Credit freezes: what you need to know
2023 saw a significant rise in consumer fraud losses across the United States, with a reported $10 billion lost to scams from 2.6 million instances of fraud, according to the Federal Trade Commission. With this reality in mind, it’s imperative to be extra cautious about who has access to your personal information. If you suspect you might be the victim of fraud, one of the first steps you should always take is freezing your credit.
If you’re a new credit card holder or have never placed a freeze, you might not be familiar with what a freeze is and how to place one. Here are answers to some frequently asked questions about credit freezes.
What is a credit freeze?
A credit freeze is a free tool to protect you from identity theft, or in the event theft has already occurred, prevent your personal information from further abuse. When a credit freeze is placed, access to your credit report and associated personal information is restricted. When this happens, you nor anybody else will be able to open a new credit account. This means that they will be denied if a fraudulent actor attempts to take out credit in your name.
In most cases, you can still apply for jobs, rent an apartment, or purchase insurance while the freeze is in place. You will have to lift the freeze, however, before applying for new credit or for a loan or mortgage.
When should I freeze my credit?
Credit freezes are most often used when someone suspects being a victim of fraud or another form of a data breach. While a credit freeze doesn’t stop you from making purchases, it prevents lenders from viewing your credit and therefore stops you from opening another credit card. In most cases, you can get your credit freeze lifted within one business day.
Are there downsides to freezing my credit?
There are no downsides to freezing your credit, other than the minor inconvenience of lifting it when applying for a loan. Furthermore, a credit freeze does not negatively impact your credit score. Given the security and the lack of significant downsides, many experts highly recommend using credit freezes. For these reasons, you might even consider placing a freeze on your account whether or not you suspect any fraudulent activity.
How do I freeze my credit?
There are three main credit reporting agencies in the U.S. that you need to go through to freeze your credit:
- Experian - online or by calling 888-397-3742
- Equifax - online or by calling 800-349-9960
- TransUnion - online or by calling 888-909-8872
Unless requesting a freeze by mail, you can have your credit frozen within one business day.
Our personal banking team is here to help you along your financial journey. Don’t hesitate to get in touch with us today regarding your personal financial goals.
