A Guide to Freezing Your CreditIf you’ve been reading our blog or any news about the Equifax breach, you’ve likely heard that freezing your credit is one of the best things you can do to protect yourself, which is absolutely true. To help you decide if a credit freeze is the right identity-protection tool, we’re breaking down exactly what freezing your credit means, as well as how you can go about freezing it. Keep reading to decide if a credit freeze is right for you. Those who already know they want to freeze their credit, can click here to jump to our step-by-step guide.

What is a credit freeze?

A credit freeze, which is also known as a security freeze, is a tool that locks your credit for an extended period of time. The goal of this tool is to make it difficult for identity thieves to open fraudulent credit accounts using your name, social security number and other personal information, as it will block your credit reports from gaining any new credit accounts. You see, when you (or an identity thief) applies for a credit card, personal loan, mortgage or any other line of credit, the lender will pull your credit reports to get an idea of what your credit history looks like — this is one of the many aspects lenders look at when they evaluate your creditworthiness. If the lender is unable to pull your credit reports (they can’t access them when you set a credit freeze), they will not open the account.

It should be noted that your creditors will still be able to report to the credit bureaus for any open accounts you currently own, you will still be able to access it yourself through AnnualCreditReport.com and you can continue to use a credit monitoring or identity theft protection service with an active credit freeze.

What’s the difference between a credit freeze and fraud alert?

This is something we’ve discussed before, but it’s important to note again because it can be a confusing topic. Unlike a credit freeze, which completely protects your credit reports from new accounts, a fraud alert adds a note to your credit reports to let future lenders know that they need to contact you to verify your identity before they approve the new line of credit. Fraud alerts are free for consumers to place and consumers only need to contact one of the bureaus to place an alert, as that bureau is legally required to report the alert to the other two bureaus. On the other hand, credit freezes cost $5 to $10 per bureau, depending your state of residency — note that Equifax freezes are free following the massive breach — and you must contact all three of the credit bureaus to place a freeze — contacting one or two will not protect your credit.

As a previous victim of identity theft, I’ve tried both a fraud alert and a credit freeze, and I have to admit that I found fraud alerts to be completely useless because they require the lender to contact you, which I found wasn’t very reliable. In fact, I was able to open a new credit card when I had fraud alerts on all three of my credit reports and I was never contacted to “verify my identity” before it was approved. On the flip side, when I applied for an apartment while my credit was frozen (I forgot to temporarily lift the freezes), the manager contacted me to let me know they were unable to access my credit, which means the freeze actually works.

We should also touch on a credit lock, as it’s likely something you’ve heard about a lot about since news of the Equifax breach broke. It’s really unclear as to how a credit freeze and credit lock differ. In fact, some cybersecurity experts, like Brian Krebs, are also wondering the same thing. As far as we can tell, a credit lock, which is free for Equifax and TransUnion (Experian requires you to sign up for its identity theft protection service to access credit locks), puts the ability to take action into your own hands, as opposed to asking the bureaus to freeze and unfreeze your credit for you. That said, since it’s not clear as to how a freeze and lock differ, you may be better off just opting for a freeze.

What aspects of my identity are not protected by a credit freeze?

Although a credit freeze will protect your credit from new, fraudulent accounts, it will not protect you from other types of identity theft. Essentially, you can still fall victim to any type of identity theft that can be committed using your name, social security number and other personal information. This leaves some aspects of your life vulnerable, including …

Your existing credit accounts

While a credit freeze will protect your credit reports from new accounts, it cannot protect your existing credit accounts. This means that if your credit card number is stolen in a major breach, the thieves can still use your credit card and rack up a hefty bill if they choose to. Similarly, a credit freeze will not prevent anyone from changing the information on your current account, meaning someone can update your account’s mailing address or credit card’s authorized users, for example. That’s why it’s essential for you to continue to check your credit account statements even after you freeze your credit.

Your tax return

Another aspect of your identity that isn’t protected from a credit freeze is your tax return. Tax identity theft occurs when someone files a tax return in your name with the hopes of stealing your tax refund — even if you don’t get a refund, you can still fall victim because a thief can easily input fake information. Unfortunately, the only way to avoid falling victim to tax identity theft is to file your tax return before an identity thief can. Want to learn more? Read about my first-hand experience as a victim of tax identity theft and see how you can avoid falling for tax identity theft.

Your health insurance

While you may not think about them as something an identity thief would want, medical identity theft is a real and something that could potentially kill you, as it can cross the thief’s medical records with yours. Even though a credit freeze won’t protect you from medical identity theft, there are some things you can do. This blog post details everything you need to know.

Other insurance and existing accounts

Other aspects of your identity that are not protected by a credit freeze include car insurance, bank accounts and any other non-credit accounts you may have opened. Although there’s no foolproof way to protect all of this information, the best thing you can do is to make sure you know who you give this information out to and ask questions to anyone who is asking for such information before you hand it over. For example, if you get a call from someone claiming to be your insurance company and they want to give you a lower rate if you provide them with your policy number, your bank account information and your car’s VIN, it’s probably a scam. As such, you’ll want to hang up the phone and contact your insurance provider using a number you trust to confirm the legitimacy. Phone scams are one of the ways thieves aim to steal such information from unsuspecting victims, so it’s important for you to know how to spot a phone scam.

Is there anything I should know before I freeze my credit?

Credit freezes can be somewhat complicated, so here are some things you should know before you freeze your credit.

They can be expensive. As mentioned earlier, credit freezes can cost $5 to $10 per bureau, according to the FTC, depending on your state of residency. The only exception to this is Equifax, which since the breach, is now free for everyone to freeze. Keep in mind, if you’re required to pay a fee, it’s something you must pay every time you set a freeze. For example, if you ever need to remove a freeze and choose to add it again later, you’ll need to pay the fees again.

You may occasionally have to “thaw” your credit. Since credit is something that’s always changing as we pay bills, use our credit cards, etc., it’s likely that you’ll have to “thaw,” or remove the credit freeze, one day to apply for a new loan, credit card, apartment, cell phone plan or anything else that requires a credit check. If you ever need to lift a freeze, you can either completely remove it, or temporarily lift it for a set period of time — you can select the exact dates when the freeze is lifted and reinstated. Once you request the removal of a credit freeze, the corresponding credit bureau has up to three business days to remove it. Be aware that if you live in a state that requires you to pay a fee to freeze your credit, you will be required to pay the fee if you temporarily lift the freeze.

Credit freezes don’t last forever. While the majority of states allow you to keep your credit frozen until you temporarily lift or completely remove it, there are some states that will only keep your credit frozen for seven years. Our friends at CreditCards.com have a breakdown of each state’s legislation.

You may be able to freeze your children’s credit. This is something we’ve covered in-depth before, bit it’s important to note again. Although it’s not an option in all states, parents and legal guardians can freeze their child’s credit to protect their credit reports from getting wreaked by identity thieves before they turn 18 and can access their own credit; bear in mind, a credit report needs to exist in order to be frozen, so if this is an option you’re able to take chances are your child’s information has already been compromised. Visit our guide to freezing your child’s credit to learn more about the pros and cons. Be aware that the process of freezing your child’s credit is the same as the one we detail below, assuming your state allows it.

A credit freeze doesn’t impact your credit scores. This probably goes without saying, but since a credit freeze does not impact any of your current accounts, your credit scores will not be impacted when you freeze your credit.

How to freeze your credit

There are two ways to freeze your credit — you can either call the credit bureaus or place a freeze online. It’s important to note that you must contact all three of credit bureaus to freeze your credit. I’ve personally tried both ways and found that they are pretty painless, with the exception of TransUnion, as it requires you to sign up for its service to freeze your credit reports online. If you’d like to avoid this self-promotion, I’d suggest you call TransUnion. Here’s how you can freeze your credit, according to the FTC. Remember that it may cost you $5 to $10 per bureau (with the exception of Equifax. which is free following the breach), so be sure to have a credit card handy. Also, a freeze may take up to 48 hours to hit your credit reports — you will receive a confirmation via postal mail.

If you want to do it online, visit these websites and follow the steps.

If you’d rather do it on the phone, call these numbers and follow the prompts.

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

While freezing your credit isn’t a surefire way to protect your credit, it can help prevent identity thieves from opening new credit accounts in your name. If you want to learn more about your credit and how you can protect it, follow our credit monitoring blog.