First, you should restrict lenders from monitoring your credit unless you unfreeze your information. This will stop someone stealing your personal information and opening a credit card in your name.
Using a free credit freeze to safeguard your credit against identity theft is a smart move, even if you don't have good credit or have little saved up.
Your Social Security number, driver's license number, and birthdate are examples of personal information that thieves can take. They can then use this information to construct new identities and apply for loans and credit card accounts in your name.
When you apply for a new account, a credit freeze keeps lenders from examining your credit history. Therefore, a credit freeze will prevent the lender from reviewing your credit in the event that a criminal has access to your personal information and attempts to create a credit card in your name. In order to apply for credit, you must lift any credit freeze that may be in place.
Free credit freezes, also known as security freezes, became mandated by federal law in May 2018. Consumer credit file freezes are now free of charge with Equifax, TransUnion, and Experian, the three major credit reporting agencies. Lenders cannot receive information because of the freezes until you provide a personal identification number to "thaw" the freeze.
While data breaches, like the one that happened at Equifax in September 2017 and exposed sensitive information for almost half of the US population, can allow identity thieves to obtain personal information, it's crucial to keep in mind that consumers are the ones who need to initiate the freeze.
Before applying for any new credit, customers must also remember the PINs that are required to unlock the freeze. It's also crucial to remember that, since it is impossible to predict which credit bureau a lender will use, credit freezes must be thawed at all three credit bureaus.
In order to prevent identity theft, the new law now permits parents to open and close credit files for kids under the age of 16.
If you want to put up a credit freeze as a means of self-defense, be sure to freeze your data at the National Consumer Telecom & Utilities Exchange (NCTUE) in addition to the three main credit reporting agencies. A freeze is free with the NCTUE, a consumer reporting agency that supplies data to utility companies, some mobile providers, and subscription television services. Remember that merely freezing your credit reports at the major credit bureaus won't always prevent identity thieves from obtaining your personal data through hacking into utility and mobile companies.
When it comes to safeguarding your credit against identity thieves, putting up a security freeze is a smart place to start. However, it won't shield you from other forms of fraud, such as when someone uses your credit card number or assumes your identity to obtain Social Security payments.
Check your credit card accounts for any unusual expenditures, occasionally review your credit reports, and keep an eye on your online Social Security account to help prevent these kinds of fraud.
(This material should not be interpreted as professional or legal advice; rather, it is meant purely for informational purposes.)
