If you’ve been a victim of identity theft or want to prevent yourself from becoming one, you might be considering putting a security freeze on your credit file. While a freeze is in place, it greatly reduces the chance that anyone will be able to open credit in your name.
Requesting credit freezes at all three credit bureaus is a good idea if someone has actually stolen your identity. It is also worth considering if you suspect someone has stolen or otherwise obtained your Social Security number or other information that can be used to open credit in your name. But a security freeze may not be the best solution if the theft involves only your credit or debit card information, as with the recent data breaches at Target and Neiman Marcus.
First off, the primary danger from these breaches is that scammers may use your existing accounts to charge purchases or withdraw money. Neither of those actions requires accessing your credit file, which a security freeze is designed to prevent.
A freeze also has drawbacks. While it’s in place, it prevents virtually everyone from accessing your credit files, even those you’ve authorized to do so (access still is permitted for companies with which you have existing relationships, such as your credit card issuers). That can create hassles, delays, and other problems if you need to apply for a loan, credit card, or a job; obtain insurance; rent an apartment; set up electric or phone service; and more. Most companies won't extend credit until they check your credit file at one or all of the three major credit bureaus. And some employers won't hire you without a credit check.
And unless you have a report from your police department or other agency indicating you’re a victim of ID theft, it likely will cost you to set up, remove, or lift a security freeze at the three major credit bureaus. Fees range from $2 to $15 per bureau, depending on your state’s laws.
When a Freeze is Necessary
If you’re an actual victim of ID theft, a security freeze is a necessity. You should initiate one at all three major credit bureaus, Equifax, Experian, and TransUnion. You’re likely entitled to a free freeze, though you may need to provide a report from a police or motor vehicles department, the Federal Trade Commission or some other agency. Check the bureaus’ websites for more information about what you must do to initiate or lift freezes. Keep in mind that while the freeze is in place, virtually no one will be able to access your credit file, even those who may need to if you’ve applied for credit or a job.
When you Might Consider a Freeze
A freeze might be worth considering if you think you might become a victim of ID theft (you lost your wallet, for example), you’re sure no one will need to access your credit file; or you live in a state that doesn’t allow bureaus to charge a fees for freezes.
- Don’t lose your PIN. If you do request a security freeze, don’t lose the personal identification numbers the bureaus will provide you for use when lifting it. Some states allow bureaus to charge PIN replacement fees ranging from $5 to $10. (ID theft victims may be exempt from that fee as well.)
- Lift only one freeze if possible. If you need to lift a freeze, for example when setting up Internet service, find out if the company will tell you which credit bureau or bureaus it will use to check your file. If it's just one, you can save money by lifting the freeze only at that bureau instead of at all three.
- Consider a fraud alert. If you aren’t a victim of ID theft but fear you could become one, an alternative is to place a free fraud alert on your credit file. When an alert is in place, your credit file will be accessible, but creditors must take reasonable steps to verify your identity before granting you credit. Unlike a credit freeze, which you must initiate at all three bureaus, you need only request a fraud alert at one. The request automatically will be sent to the others, typically within 48 hours. An initial alert lasts only 90 days. If you’ve been an actual victim of identity theft, you can request an extended alert, which lasts for seven years. During that period, a creditor must telephone you before it extends credit. To initiate an extended alert, you must provide an identity theft report from a police department or other agency.
- Change account numbers and check statements. Just because you chose any or all of these options doesn’t mean you don't need to check your billing statements regularly, especially if a merchant informs you about a data breach that involves theft of your credit and debit card information. In these types of cases, it's vital to change the numbers of the affected accounts. Also monitor your billing and bank statements and report any unauthorized charges or debits immediately. And be on guard for anyone who may use the stolen card information in an attempt to trick you into revealing your Social Security number or other sensitive information, perhaps by contacting you by phone, email, or text and impersonating someone from a company you regularly do business with. As a further precaution, be sure to check your credit reports. Federal law entitles you to one free report from each of the three major credit bureaus every 12 months.
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