To Freeze or Not To Freeze……Your Credit Reports
Worried about identity theft? How about the data breaches? Keeping you up at night? You should be! I hope you have worked hard to protect your credit rating through your payment history. Now is the time to protect it from the “deep dark web.”
Yes, you can pay a monthly fee to some of the services out there. But you can do it yourself for next to nothing, if at all. Just freeze your credit reports with the three main agencies; Experian, Equifax, and Transunion. Both freezing and unfreezing your reports should be free.
Once you freeze your reports, no one can retrieve your credit report without you first unfreezing your accounts. And no creditor would approve your application unless they could retrieve your credit report. (Those creditors who have a history with you can get updates. They are not blocked. It is only the new requests that are blocked.) And freezing your reports does not affect your credit score.
For all of the right reasons, I froze my accounts thinking that I would never have to apply for credit again. One of the side benefits was a significant reduction in the “preapproved” unsolicited credit offerings. I no longer had to worry if these mailings were stolen from my mailbox.
OK, you say, but a few things happened along the way. I wanted to trade in my car and I wanted a lease. Dealer needed my credit reports. While sitting in their office, I unfroze my accounts for one day! Boom, the lease was approved.
My bank needed to renew our corporate line of credit. (If you are a loyal reader of my columns, you will understand the necessity of such a line.) I guarantee it personally, so I unfroze the accounts for a few days. The line of credit renewed.
A bigger and totally unexpected issue. I applied for my online Social Security account. (Yes, I am part of the grey power community!) I could not create an online account. I had no idea why, and have you ever tried to get an appointment with Social Security to resolve this apparently simple issue? Well, a light bulb went off.
Yes, even our Social Security Administration relies on the credit reporting agencies to validate or confirm your identity! I unblocked my accounts for a day, applied online answered a lot of questions (same as I answered annually for www.annualcreditreport.com, another tidbit of advice in previous columns), and bada bing, I was approved for an online Social Security account. It unlocks all of my benefits.
How simple is it to freeze your accounts? Just go to the website of each of the reporting agencies, search “freeze” and follow the prompts. Yes, you will have to confirm your identity based on historical credit information, and then you can place the freeze. You will be given some sort of PIN or procedure to gain access in the future.
How simple is it to unfreeze one or more accounts? As you read above, I have done it routinely. Just go back to the sites and follow the prompts with your PIN or procedure.
The freeze stops new accounts from being opened. It will not protect you if someone has an existing card of yours (or just the information from the card), so please remain diligent with your monthly statements. It will not help you if someone has your social security number and files a fake tax return. Hopefully, they cannot create your online account with Social Security, but if they knew all of the answers to those random questions, it is possible but very unlikely.
Yes, you might argue that the few days your reports are unfrozen, you are susceptible to fraud. Highly unlikely.
Stop reading, and go freeze your accounts. You will thank me for it and hopefully sleep better as a result.
A 1975 graduate of the Wharton School at the University of Pennsylvania, Harvey enjoyed a 20+ year career in commercial banking, exercising his “golden parachute” in 1996. In his volunteer life, he is a past chair of the Small Business Banking Unit of the American Bankers Association, Easter Seal Society of New Jersey, the SAAGNY Foundation, PPAF EXPO, and Supplier Committee of PPAI. He is also a past President of PPAF. PPAI awarded him the H. Ted Olson Humanitarian Award in 2013.