The Pros & Cons of Freezing Your Credit

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The recent breach of the Marriot hotel may be the largest such breach in history. As a result of their systems being compromised, potentially 500 million accounts may have had information exposed to hackers. Unlike other breaches, the information that was stolen in the hack wasn't just credit card information which can be changed. Hackers gained access to a swath of personally identifiable information from customers such as addresses, passport numbers and birthdays. That information can be used to open new lines of credit and unfortunately can't be changed to throw off thieves. As a result, some experts have started talking about freezing credit lines as a way if preventing frauds as a result of such breaches in the future.

What does it mean to freeze your credit?

A credit freeze allows a consumer to control and restrict access to their credit report. This makes it more difficult for thieves, scammers and other unauthorized parties to open credit in that consumer’s name without their permission. This freeze prevents unauthorized credit requests or accounts because a potential creditor usually needs to check an applicant’s credit report before making a credit decision. If that business cannot access the information due to a credit freeze, they will probably be unable to approve any new credit accounts. However, a credit freeze does not prevent unauthorized parties from making changes to your existing accounts so it is still important to closely monitor your account activity, which is usually easy to do online.

- Credit Freeze by Investopedia

While the measure may seem extreme, the regularity of credit cards and personal information being compromised in major hacks has made it seem like common sense solution. Understandably though, there are many questions to answer about this procedure so let us look into them.

  1. Does a Credit Freeze affect your Credit Score?

    • No it does not. (Source: Federal Trade Commission)

  2. Will this 100% prevent anyone from accessing my credit accounts?

    • It will prevent unwanted third parties from opening news lines of credit but if they already have access to your existing accounts this will not stop them doing damage so you would have to continue to check for any irregularities. Also, if someone gains unwanted access to your social security number they can still potentially cause problems for you. (Source: Federal Trade Commission)

  3. Will I be able to open new accounts after I freeze my credit?

    • Yes, you will be able to open new accounts after a credit freeze but you will need to lift the hold temporarily in order to do so. (Source: Federal Trade Commission)

  4. Are there any drawbacks to freezing your Credit?

    • “Freezing your credit can be inconvenient. You need to contact all three bureaus. You also have to establish accounts with Equifax and TransUnion when you freeze or thaw online, while PINs are required when you unfreeze by phone or postal mail. Meanwhile, Experian requires you to keep track of your PIN to freeze and unfreeze your files regardless of method.“ (Source: Nerdwallet.com)

  5. How do I freeze my credit?

    1. You have to contact the three major credit rating agencies individually. Click on the links below and follow the instructions.

Credit Report Services | Equifax®

Take control of your Equifax credit report. Whether you're looking to freeze, place a fraud alert, or submit a dispute, we'll help you get started today.

Consumer Assistance at Experian

Take action, get access and get help with credit report disputes, security freezes, fraud alerts, denied credit and credit advice.

Credit Score Help | Credit Report Help | TransUnion

Whether you are looking to freeze your credit, dispute a credit report or activate fraud alerts, TransUnion is here for you every step of the way.