock does not provide the same privacy protection as a freeze. For example, with an Experian credit lock, a potential employer or insurer can still see your credit report. But they can't if it's a frozen credit report.

A credit freeze’s terms are set by federal law, while a credit lock is a contract written by a credit reporting agency. That contract contains a clause that allows the CRA to change the contract’s terms unilaterally at any time. Appealing a change to terms of a credit lock or a breach of the contract is a tedious game rigged in a CRA’s favor; for instance, you may have to pay the fee of a private arbitration firm that is chosen by the CRA in question.

Insist on a credit freeze to get protection you can count on being there when you need it, and that can be enforced in public courts instead of private mock courts essentially “owned” by the credit reporting agency that does you wrong.

What About Fraud Alerts?

A fraud alert is another option to make it harder for identity thieves to open accounts in your name. According to the Federal Trade Commission (FTC), “A fraud alert makes companies verify your identity before granting new credit in your name. Usually, that means calling you to check if you’re really trying to open a new account.” To initiate a fraud alert, you can contact Equifax, Experian, or TransUnion and request it. It doesn’t matter which one, because each must notify the other two. A fraud alert is free and lasts one year.

By contrast, a credit freeze limits everyone (including you) from opening new accounts, unless the freeze is lifted. You must place a freeze with EACH of the three major credit reporting agencies. A credit freeze is free and lasts until you lift it. The FTC advises that credit freezes are best for people who aren’t planning to take out new credit.

In my opinion, a fraud alert is less effective than a credit freeze, because it provides less protection. What if a thief has your phone when Macy’s or Target calls to verify your identity? And what if you forget to renew the fraud alert after it expires? A credit freeze does not expire, cannot be lifted unless YOU request it, and the agency must unfreeze your account within one hour. That might be inconvenient if you’re at the store and you want to open a new credit card account. But choices are good.

The Big Three, Plus Two

Remember that I mentioned earlier that there are FIVE credit reporting agencies that you need to know about? The fourth-largest credit reporting agency is Innovis, and you have probably never heard of it because who cares about a fourth-place anything? But you should put a freeze on your Innovis credit file as well as those maintained by the Big Three CRAs.

In addition, there are many firms that specialize in particular types of consumer data. One such firm of importance to most consumers is the National Consumer Telecom & Utilities Exchange. As its name implies, the NCTUE collects data used by telephone service providers and public utilities to approve a consumer for credit that enables opening of accounts for phone and Internet service, electricity, water, natural gas, trash pickup, etc. It behooves you to freeze this important source of your personal data and enabler of ID theft as well.

Here is a summary of contacts for freezing your credit files by going online, calling by phone, or writing a paper letter to the relevant CRA:

Equifax Freeze Online
Phone: 1-800-349-9960 (automated), 1-888-298-0045 (live operator)
Mail: Equifax Security Freeze, P.O. Box 105788, Atlanta, Georgia 30348

Experian Freeze Online
Phone: 1-888-397-3742
Mail: Experian Security Freeze, P.O. Box 9554, Allen, Texas 75013

TransUnion Freeze Online
Phone: 1-888-909-8872
Mail: TransUnion LLC, P.O. Box 2000, Chester, PA 19016

Innovis Freeze Online
Phone: 1-800-540-2505
Mail: Attention: Consumer Assistance, P.O. Box 1358, Columbus, Ohio 43216-1358

National Consumer Telecom & Utilities Exchange Freeze Online
Phone: 1-866-349-5355
Mail: NCTUE Security Freeze, P.O. Box 105561, Atlanta, GA 30348

Have you implemented a credit report freeze? Did you freeze ALL of your credit files? Tell me about your experience. Your thoughts on this topic are welcome. Post your comment or question below…

 
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Most recent comments on "[ALERT] Freeze Your Credit Files Now"

Posted by:

Lucy
06 Nov 2020

Always ask the entity you want to have access to your credit history which agency they will be checking with, and just thaw that agency and only for the one company you want to have access.
Don't forget to re freeze unless you set a limited time initially.
Thanks as ever Bob. We froze our credit history after you suggested it many years ago.


Posted by:

Elizabeth
06 Nov 2020

We had a freeze on the 3 big ones and Experian made unfreezing a 3 week misery. They were the ones the satellite company used so we had to send them all sorts of stuff, spend hours on the phone, and wait, wait, wait. Give yourself plenty of time to effect an unfreeze.


Posted by:

Bob Kinsler
06 Nov 2020

Actually I, due to some advance knowledge, know that ID thief's do not attempt to steal IDs of someone with low credit scores. They tend to leave those with fair credit scores alone too.


Posted by:

Stuart Berg
06 Nov 2020

Bob,
You left out another important agency to freeze: ChexSystems
Their freeze page is here:
https://www.chexsystems.com/web/chexsystems/consumerdebit/page/securityfreeze/information/


Posted by:

Jim Wall
06 Nov 2020

Since most insurance companies use credit scores to determine rates for auto and home owners policy price quoting, will you need to unfreeze all companies you wish to get a quote?


Posted by:

BoinLV
06 Nov 2020

I've had my 5 above credit files frozen for years.
Just recently discovered that this does NOT cover my wife. Freeze your spouse's files, too!
Also froze SageStream, which apparently gets their data from Innovis.
Thanks Stuart, and, as ever, Bob


Posted by:

Brian R
06 Nov 2020

Thanks Bob! Great advice and timing. I just froze the top three yesterday, and will now freeze the other two. My employer just notified me someone entered a fraudulent unemployment insurance claim in my name. In addition to notifying the appropriate agencies, I'm freezing my credit reports to prevent further fraud attempts. Always appreciate your articles & advice.


Posted by:

Joseph Heintz
06 Nov 2020

I followed the online addresses given above and finished all five in about 15 minutes.


Posted by:

RandiO
06 Nov 2020

In a more perfect world, all we would have to do is to press a single button and whamo: Frozen creds for life or unless that button is pressed yet-again for the thaw process!
“Freezing your credit with all three major credit bureaus is the single most important thing you can do to protect yourself against identity theft…” is like a graffiti gone viral on the web.
I am guessing that the FTC caved into the demands of the financial institutions and made this law an “opt-out” rather than an “opt-in” mandate. It will cost EACH savvy and informed American consumer at least a few hours of wasted time to opt-out. I am surprised that no enterprising individual has come up with a simple app which can securely take care of these 5 freeze processes under 5 minutes.
One feels for those other unaware consumers who know not AskBob newsletter!


Posted by:

BobD
06 Nov 2020

When I tried to freeze "National Consumer Telecom & Utilities Exchange Freeze Online", the web site and the phone interface each rejected me. Their phone tech explained that that happens when the utility and telecom companies don't report to them.
(I wish I could freeze/unfreeze my credit card.)


Posted by:

Ruth C
06 Nov 2020

Hi Bob,
Thanks as always for the great articles!

I wasn't aware of the Telecom and Utilities. I clicked on the link you provided and entered my info, but I got a message: "We're sorry...we cannot process your online request concerning an Exchange Service Center security freeze. To assist us in processing your request, please submit in writing the required items outlined below."

I don't want to mail a letter with my info. Do you know why the message appeared? My credit is frozen with the other 4 agencies already. Maybe they weren't able to verify my identity due to that?

Thanks again


Posted by:

kevin
07 Nov 2020

It certainly must be harder to unfreeze one's credit than it is to freeze it. But I see, from the other responses, that the time and difficulty varies. Can someone who has unfrozen their credit in recent times tell us exactly what method(s) the agency used to verify that you (the person on the phone) were really the same person whose account they were being asked to unfreeze? Do they eventually set up some PIN code or other custom security method to streamline the process for those who need to freeze and unfreeze more than just once in a blue moon?

Also, how much additional personal information, which they might not have already had, was demanded by them in the process, in order to surreptitiously grow their file on you? As one example, your mother's maiden name is not usually known to non-governmental entities unless they succeeded in getting you to disclose it to them in the past.


Posted by:

Laurie
07 Nov 2020

I’ve had mine frozen for several. During that time, I’ve needed to apply for credit three times (TU and Equifax.) Unfreezing was super easy (online or app) and happened immediately.

Freezing with the smaller bureaus such as Innovis is a little more time consuming than the big three, as their process isn’t as automated as the big three, but it went smoothly.


Posted by:

janM
08 Nov 2020

Three of these were very easy to do. It all went quickly even though NCTUE told me my information didn't go through and asked me to submit a written request. That one went through with a second submission of the information.

The two that did not go through requested a mobile phone number, since I do not own one, I will try their phone numbers when they reopen.


Posted by:

RICK KRIEGER
08 Nov 2020

So I have to call each one individually?


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