Should I Freeze My Credit?Submitted by Breakwater Financial, LLC on September 20th, 2017
Since my last blog post on the Equifax Security Breach, by far the most common question I've received is "Should I freeze my credit?" In my opinion, baring certain exceptions, yes I think most of us should freeze our credit. Most of what you'll read on freezing your credit refers to this step as drastic or excessive. And I would have agreed with this. However, that was before the Equifax Breach. In my belief a breach of this scale and magnitude (143 million of us) changes the game.
First, just what is a credit freeze? According to Wikipedia "A credit freeze, also know as a credit report freeze, allows an individual to control how a U.S. consumer reporting agency (also know as credit bureau: Equifax, Experian, TransUnion, Innovis) is able to sell his or her data. The credit freeze locks the data at the consumer reporting agency until an individual gives permission to the release of the data."
Let's first look at some of the reasons you might not want to freeze your credit right now. First, and most obvious, if you were not impacted by the Equifax Breach. You can find that out here: Equifax Potential Impact.
Next, do you plan to apply for or use your credit anytime soon? Remember this could include but not limited to the following:
- a mortgage
- home equity line of credit
- new credit card
- car loan or lease
- opening a new checking or savings account
- renting a car
- switching insurance companies
- changing cell phone carriers
- applying to rent an apartment
- in some cases applying for a job
- taking out a loan for your business with a personal guarantee, etc.
And lastly, are you organized? If not, be careful. You'll be issued PIN numbers from the credit agencies needed to unfreeze your credit. It is a very cumbersome and time-consuming process to get these PINs back if you lose them. Think - you're at the car dealership ready to take home your shiny new car but you've lost your PINs. You'll be coming back sometime next week to take delivery. Keep your PINs in a very safe place and remember where they are.
The "cost" of freezing your credit comes in the form of both time and a little money. Expect the process to take 15 minutes under normal circumstances but longer now, given how many Americans are currently freezing their credit. In Massachusetts the cost can be up to $5 per reporting agency, per person. However, Equifax is currently not charging anything to put a freeze on your credit. There is a fourth, smaller agency called Innovis that I would also recommend putting a freeze on.
A word of caution: TransUnion will try to enroll you in a service called "TrueIdentity" which is not the same as a credit freeze. Look for the options to bypass this and move on to freezing your credit. TransUnion will also make you create an online account before you can proceed. Below are the links to freeze at each agency:
Freezing your credit is a hassle; no doubt about it. But it is no where near as much of a hassle as dealing with a fraudulent account being opened in your name. Equifax was the latest data security breach, but I'm certain that it will not be the last. And remember, a credit freeze will protect you more than not having one in place but there still are a number of other ways individuals with your information can use it against you. So stay vigilant!
As always if you have any specific questions as to your unique situation, please do not hesitate to contact me.
Thank you, Abe
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